Bachao, Bachao... Help or these drones will get me!

GROUND ZERO

PRAY, WHO IS GETTING THE CARBON CREDITS?

Zzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzzz...Bore sorry Boria Majumdar andSherry 'slam dunk' Sidhu, what an odd couple on telly? Don't theydrone on and on? In India's talking head studios, this duo is firstamong equals as it really grates on your nerves. The IPL eco systemhas also jump startedanother cottage industry, that of commentators and experts who bandytheir knowledge base and poleaxe you between your eyes with theiruber gyan. Navjot Singh Sidhu and Boria Majumdar are two such cottageindustrialists who need to be booked for noise pollution. Wonderwhether Times Now is getting any carbon credits out of thesepollutants? Opinionated, egotistical, loud and talking down to viewersthe Motormouth from Patiala and Bore from Bengal might succeed indoing what no one including my parents have not managed to do forclose to 40 years, wean me away from my obsession with cricket. Fromthe time I set my eyes on the game, I have always been a cricketjunkie, one out of a vast army of savants in this diverse land. Butafter watching the two verbalising and filibustering Bards, I feelchallenged. How can they be allowed to blah and blah and blah ontelly?
On Thursday their antics got nauseating and completely out of controlas they tried desperately to shout each other down. The airwavesalready congested must have been choked with the din that the ruckuscreated. Sample this Sidhuism - I prefer one person jumping sevenfeet, instead of seven people jumping one foot each, referring to theinclusion of Tendulkar in the T 20 World Cup squad. Wah, kya baat hai,but what does he mean, I asked myself. Neither he nor Bore Ya shut updespite numerous interjections by the hapless Times Now anchor wholooked flustered at this unbecoming conduct from his guests. Finallyhe pleaded with both, shouting time out, time out, but to no avail.The producer at this point went in for a commercial break so that theodd couple cooled off. Emotion is one thing, but this was emotionalatyachar. The anchor was practically saying bachao, bachao... mujhe indono se bachao, but his cries for help went unheard. That is when oneanother Sidhuism was unleashed - it is an ill omen to see a fox lick alamb... eh, what does that mean? Boy, did the temperature climb inthere even as the intellectual depth plumb new lows? Robustintellectual debate is one thing, a shouting match is quite another.This was worse than the Yadavs in Parliament.
If there were two unwanted talking heads on telly, then it isdefinitely these two.You can argue that if I don't like them, why don't I switch channels?After all the power is vested in me due to remotis proximus (remote inmy hand). And I did exactly that, but only after I found that my headwas spinning with theirverbal assault. An assault on my sensibilities for the game. So, Iswitched and to my horror found that I had come face to face with someone calledCharu Sharma. I told myself, oh my God, not again! Fortunately the manriding stagecoach with him was Nikhil Chopra who is still tolerable.Sharma is a purveyor of purile inanities and he has been peddling hisstuff for years. At the moment he is on Headlines Today. The best andmost understated and even laconic and sometimes cynical of thesecricket experts is definitely Ajay Jadeja. Unlike the aforementionedtroika, he is not in your face. Jadeja on NDTV's twinchannels is sobriety personified and certainly not camera challengedlike the other three. With Sidhu, Boria and Charu, I guess the momentyou say rolling, the verbal battery and assault begins.
Boria, God bless him has the right name - Bore Ya - and he plays hispart to perfection in the odd couple, verbose and gyani, sitting inhis arm chair or recliner or whatchamacallit and talking nineteen to thedozen. Meanwhile Sherry saheb thinks he is reprising LaughterChallenge. His Sidhuisms are replete with crass humour and cheesyproverbs. Both of them are like that fly which is in your face. Youwant to swat it, but are unable to find something to do it with. AshokMalhotra, Akash Chopra, Kirit Azad, Saba Karim, Kapil Dev, AnjumChopra, Chetan Sharma and even Atul Wassan with his supercilious airabout him are all tolerable. Jadeja is quick with his repartee, butquiet and somber. When the NDTV anchor asked him about the World Cup T20 team selection. He said that obviously the selection was puttingpressure on the players in the IPL. But more than that he said theplayers were under the cosh of delivering on the performance matrixdue to the impending player auction coming up this September-October.With nearly all players going under the hammer for season 4, barring ahandful of Indian and foreign players and the player cap having beenjacked up to $7 million, the intensity to deliver so that they can gounder the gavel at higher prices was that much more on all the players- domestic, Indian regulars and the firangs.
Now that was a thought out call, unlike the 'bak bak' that Sidhu andBoria were indulging in. Or for that matter Charu Sharma who loves tohear the sound of his voice. Worst part is the faux accent which someof these experts have developed in recent times. Mind over matter ormatter over mind, depends on which way you look at it. Like two prizefighters, Sherry and Bore Ya first size each other up and then beginto land verbal punches. Finally the referee has to step in to breakthe clinch. The gab fest leaves you drained. The sardonic Jadejameanwhile thinks and talks, making sense all the time. A touchcynical, AJ isn't loud or overbearing. Now NDTV is readying to unveilProfessor Deano on us. Sidhu was kayoed from commentary stints afterhe abused a fellow commentator on air, while Deano or Dean Jones madea catastrophic boo boo, calling Hasim Amla a terrorist on air.
Sidhu is a popular MP from Amritsar as well, his eccentricitiesprobably make him loveable to some, but as an expert or commentator,he defies all. Witticism is one thing, downright rude and obnoxious isanother. Sidhu graduated from a strokeless wonder to one of the mostdominating batsmen of his time by the time the 1987 World Cup camealong. Known as a ferocious six hitter, he was the first to go afteralchemist Shane Warne on his first tour of India. In fact, he singledout Warney as he smashed four fifties in five innings in that 1997-98series. One of the best and most attacking players of spin bowling,Sidhu had a fearless style of his own. Sidhu has time and againmanaged to metamorphose himself. Not known to be very agile orathletic as a fielder, by the time he retired, he had earned thenomenclature of Jonty Singh for his new found vigour and divingprowess. But always a maverick and unpredictable, he fought withskipper Azharuddin and returned from a tour of England. After beingdropped, Sidhu's hand was forced because he didn't take kindly to theway skipper Azhar handled the issue. It was an unprecedented act.Subsequently he retired from the game in 1999. And while hispaisan-paisan style endered him to the masses, he found that theclasses were revolted with his talkathons.
When Sidhu was sacked by ESPN-Star for his awkward comments, he deniedit all. But rediff.com ran this story in September, 2003, "In April,during the Bangladesh-South Africa match in Dhaka. Sidhu got into averbal spat with fellow commentator Alan Wilkins. He is said to havesworn at Wilkins, saying, 'Don't f*** around with me,' which wascaptured by one of the microphones and reported to the producer. Whencontacted by rediff.com in Hong Kong, Wilkins refused to comment aboutthe incident and said he is unaware about Sidhu's sacking.A month later, at the ESPN school quiz prize-distribution ceremony inKolkata, Sidhu compared the Board of Control for Cricket in India to achameleon, saying it lacks in transparency. His criticism of Indiaskipper Sourav Ganguly during the World Cup in South Africa causedhuge problems for the channel after most of the Indian playersboycotted ESPN. Ganguly dismissed Sidhu as a joke after thecommentator criticised him and the team on-air following the loss toAustralia at the start of the World Cup campaign.
"Sidhu earned his stripes with a commentary style that was his veryown, though it often defied logic. His comments evoked laughter andgenerated a nationwide following. "It is only after I left cricketthat learnt the true meaning of self-belief. I started meditating forlong hours. That is when all my ideas strike me," Sidhu toldrediff.com in a telephone interview on Tuesday morning from his homein Patiala. "I keep a notebook next to me in which I write all thepure and pristine thoughts that I reflect on while meditating. That iswhat you hear in the commentary. I tried to cultivate a style of myvery own, be original and unique," he said. "People liked that andthey called it Sidhuisms. It is the voice of the people."
Bor Ya meanwhile, is a self styled cricket specialist, a researchfellow at the Central Lancashire University, attached to the TimesGroup for some reason. Known to be a cricket writer, he should stickto research and not offering perfunctory expert advice on the gamethat we love. Charu Sharma has been around forever, he is like PeterPan, keeps popping up on different channels at different times. Tillnot so long agao, he was Times Now, but with Sidhu in the saddle now,he has relocated to Headlines Today. All three need to be kept 100yards away from a television screen. In the old days, we used to haveAtul Premnarayen who was the tennis guru, he would bring us reportsfrom Wimbledon on the radio. This was an age when live telly feeds didnot exist. Atul wasn't a bad bloke (I knew him personally), but he wasa a terrible commentator who would talk, talk and talk.
Everyone is an expert on cricket in India. It is not necessary that wesuffer such monumental gabathon meisters. The problem is that the IPLlasts 45 days, only to give way to the T 20 World Cup beginning onApril 30 in the West Indies. So, the news telly wallahs will continueto inflict pain and punishment on us poor telly watchers. Anyway thoseof us who aren't into telly masochism will just tune off. Wind downthe needle Slam dunk Sherry and Bore Ya or you will find yourselfturfed out by the studio bosses. They have short memories for thosewho are part of the shouting brigade. Which reminds me, time for anap...zzzzzzzzzzzzzzzzzzzzz. After all my head is still ringing.

(IMPACT)

VJM's largesse remains unparalleled

BEHIND THE NEWS

Liquor baron Vijay Mallya whose corporate guarantee islikely to be encashed by Hindustan Petroleum on the government's sayso due to rising unpaid jet fuel bills carries on in his ownflamboyant style. Mallya's Kingfisher owes HPCL Rs 602 crore andchange. On March 17, the oil ministry shot off a missive to HPCLasking it to convene a special board meeting to invoke Mallya's Rs 250crore corporate guarantee to recover a part of the airline'soutstanding dues. But that has not deterred Vijay mallya fromcontinuing with new sponsorship deals with IPL.
The much hyped after match parties replete with fashion shows arebeing sponsored by Kingfisher. Mallya has reportedly forked out Rs 12crore for this deal. Which is small change for a man like him, eventhough he owes crores to oil marketing companies. The catch is thatthe home team has to show up at the party and all the liquor that isserved is UB brands. The entire amount goes into the central revenuepool and is shred equally by the eight teams. This is yet anothernovel innovation introduced by Lalit Modi. Top fashion designers hawktheir work while top models scorch the ramp in this heady cocktail ofcricket, B Town and the fashion world.
Giving yet another twist to this operation is the fact that theorganisers are selling a limited number of ‘club lounge’ tickets ateach venue that includes chauffeur-driven pick-up and drop, drinks,dinner, a fashion show and this same late night IPL bash. The samebash then surfaces as IPL Nighjts on MTV where the celeb, glitterratiand swish air kiss one another. These tickets cost the earth - as muchas Rs 40,000. It is believed that actor Arjun Ramphal and his modelwife Meher Jessia are behind the post match party concept and theirfirm has tied up with IPL for this exercise. Designers NanditaMahtani, Ramona Narang, Rocky S, Anamika Khanna, Manish Malhotra et alhave showcased their work at these parties. Actor Vivek Oberoi wasrecently seen at a Kings XI party, as he came out to promote his newTips' film Prince which is releasing on April 9. There will be 55 suchparties at this year's IPL.

What about the reverse takeovers?

CAPITAL VIEW

Too much of bubbly being uncorked

Even as we celebrate the increasingly acquisitive nature of Indianindustry as they unveil their transnational ambitions overseas, thereis a silent predator enlarging his scope of business and footprint ofoperations here in India. The predator continues to knock on ourdoors.Yes, cross border transactions are a two way street in this hijinks world of new age commerce. And as we buy companies abroad, thelatest instance being Bharti's pouching of Zain's operations inAfrica, big ticket acquisitions are being made by foreigners at home.Swadeshi flagships which have assiduously built businesses at home arefalling prey to this phenomenon of a two sided deal street.
One can pause and argue that this is the nature of the beast, for ifwe go out and buy companies abroad, how can we prevent the same fromhappening in our own backyard? After all that is globalisation. But ithurts, it leaves a void and very bitter after taste. ACC, GujaratAmbuja, Ranbaxy, Maruti Suzuki albeit through the process of strategicsale or disinvestment, Mphasis, i flex et al have all been swallowedby foreign companies. In fact, 32 per cent of Bharti is also owned bySingTel. In a study conducted in 2000 by Lehman Brothers, it was foundthat, on average, large M&A deals cause the domestic currency of thetarget corporation to appreciate by 1% relative to the acquirer's. Forevery $1-billion deal, the currency of the target corporationincreased in value by 0.5%. More specifically, the report found thatin the period immediately after the deal is announced, there isgenerally a strong upward movement in the target corporation'sdomestic currency (relative to the acquirer's currency). Fifty daysafter the announcement, the target currency is then, on average, 1%stronger. Interesting, no?
So, while we are gung ho about Corus or Novelis or a Jaguar LandRoveror an Imperial Energy, we too are losing Indian homegrown, homespunand entrepreneur jumpstarted companies with scale and size. Companieswhich don't only give the acquirer a sizeable toehold in the Indianmarket, but offer a window of global opportunity in some cases to thesame acquirer. This reverse acquisition process is a cause forconcern. Obviously one cannot build barriers. But even then a matterwhich requires some mindspace attention. ACC, Gujarat Ambuja andRanbaxy are three shining examples of Indian entrepreneurship, but allthree have been lost to Holcim and Daiichi Sankyo. One can justifythis by saying that they are casaulties of war, because as we get moreand aggressive in our intent to garner mass abroad, this is bound tohappen. Hemant Luthra of M & M once explained this phenomenon to me,he argued that as companies go into Chapter 11 (bankruptcy) in thewest, Indian companies with aspirations to build global businessessense an opportunity to enlarge their swathe and pick them up.Unfortunately, when the reverse holds true, we tend to lose sight ofthe fact that nearly all such Indian companies bought have been basedon the entrepreneurship model. This includes Mphasis and i flexSolutions.
While reams of research is being done on the rise and rise of Indianmultinationals, we are losing sight of the same happening to ourcompanies at home. MNCs in India now have a garrotte like grip onapproximately 40 per cent of the turnover of the top 20 companies inIndia. Indian operations of several global heavyweights like Suzuki,Bharti, Gujarat Ambuja, Vodafone among others are examples of thismantra. Thums Up which was sold by Ramesh Chauhan long before reformsand globalisation became that much a part of our free speech was thefirst such brand to be subsumed by a MNC, in this case Coca Cola.Lakme, Kissan, Hamam and Kwality are other such examples of strong andpowerful brands which have fallen prey to the same acquirer -Hindustan Unilever. Look at the way Swiss cement giant Holcim has leapfrogged over its global competitors - Lafarge, Cemex and Italicementin India. Systematically, it has built up scale. With ACC and GujaratAmbuja, Holcim acquires a pan-Indian presence and a control overcapacity in excess of 35 million tonnes, which accounts for 25 percent of the industry. Holcim's presence is especially dominant in thewestern and northern markets. Agreed that they paid top dollar, butunlike Malvinder and Shivinder Mohan Singh who are using the resourcesmade available by Daiichi to propel new businesses forward, theSekhsarias and Neotias are not exactly doing the same. At least not inpublic eye.
There is some learning that needs to be transposed through thisprocess of sale. While I am dead against iconic Indian companies beingsold, you can label me a purveyor of 'swadeshi' thinking, but as longas the sale proceeds are being used to further new business ideas,then there is some merit in the argument. Otherwise, exiting a fullyfunctional and profitable business is a no brainer. Look at Indiantelecom - of the big five, Bharti has 32 per cent SingTel ownership,Vodafone Essar is majority owned by Vodafone, Tata Docomo has 26 percent NTT Docomo shareholding for which it forked out $2.7 billionwhile only R Com and Idea Cellular remain truly Indian. In the greatIndian automobile bazaar, barring Tata Motors and Mahindras,everything is firang.
In the end, let me leave you with another unpleasant thought -Heineken has a 37.5% stake in market leader United Breweries, which itacquired as part of its purchase of U.K.-based brewer Scottish &Newcastle PLC together with Denmark's Carlsberg A/S in 2008. For nowVijay Mallya also holds 37.5% stake in the maker of Kingfisher beer.While glitches in the rocky relationship between the two were resolvedlate last year, business dealing dynamics are often fluid and openended. Perhaps, this is the next frontier...

Empty romanticism coming true

BEHIND THE NEWS

Lalit Modi is a dreamer. In the prospectus of the originalauction in 2008, Modi dreamt his dream big. He promised that the firstlot of owners would be “regarded as pioneers in the greatest nationalsporting and entertainment adventure ever undertaken.” Over the lastthree years, he seems to have kept his word, the odd hiccoughnotwithstanding. Prospective bidders were inundated with data thatclearly underlined that the franchises would soar in capital value andmake handsome profits. As the London Times reported, "The salesbrochure referenced the world’s most valuable sports teams. Onetypical allusion was to how George Steinbrenner bought the New YorkYankees in 1973 for $10 million, and has seen the baseball team’svalue balloon to more than $1 billion in Major League Baseball. Whatseemed like empty romanticism is proving to be a darling of investors,corporates, advertisers, sponsors and essentially the bulge bracketmoney frat. If you want to be seen, then you have to be on IPL is thenew chant.
IIFL or India Infoline which has been tracking the IPL expects season3 also to make money hand over fist for all its stakeholders. A newreport by the brokerage reckons that since ratings and revenues aresoaring, correspondingly the stakeholders will be awash with cash.This new kind of R & R is good news for Modi and his franchise owners.IIFL expects most franchises to likely make an improvement in profitsfrom 2009 driven by higher ticket and merchandising sales and loweradministration costs. The tournament's return to India has galvanisedactivity in and around the brand, adding ballast to its salience. Assportzpower has been prognisticating, Rajasthan Royals, on the back ofits low franchisee fees and player fees looks to be the mostprofitable franchise.
The report states, "Kolkata, Chennai, Delhi and Punjab would alsobenefit from their lower franchise fees (Rs35-42 crore) while the highfranchise fees for Mumbai and Deccan is likely to be a minor drag onprofits (Rs49-52 crore). Deccan is likely to see a spurt inmerchandising sales on the back of its victory last year, while thestar quotient of owner Shahrukh Khan will benefit Kolkata. In a normalyear we see profitability of the teams ranging from ~Rs19 cr to Rs43cr."
"We expect overall ad-spend on the telecast of the IPL to increasefrom an ~Rs500 crore in 2009 to Rs700 crore in 2010. This year's eventis also witnessing some firsts in terms of live online and theatricaltelecast, which is likely to further boost the revenue streams. IPLfranchisee owners are set to make impressive profits in 2010 - weestimate EBIDTA of the teams to range in ~Rs19 crore-Rs43 crore.Building on the increasing popularity of the event after two years ofsuccess, IPL teams have become hugely valuable to their franchiseeowners. Franchisee level stake sale and aggressive bids for two newteams suggest valuation for franchisees are ~$140-250mn, which is2-3.5x the original bid amount," the report added.
Emerging Media owners of Rajasthan Royals hawked 12% of their stake ata valuation of $140m against an original bid of $67 million. On a baseprice of $400 million, a sum total of $700 million was generated. Thistime two franchise brought in more at $703 million. The base price forthe new IPL teams at $225mn was 2-3.5x of the original bid amounts ofthe existing e ight teams. And the purchase prices of $333.33 millionand $370 million throw into stark relief further buoyancy, at 3 to 6xof the original pricing in season 1. IPL teams are likely tocontribute 5-10% of EBIDTA for the owner and ~30% of marketcapitalisation. The sharp Year on year jump in valuations of thefranchises and the increasing popularity of the blue riband propertyaugur well for the owners. But only the early bids who caught theworm. Higher entry costs will mean debilitating figures and break evenfor them coming after year 3.

Not obsessed with one another, yet focused...

GROUND ZERO

A NEW BEGINNING

Both the top players in the GEC sweepstakes - Star Plus and Colors -claim that they are not obsessed with one another. They will also tellyou that their strategic imperatives for the genre are independent ofthe other's battle plans. But surely it cannot be that simple. Afterall, in a water tight genre where no quarter is given and none askedfor, neither can be oblivious of the other. For Star Plus, it is thatmuch more important for they ruled the satellite waves for nine longyears. But since the end of the saas bahu marathons, and the entry ofnewbies like Colors and a rejuvenated Zee, the GEC landscape has changeddramatically. The viewer has become more discerning and with channelswaking up to the fact that audience tastes are constantly evolving,the business is on a knife’s edge.
The tipping point has been achieved by Star India after CEO Uday Shankarrealised that at the very kernel of the new programming strategyneeded to be marketers. What he did was bring Sanjay Gupta fromAirtel, appointed him COO for Star India and added some more ballastby roping in SC Johnson US's Anupam Vasudev as EVP MarketingCommunication. Ironically, both Gupta and Vasudev are alumnus of theHindustan Lever school of management. Yes, both worked together atHLL, once India's premier management training ground. What both Guptaand Vasudev have done is bring a marketing criticality to thebusiness, understanding the audience perception and tastes anddelivering a programming mix which seems to be working. Everythingmight not be paying in spades - Mahamuqabala lukewarm and Mahayatra adamp squib, but good old food and drink shows Bidaai and Yeh Rishtaare providing the much needed succor for Star Plus. Actually, theturning point was the hasty closure of gangbuster show Sach Ka Samnaunder pressure from the moral brigade. Somehow or the other, Star wasnot able to come to grips with the reality of the winding down Sach.But sooner than later pieces are picked up, recalibration completedand new battleplans put in place.
On your face, both channels will claim that they are not splurgingmoney to buy TRPs, but the cost of programming is going up and notdown, contrary to stated positions. Rajesh Kamat, in many waysinstrumental in making newbie Colors a success in such a short span oftime even as other wannabes - NDTV Imagine, Real and 9x - collapsedunder the weight of their individual contradictions reckons thatColors dominated for 22 weeks because of the programming mix. He says,"Both Star and Zee were bound to catch up. There will be a see sawlike situation in GEC. Others will make comebacks, just as we will, itis nothing short of a psychological battle. Advertisers buy ratings ofthe shows. My understanding is that we will see another year of suchwafer thin margins as everyone puts his best foot forward. Also, it isa ‘seasonal market’ and a three player game."
Interestingly, it is believed that Colors has already broken even,which is staggering given that it has been up and running for merely15 to 17 months.Yes, over the last two weeks, Star Plus has made astrong comeback, displacing Colors after 22 consecutive weeks of bluesky leadership. The introduction of marketing mindsets in Star Plus isone of the reasons for this change. For week 10 of the new year, StarPlus ledwith GRPs of 316, marginally ahead of Colors with 311. The previousweek saw Star Plus emerging as the leader after a 22 week hiatus with300 vs Colors 286 GRPs. What is pertinent here is that in week 10, Zeewasn't too far behind with 301. Tells you something about the cutthroat competitive set that Hindi GEC is turning into. I decided tofind out more about this turnaround. Anupam Vasudev, executive vicepresident Star India says, "We aren't chasing weekly ratings, we wouldinstead like concentrate on building and focusing onour core shows Bidaai and Yeh Rishta. Our strategy is clearly to focuslong term, weekly fluctuations will occur and we will choose todisregard that. The key for us is to focus on the viewer and not onthe competition. We are not in any way responding to our rivals Colorsor Zee. This seesaw battle might not end, it will remain in the shortterm, but if it evolves into a permanent leadership role over time,then we will be happier."
Yeh Rishta Kya Kehlata Hai with a a TVR of 7.1, its highest rating in27 weeks and Bidaai with a TVR of 6.9, its highest rating in 49 weekshave been at the vanguard of this change. Contrary to popularperception Maha Muqabla and Mahayatra have not worked. Music KaMahamuqabla managed only 2.2 while Mahayatra did only a tepid 0.6. Good oldfiction continues to pump prime this segment effectively. For Colors,Balika Vadhu and Uttaran remain the bulwark of their programmingthrust. Kamat's response is, "By offering a mix of food and drinkfiction and stellar properties which kicked off dinner tablediscussion like Akshay Kumar’s Fear Factor or Amitabh Bachchan’s BiggBoss, our products offered us imagery of the kind hitherto not seen ona new channel. The 300 to 310 GRP band will see a lot of activitygoing forward. Our staple shows are delivering, the top 2 provide TVRsof 5 while the next three shows deliver TVRs of about 3. We are happywith our performance, the IPL shows like IPL Rockstar will now take usto the next level. Rockstar over the weekend should be a killerapplication."
Many analysts offer an analogous relationship with the FMCG categorywhere leadership of products is threatened almost on a daily basisresulting in turmoil and constant brand upgradation, repositioning andreorientation.Vasudev reckons that Star Plus successfully and almost unobtrusivelymanaged to refresh its portfolio by keeping in mind the core of itsviewership. Once again Vasudev is at pains to negate the me toohypothesis. As he explains, "New shows need to be differentiated, sowe are very careful to carve our own path and not follow anyone oranybody." So, while the high performance show Mahamuqabla got decentratings, Mahayatra floundered. Now Star has a new show Sasural GandePhool on the anvil. It is also in the process of unveiling a new highprofile Bollywood show over the next six weeks with two hours weekly on theStar Cintaa (Cine & TV Artiste Association) platform called calledStar Cintaa Sitaron Ke Saath. These shows could provide the muchneeded breakthrough benefit to Star. The show promises to have thewhole galaxy of stars literally coming together to celebrate 50thanniversary of Indian Cinema and its progression. Watch out for theveterans, legends & the new generation of Bollywood coming together tonarrate their experiences, special moments, give anecdotes, and sharetheir journey down the year. The show promises to be the biggestcelebration of Cinema and Television as never seen before with faceswho have never come together before for one purpose, one event, onecelebration. While Shahrukh Khan, Amitabh Bachchan, AvbbhishekBachchan, Salman Khan, Shahid Kapoor, the piece de rsisitance is thereclusive Aamir Khan who has agreed to perform for the first time inyears.
Star’s Sitaron Ke Saath will go head to head with Colors three yeartie up with IPL. But let Kamat take up the narrative, "Our first fourshows are locked, there is a lot more that we are conceptualizing, theIPL franchise gets a year round extension.Fear Factor will get a twist and it is certainly worth the money thatwe have spent. We are not spending money to buy TRPs, that is not alogical thing to do. Over 52 weeks we have unlimited access tocricketers and Bollywood stars who are involved in IPL. Theprofitability on each and every show will be different, we are lookingat the aggregate of the imagery that this tie up provides in the firstyear.
“But the biggest driver will be the next Fear Factor IPL edition to belaunched this September. This time round we will have 13 cricketers –Indian and international instead of models and actresses. Theprogramme will be shot in Brazil and we are tying with variouscricketers for a 15-20 day shooting window. We believe this will be anovel show with top ranked cricketers going head to head with oneanother in a show hosted by the Khiladi himself – Akshay Kumar.”
Against this backdrop, the Colors-IPL deal is most dynamic. As Kamatsays, “It is a three year deal and while I am not at liberty todisclose the amount paid, let me add that we believe it was the rightamount for this kind of access card. We will kickstart our operationswith IPL Rockstar which is very much on the lines of the Super Bowl.We want to plug and play into the carnival like atmosphere that existsat IPL venues. We have given the formatting considerable study andreckon that in the hour and a half that spectators spend inside thestadium before the 8 pm game, one has access to a large captiveaudience. Most people come in early and so just sit there awaiting thegame’s start. We have planned to create entertainment for thesepeople. Basically build a good show with a concert feel.
”So, winners of various talent shows will come together on thisplatform, Hard Kaur is the anchor while Kailash Kher and Sukhwinderare the judges while Bollywood celebs linked to IPL will visit thesevenues and the Rockstar platform will be richer from their presence.The programme will be aired on Saturday and Sunday only. From a brandand channel standpoint, we reckon that we can activate new markets forthe channel. For instance if the game is in Ahmedabad, the Rockstarshow will be a buzz driver for the channel. We will use thisprogramming bulwark to connect with audiences on the ground.”
Interestingly, while Colors and Star Plus may not be obsessed with oneanother, one cannot ignore the possibility of the third entity in thistroika – Zee – blindsiding both and sneaking though. All, in allinteresting times for no show is willing to take the viewer forgranted. Everyone reckons that audience evolution is the singlebiggest determinant. In fact, Sony or Multi Screen Media CEO ManjitSingh said as much to me when he agreed that Sony had ignored theemergence of new urban agglomerates with different taste buds. So,while Sony’s gambit of Yashraj telly may have failed, expect theunexpected from the GEC telly wallahs in the next year or so.
(IMPACT)

Paisa, paisa...

RETROFIT

The IPL money riddle

Over the last couple of days, the IPL auction has emerged as the hotbutton subject. Just about everyone has an opinion on it. There areothers who are extremely cynical about the entire thing. But what onecan run away from, but not hide is that it is a raving success. Forteam owners, sponsors, advertisers, broadcasters, viewers, spectators;the IPL economy has a buzz about it. More so because it is back home.Many people have called me and asked me whether Sahara Adventure andRendezvouz have paid too much for the new franchises? Yes, maybe theyhave, given that Emerging Media (Rajasthan Royals) coughed up $67million for 10 years three summers ago. Let me do the math for you. At$67 million, the franchise is a steal, for it works out to $6.7million per year. If you adjust that for today's exchange rate, it isRs 29.82 crore. Shahrukh Khan also paid a relatively small sum ofmoney in season 1 - $75.09 million. Can you make money, well that isthe question dominating everyone's mindspace these days? At $370million, this is the way it breaks down for Sahara. He has tobasically fork out $37 million per year. Now that is a lot more than$6.7 million per annum. How do the franchises make money is then themillion dollar question? Simple.
The franchise owners are subsidised by the cricket board and itsextension IPL. This is the way it works: Broadcast revenues for onewere subsidising the franchises till the end of season 2, but inseason 3, Lalit Modi has shown his worth as a marketer. He has workedhis numbers in such a way that by clinching a panoply of new deals, hehas managed to double the central revenue pool. Each franchise ownerwas given Rs 67.5 crore from this pool in year 2. But with the catalogue of newdeals - youtube, Colors, Karbonn, Maxx, MRF, vRock et al; Modi has managed tomake this particular revenue stream closer to Rs 130 crore foreach team owner. Now believe me that is a Godsent. So, if RajasthanRoyals has to pay a fixed cost of $6.7 million only and in turn isgetting Rs 130 crore from the central revenue pool, then that is apositive start. There are other revenue streams that open up when youplay in India which I will detail in a bit. Of course, there is theoperating expenses part which is equally heavy, but if you are smartand some of these franchises are, then there is no way you can losemoney. Entry cost is critical, the lower the better. That way thearithmetic is in the black and not in the red. People who bought thefranchises earlier and cheap stand to benefit. But even Mukesh Ambaniwho paid the most - $111.9 million or approximately Rs 447 crore forksout only Rs 44.7 crore as franchise fee annually to BCCI.
What are the major heads that one needs to look at? Revenues andExpenses obviously. Under revenues there is - broadcasting rights nowread central revenue pool, team sponsors, other income which is gatereceipts, in stadia advertising, merchandising sales, media tie upsand prize money. Under expenses there is - franchise fee, stadia fees,team eco system expenses which includes sales and marketing employeecost as well as players and support staff payments, team prom otion,travel and hospitality cost and other variable expenses. Teamsponsorship is also going gangbuster in 2010 and the general averageis expected to be closer to Rs 40 crore for each team with MumbaiIndians and KKR leading the way with Rs 50 crore or thereabouts. Thisis up from an average of Rs 24 crore last year. By making a connectwith different social strata, IPL has proved to be a killerapplication. Another novel concept this time is the in stadia bigscreen advertising during the games. A very innovative revenue stream.Last year with the tournament shifting to South Africa, logicsuggested that the team owners lost money, but IIFL research saidotherwise. I must add that several clubs were given additional handouts by IPL reimbursing them for hospitality and travel expensesincurred in South Africa. While some of these figures are in publicdomain, others have not been quantified.
What Lalit Modi has done in season 3 is show us how to skin the cat inat least a dozen new ways. Take the ITV deal for UK broadcast rights,again slice and dice. Ditto for the deal with UFO Moviez which gavethem theatrical rights for the IPL and paved the way for multiplexesto show the matches. Though this has proved to be adamp squib, anotherrevenue stream was added by Modi. Fragmenting and slicing the rightspie which rested with IPL and Modi have been monetised efficiently.For season 2, IIFL suggested that each one of the eight sidesreportedly madeprofits which is a considerable improvement over season 1 when onlyRajasthan Royals, Kolkata Knight Riders and Chennai Super Kings made aprofit. And this was contrary to popular perception which said thatall the teams would lose money because the event was staged in SouthAfrica. But the figures revealed a different story. The broadcastingrevenues were directed to a central pool, 40% of which went to IPLitself, 54% to franchisees and 6% as prize money. The money will bedistributed in these proportions until 2017, after which the share ofIPL will be 50%, franchisees 45% and prize money5%.
The IPL signed up Kingfisher Airlines as the official umpire partnerfor the series in a Rs 1.06 billion deal. DLF coughed up Rs 200 astitle sponsor for five years while Pepsi paid $12.5 million to becomethe beverage partner. Of this, $2.5 million went to the eightfranchise owners every year. Last season, Rajasthan Royals made aprofit of Rs 351 million while KKR made a profit of Rs 258 million;Kings XI Punjab Rs 261 million. In 2008, it is believed that teamslike Kolkata Knight Riders, Mumbai Indians and Delhi Daredevils earnedaround Rs 20 crore from ticket sales alone as the capacity of theirhome stadia was larger. With ticket prices going up, KKR (EdenGardens), MI (D Y Patil stadium), DD (Feroshah Kotla) are expected toearn in excess of Rs 25 crore this year from gate receipts. Accordingto the report by equity research firm IIFL, Team Jaipur made thehighest profit of Rs 35.1 crore in the group matches of the secondedition of the tournament. Jaipur had also made the second-highestprofit of Rs 14.50 crore in 2008, including the Rs 4.50 crore ($1million) prize money.
Throw in the prize money sweepstakes and though they don't comparewith T 20 Champions League, they are sizeable. The winner's purse in2010 is a hefty Rs 4.8 crore, Rs 2.4 crore for the runners-up and 1.2crore each for the losing semi finalists. For those who didn’t getpast the league stage, the sums earlier were much smaller - Rs 80lakh for the team that finished fifth (Kings XI Punjab), Rs 70 lakhfor the sixth placed (Jaipur), Rs 50 lakh for the seventh (MumbaiIndians) and Rs 40 lakh for the wooden spooners. The healthybottomlines are a happy change from season 1 when besides KnightRiders and Jaipur, Chennai Super Kings crawled into the black due tothe Rs 2.4 crore prize money for ending up as the losing finalists. Asfranchise owners begin to get the hang of the way the system works,the money machine will also chug along nicely. The problem though isfor the new franchise owners who will have to bear the cross of a muchhigher entry cost - Kochi at $33.33 million (Rs 148.3 crore) and Puneat $37 million per annum (Rs 164.6 crore) For these two newfranchsises, it could well be like Sisyphus as he attempts to roll theboulder up the mountain. Sisyphus, King of Corinth, was given anassignment to roll a great boulder to the top of a hill. Only everytime Sisyphus, by the greatest of exertion and toil, attained thesummit, the darn thing rolled back down again.
So, could be the fate of the new team owners. For the stiff entry costis the biggest impediment in their grandoise design. Despite the piehaving been made more lucrative by Modi, there isn't enough on thetable to take away for the newbies. But the early birds havedefinitely got the worm. And perhaps the cream as well. As they say inHindi - kya yeh gate ka sauda hai? Time will tell?
Here is the break up for each franchise in season 2. I would like toadd a caveat here that though an equity research firm has put outthese numbers, one still needs to take them with a pinch of salt:
(Profit/Loss - (Rs Million)
MUMBAI INDIANS


a. Broadcasting Rights - 675b. Team Sponsors - 240c. other income - 140d. prize money - 5
Total Revenues(a+b+c) - 1060
a. Franchise Fees - 515b. Team Expenses - 200c. other expenses - 275
Total Expenses(a+b+c) -990Net profit - 70
ROYAL CHALLENGERS, Bangalore


a. Broadcasting Rights - 675b. Team Sponsors - 240c. other income - 135d. prize money - 22.5
Total Revenues(a+b+c) - 1072.5
a. Franchise Fees - 516b. Team Expenses - 200c. other expenses - 275
Total Expenses(a+b+c) - 991Net profit - 81.5
DECCAN CHARGERS


a. Broadcasting Rights - 675b. Team Sponsors - 240c. other income - 135d. prize money - 45
Total Revenues(a+b+c) - 1095
a. Franchise Fees - 492b. Team Expenses - 200c. other expenses - 255
Total Expenses(a+b+c) - 947Net profit - 148
CHENNAI SUPERKINGS


a. Broadcasting Rights - 675b. Team Sponsors - 240c. other income - 185d. prize money - 12
Total Revenues(a+b+c) - 1112
a. Franchise Fees - 419b. Team Expenses - 200c. other expenses - 275
Total Expenses(a+b+c) - 894Net profit - 218
DELHI DAREDEVILS


a. Broadcasting Rights - 675b. Team Sponsors - 240c. other income - 147d. prize money - 12
Total Revenues(a+b+c) - 1074
a. Franchise Fees - 386b. Team Expenses - 200c. other expenses - 255
Total Expenses(a+b+c) - 841Net profit - 233
KINGS XI PUNJAB

a. Broadcasting Rights - 675b. Team Sponsors - 240c. other income - 143d. prize money - 8
Total Revenues(a+b+c) - 1066
a. Franchise Fees - 350b. Team Expenses - 200c. other expenses - 255
Total Expenses(a+b+c) - 805Net profit - 261
KOLKATA KNIGHT RIDERS

a. Broadcasting Rights - 675b. Team Sponsors - 240c. other income - 189d. prize money - 4
Total Revenues(a+b+c) - 1108
a. Franchise Fees - 345b. Team Expenses - 200c. other expenses - 305
Total Expenses(a+b+c) - 850Net profit - 258
RAJASTHAN ROYALS

a. Broadcasting Rights - 675b. Team Sponsors - 240c. other income - 142d. prize money - 7
Total Revenues(a+b+c) - 1064
a. Franchise Fees - 308b. Team Expenses - 200c. other expenses - 205
Total Expenses(a+b+c) - 713Net profit - 351
All figures are in Rs Million
Other incomes include gate receipts, in-stadia advertising,merchandise sales, and media tie-ups
Other expenses include stadia fees, travel, stay cost and team promotion
Source: IIFL Research

IPL ahead of curve

NEWS ANALYSIS

MLB, NBA, NFL, EPL and now IPL

New Delhi: Now that price discovery through the fresh team auction hasbeen completed, existing franchise owners are sitting pretty. WhenBritish businessman Raj Kundra bought 12 percent equity in EmergingMedia for $15 million and change, the valuation of the franchisepractically doubled from its purchase cost of $67 million to $140million. Deutsche Bank's Anshu Jain also reportedly picked up 15percent stake in Mukesh Ambani's Mumbai Indians, but this was neverconfirmed or denied. But at $333 and $370 million respectively, thebar has been raised substantially for new investors wanting to bitethe bait. Venugopal Dhoot whose V C Digital lost out in the biddingsweepstakes with a bid of $320 million is now keen to partner one ofthe existing franchises. Dhoot says that he is disappointed at theoutcome - twobids of $310 million and $320 million in the aborted and fresh auctionrespectively have come to nought. So, next move is clearly to partnerone of the existing franchises.
Expect a lot of activity in the coming months leading up to the freshplayer auction in September-October. Not only will the player caps behiked, but investor activity will peak. So, expect a Pawan Munjal forinstance to pick up a stake in Kings XI Punjab or a Videocon to pickup a stake in another one of the franchises. Adar Poonawala who waskeen on picking up stake in a consortium backed out last minutebecause he wanted 30 to 35 percent in the franchise and not a muchsmaller 10 to 15 per cent stake. As he told me, "It is pointlesstaking equity in a fragmented shareholding. One needs to have somesort of management control and management say if one is making asubstantive investment, otherwise what is the point? You cannot exertcontrol or exercise influence?"
While this sentiment will be a determining factor going forward, thereis another facet to the valuation game. At the end of three years,franchise owners can exit from their franchise. This will open aPandora's box. If say hypothetically a franchise owner wants to exit(perhaps not after these rich valuations) and a buyer emerges, then asale can well be consummated. Phase two of this valuation game willsee either partnerships as people who did not get a chance to grab afranchise seek to make their tryst with the IPL tamasha or if a sellerarrives in the market, an outright sale also cannot be ruled out. Ofcourse, pricing now will be a big issue.
Phase three will see the public listing of IPL franchises. First offthe blocks will be Indian cements owned Chennai Super Kings which islooking at an IPO in 2011. Other franchises who are reportedlythinking on these lines are Vijay Mallya owned Royal Challengers, TVenkat Ram Reddy owned Deccan Chargers and Mukesh Ambani owned MumbaiIndians. This will be the last price discovery exercise. Last yearForbes ranked the top soccer clubs on valuations. And boy were theyrich - Manchester United $1.87 billion, Real Madrid at $1.35 billion,Arsenal $1.2 billion, Bayern Munich $1.11 billion, Liverpool $1.01billion, A C Milan $990 million, Barcelona $960 million, Chelsea $800million, Juventus $600 million and Schalke 04 $510 million.Interestingly Inter Milan ranked 14th on the list was valued at $370million, the same as Sahara's bid for Pune. Hamburg SV was ranked 15that $330 million less than what the relatively unknown consortium forKochi has bid.
Lalit Modi modelled his league on the lines of top city and statebased franchises around the world. Namely EPL, NFL, NBA and MLB. Thatis where he got the inspiration from, he claims. Though SubhashChandra showed the way to the BCII and Modi really. Now let us compareour IPL valuations to the highly popular NFL in the US. Dallas Cowboyswho were ranked number one in the Forbes valuation list was worth $1.65 billion followed by Washington Redskins at $1.55 billion whileNew England Patriots came in third at $1.36 billion. Let us alsounderstand that these leagues have been around forever, while the IPLis only two and a half seasons old. The big buck NBA has Los AngelesLakers valued again by Forbes at $607 million, followed by ChicagoBulls at $511 million and Detroit Pistons at $479 million. Which meansour IPL compares more than favourably with the NBA. Finally, let uslook at Major League Baseball franchises - New York Yankees are valuedat $1.5 billion, New York Mets at $912 million, Boston Red Sox at $833million, Los Angeles Dodgers at $ 722 million followed by Chicago Cubsat $700 million.
Bottomline, all these sporting leagues have been around forever andfor a nascent IPL to rig up such valuations in a short span of threeyears is extremely creditable.

Price discovery gives way to public issues

IPO Yatra to begin shortly in IPL

NEW DELHI: With valuations out of the way, can Initial PublicOfferings be far behind? Investment banking interest has perked up inthe wake of the rich valuations discovered through the two teamauction. Sources close to developments have revealed that at leastthree city based clubs are looking at the possibility of IPOs or stakesales in 2011. With the doubling of the central revenue pool courtesymore broadcast revenue share as also new vistas being explored throughnew monetisation opportunities like the licensing deal with Colors -$130 million over three years, MRF for the blimp, Karbonn Mobiles,Maxx Mobiles, youtube et al, operating profit levels are expected toramp up significantly as sportzpower has been outlining. Moreover withthe IPL returning to India gate receipts and advertising revenuesthrough in stadia and team jersey deals have also shot upconsiderably.
In the run up to the new player auction sometime in September-October,expect many stake sale deals being firmed up. The three year cap onsale of a team also ends with the conclusion of season 3. Till nowonly 49 percent stake could be offloaded by a franchise. Investmentbanking sources on condition of annonymity stated that N Srinivasanowned India Cements Ltd, which owns M.S.Dhoni-led Chennai Super Kings(CSK) directly, is likely to be the first to get the Chennai basedclub listed on stock exchanges as a separate entity.
As sportzpower has mentioned earlier, at a recent investor conference,the CSK owners outlined this imperative. CSK along with KKR was one ofthe few sides in season one to stay in the black. BCCI secretary andIndia Cements vice chairman and managing director N. Srinivasanhowever, has termed these reports as speculative. Similar speculationhas been doing the rounds about Kings XI Punjab where Karan Paul, NessWadia Mohit Burman and Preity Zinta are co owners could be in theprocess of divesting equity to Hero Honda's Pawan Munjal. Both sideshave been denying this vehemently. Earlier it was reported that Munjalhad bought out the entire shareholding for $260 million, but thatcould not happen till the culmination of season 3. It is certainlypossible anytime after April 25. But the valuation has just gonethrough the roof.
Subroto Roy promoted Sahara Adventure Sports, which stunned everybodyby bidding the highest for the Pune franchise on Sunday has also notruled out the possibility of an IPO or a selling minority stake to astrategic partner. “There are umpteen opportunities such as an IPO orselling stake to a new partner. Its too early to talk about it now,”Abhijit Sarkar Corporate Communications head,, Sahara India Pariwarsaid. By roping in the Bachchans, Roy will surely pump prime theclub's glam quotient and valuation.
The other sides which could look at a listing in 2011 are reportedlyVijay Mallya's UB Group owned Royal Challengers and Deccan Chronicleowned Deccan Chargers. Before DC won the title in 2009, it was a nohoper side and was even reportedly put on the block. But it found thata valuation of Rs 1240 crore was a bit much for investors.Subsequently media buying house bought 20 per cent in the franchise.But it is known at what price.

Tower of babble

CAPITAL VIEW

There is a veritable tower of babble in the capital when it comes toeconomic speak. Instead of one voice and one entity talking oneconomic issues, we have multiple voices, more often than notdivergent, leaving policy wonks and analysts a befuddled lot in theirwake. Unlike P Chidambaram's tenure in North Block when his was theonly definitive voice on economic matters, there is confusion prevailing thesedays. And the din gets louder all the time as various policy czarspump up the volume. So, one obviously has the finance minister PranabMukherjee speaking, but then we have deputy chairman - PlanningCommission Montek Singh Ahluwalia, followed by newly appointed chiefeconomic adviser Kaushik Basu, finance secretary Ashok Chawla, PrimeMinister's Economic Advisory Council chairman C Rangarajan, country'schief statistician Pronob Sen and of course the RBI Governor fromMumbai's Mint Street adding to the prevailing confusion. Fortunatelythe new commerce and industryminister Anand Sharma prefers to keep to himself. In UPA 1, we hadKamal Nath in that role and he being articulate also indulged inecononmic speak, but limited himself to international matters.
Take the latest instance of RBI hiking the repo and reverse repo rate,signalling the beginning of higher lending rates on Friday. None ofthe afore mentioned worthies had a clue. The only man who provided adirect hint that a rate hike was imminent came from the RBI DeputyGovernor on Thursday itself. Each one of the policy czars has his owntake on economic issues and numbers. No two czars share a commonalityof thought process. What does this do to the financial marketplace?Given that the world is watching India as an investment destination, alot of bulge bracket investors have money riding on this country andthey are spooked when they hear disconnected babble. I am notadvocating that the government speaks sotto voce, but clarity ofthinking will emerge on government policy direction only if a handfulof designated individuals speak in the same voice.
You can argue that it is much worse in the Barack Obama administrationin the US. He has appointed a czar for just about everything. Name itand you have a czar - bank bail out, pay, energy, drug, regulatory,urban, US border, auto bail out, stimulus accountability, tech,performance, Iran, Middle East, Af-Pak et al - at last count therewere over 20 such heavyweights. Republican Presidential candidate andSenator John McCain was quoted as saying, "Obama has more czars thanthe Romanovs who ruled Russia for three centuries." While one cannotcomapre the US system with ours, thesheer volume of economic speak coming out of government buildings isscary at times. It often results in static.
Let me substantiate with some recent instances. When the inflationworm began its trek northwards, C Rangarajan a monetarist and a formerRBI Governor began to advocate RBI action to suck out liquidity.However, Montek Singh kept saying that inlfation was a function ofsupply side imbalances and time was not ripe for an interest ratehike. Look at GDP numbers - CSO said 7.2 percent, FM's mid term reviewin parliament said 7.5 per cent, the Economic Survey again tabled inparliament said 7.5 per cent, Montek stated in and around 8, RBIthought 7.5 percent going on to 8, Budget assumed 7.5 per cent again.On Budget day when GDP data for the third quarter came out at a woeful6 per cent, nobody was forthcoming with any ideas. Of course theearlier figures were the full year guidance while 6 percent were forthe third quarter only. But a negative agricultural number was reasonfor everyone to be acutely dismayed. Now let us turn our attention toinflation - RBI projected 8.5 percent for March, it is already 9.9percent. Government has insisted that food inflation will start comingdown in April, but WPI is within kissing distance of 10 percent inMarch. If that was the prognosis, then why did RBI jack up repo andreverse repo rates in March itself? Probably to prevent the economyfrom overheating and asset bubbles from tripping.
Bottomline, policy czars are not in consonance with one another. Onlythe FM and RBI should be speaking on economic issues, the rest shouldbe told to keep quiet.

(Afternoon Despatch & Courier)

Bulge bracket investors back with a bang

BEHIND THE NEWS

Just when you thought that cricket was losing its luminescence as a money multiplying vehicle, comes the news that bulge bracket investors are back to pump prime the game in the land. By forking out $703 million for two franchises on Sunday, it is a reaffirmation that the game's lustre is brighter than ever. Yes, to use Indian Premier League commissioner Lalit Modi's famous catch phrase - IPL is recession free. At $703 million, the combined bids of the eight franchsises in season 1 pale into insigificance. UK based Brand Finance Plc's astronomical valuation earlier this year of IPL at $4.13 billion now seems puny. Imagine that the combined valuations of the eight franchises calculated by Brand Finance in February 2010 was $333.33 million. The very same amount that Rendezvouz has paid for a team. According to the study, Chennai Super Kings (CSK) emerged as 2009's most valuable team with a brand value of $ 48.4 million, or Rs 224 crore, replacing Kolkata Knight Riders (KKR) at $ 46 million, or Rs 213 crore. Rajasthan Royals at $ 45.2 million, or Rs 209 crore, was third in the pecking order. The owner of CSK N Srinivasan had then said, “With IPL’s ratings and royalties on the rise, it doesn’t come as a surprise to me.”
Whenever a new act comes to town, cassandras doubt its sustainability, me included. A strange kind of sub tribal loyalty has taken root with jingoism being replaced by this radical new phenomenon. The club vs country debate went out of the window in double quick time. Yes, to everyone's surprise, the IPL seems like a an out and out winner. Imagine this is the first time in sport anywhere in the world that player auctions take place. Even in the high profile world of cash rich football, you have transfers but no public auctions.

In fact, its return to India after a one year hiatus appears to have lent it some ballast. On Sunday, Sahara Adventure Sports ($ 370 million) and Rendezvous World Sports ($ 333.33 million) paid a total of $ 703 million -- nearly Rs 3,235 crore -- to bag the Pune and Kochi franchises respectively and the amount is higher than the collective worth of Rs 2,840 crore of the original eight franchises. Think of what Emerging Media paid for Rajasthan Royals - $67 million and then think of what Subroto Roy has coughed up. But what the new price tags do is raise the bar for the existing franchsises. Simply because if two new franchises without teams or any other support infrastructure are valued at $330 million plus, then ergo imagine what the existing franchises are now worth? In many ways, it is the existing franchises who will be thrilled to bits at this value explosion. I reckon the base price is clearly $330 million for all existing eight franchises. The better teams RC, DC, MI would like to believe that they are worth $450 million each. So, a whole world, perhaps Pandora has opened up for these teams vis a vis valuations.

It is now increasingly clear that many of the franchises like Deccan Chargers, Chennai Super Kings, Mumbai Indians and Royal Challengers Bangalore are contemplating listings in 2011. By floating these entities, the true worth of these city based clubs will finally be known. First of the blocks will be N Srinivasan Indian Cements owned IPL subsidiary. It is believed that during their recent QIP placement investor meet, they have given a timeline for the float in 2011. The English Premier League on which the IPL is modelled is valued at $12 billion. manchester United alone has a valuation of $1.8 billion, Arsenal $1.2 billion, Liverpool $1.05 billion and Chelsea $764 million, according to Forbes. With the new richer valuations, IPL valuations will have to be reconfigured. They will be closer to $ eight billion now. That is awesome considering that IPL is only in its third season. EPL has a viewership of 600 million homes while IPL has a viewership of 37 million homes, with youtube opening up new vistas, EPL revenues are 2 billion pounds sterling while IPL revenues are not too far behind at Rs 11,000 crore, but EPL has 20 teams and IPL has eight only.

Modi was obviously preening like a peacock at the sight of these fancy amounts. He said, "I was indeed a little bit surprised by the amount. Honestly speaking, I thought the winning bid would be $ 300-320 million. So it was $ 40-50 million higher than my expectation. The bidders must have done their math very well." Sahara has zeroed in on Pune because its locational and logistical advantages. If you are wondering why it didn't choose Kanpur, then remember that Sahara's prestigious Aamby Valley project is right between Mumbai and Pune. Sahara's new cricket stadium will be on the periphery of Pune, in Gahunje, which is on the Mumbai-Pune expressway. A spanking new stadium is being built there with Shapoorji Pallonji being the principal contractor. Kochi doesn't even have a stadium at the moment. "Kerala Cricket Association is building a world class stadium. Till that is ready, IPL will provide an alternate venue," Modi said the addition of two more teams will take the total number of matches to 94 in the new season. That Subroto Roy would bid aggressively is something that one visualised. Although the strength of the bid stunned one and all. But it is the other bidder who has come in like a bolt from the blue leaving Videocon and Gautam Adani in its wake. Practically nothing is known about the winner of the Kochi franchise. There are five partners in this consortium - the Rendezvous group, Parini developers, Anand Shah Estate, Anchor Earth Private Limited and Film Waves - all of them unknown. Wires have reported that minister of state for external affairs Shashi Tharoor was involved in bringing together the group, but has no stake in the franchise. Speaking to reporters, Shailendra Gaikwad of Rendezvous World Sport said, "We have closely been following every development within the IPL, right from the inaugural year. Today, I am very happy for our consortium of Rendezvous World Sport and the people of Kochi as we finally have a team to call our own in this amazing city-based sports franchise" Wires also reported Tharoor saying, "All I did on my part was to offer encouragement, blessings and expert advise when required to the bidders. Beyond that, I had no role to play. It's a group of business people and I understand it's a business decision," Tharoor said.

"We are absolutely delighted by the overwhelming response to our global Franchise Invitation to Tender process. As you can see the bidding for the two new official Franchises has been fair and transparent and is indicative of the revenue earning potential that the Indian Premier League represents. I am also certain that the IPL fans in Kochi and Pune would be particularly excited with an IPL franchise for their respective cities. Given the high quality of franchises that we have selected, we are certain that both the new franchises will do everything in their power to ensure good competitive teams for next year. All the bids received were of a very high standard and we would like to thank all of the organisations for their participation.” On winning the Pune franchise Abhijit Sarkar of Sahara Adventure Sports said, "The IPL is undoubtedly the most ground breaking international sports development in living memory. There is no precedent for what has been achieved by Lalit Modi and the BCCI over the last three years and the Sahara group is immensely proud to have won the Invitation to Tender from Pune. I can promise the people of Pune – a team they will be proud of in next year’s IPL 2011. I would like to thank Lalit Modi and the BCCI-IPL for running a very transparent process to allocate the Franchises. All of us within Sahara Adventure Sports just cannot wait for IPL 2011 to commence.”

Sporting events are giving DTH events a big push

POWER INTERVIEW

JAWAHAR Goel is an industry veteran who is familiar with the broadcasting terrain like very few people in this country. As the helmsman of market leader Dish TV in the DTH segment which is growing at a fast clip, the combative Goel is now spearheading the company's second phase of frenetic growth. Many believe that the DTH space is a mug’s game in India, given the excessive subsidy support that has to be given by the operators to the business. But as digitization of cable takes place along with the parallel switch over from analog, the advent of new DTH operators will hopefully deepen and widen the market. At the same time, as more and more households get fed up of the service provided by the neighbourhood cable operator, the DTH platform steps into the breach as a viable and organised alternative.Goel is also the president of the Indian Broadcasting Foundation, which takes up various issues relating to the broadcasting industry at various fora. He is an active member on the board of various committees set up by the ministry of information and broadcasting, which takes care of several critical matters relating to the industry. In an extensive conversation with Sandeep Bamzai, he outlines the imperatives before him in the new financial year and the relevance of big ticket sporting events as driver fro his industry segment. Excerpts:The new year 2010-11 is in many ways like manna from the heavens for the broadcast and allied industries given that there is back to back sporting action from now up to the World Cup next February. Empirical evidence seems to suggest that there is a tremendous pick up in the DTH business due to this…Yes, absolutely, we have seen excellent traction this year. In February, the DTH industry added 600,000 subscribers, while earlier in January we logged 750,000 new subs; but it is the ongoing month which has surprised one and all. The DTH industry expects to post its best ever numbers – 1.1 million new subscribers. Actually, non stop domestic international cricket season with India doing well was pretty much the tipping point and this has been taken to the next level of competency by IPL in March. So, sporting events are definitely giving DTH a big push. You must understand that cable quality remains a concern around India and DTH has appeared on the scene as a game changer. There are also issues with MSOs on payment when big sporting events come along. This is a constant and in many ways DTH has broken this monopoly that cable operators and MSOs had on urban agglomerates. It is estimated that bickering over tariffs results in a one per cent per day loss to MSOs.Where does the DTH industry stand at this point in time, give us a perspective?All told there are 21 million subscribers with Dish which had first mover advantage leading with 7 million subs. Sun is at number two because of its aggressive pricing, but now their numbers are beginning to plateau as they don’t pay the broadcasters well enough. Greater financial transparency has emerged as a consequence of DTH’s entry. As more and more households switch from analog cable to DTH for better viewing pleasure, 2010-11 may well be the defining year. I reckon this is a sunrise sector from here on.

Why do you say that, after all the subsidy burden because of the cap on pricing by TRAI remains the biggest deterrent for growth.My estimate is that the next financial year should see at least 10 to 11 million subscribers being added by the Indian DTH industry. The advent of HD TV due to the Commonwealth Games will also give this business a big leg up. The following year should see an additional 11 to 12 million subs. Once we reach a solid number like 40 million by say December 2011, then we are significant player, rivaling C & S homes and terrestrial homes as a segment. Broadcasters too will be able to amortize their capital expenditure and there will be a double play out of analog and DTH for better declaration of financial numbers. The problem with cable is the lack of financial transparency in terms of accounting practices.It is said that all six operators are me too, nobody offers differentiated content and the must provide clause proves to be a damper…Let me give you a perspective about Dish TV and the industry first. While industry added eight million subs in FY10E, Dish TV will maintain its incremental market share of 22% of net additions and should add 2.5 million subs in FY11E. (Industry analysts reckon that ARPU will be Rs 137 for FY10E and Rs 145 for FY11E). Top 100 towns have 30% of the total subs base of Dish TV and RoI (Rest of India) has 70%. (Analysts also aver that Dish TV is well funded for FY11E capex (Rs 2500 per sub) and from 2QFY11E it will become cash positive thus funding incremental capex needs through internal accruals.) Content cost will be 45% of subscription revenue in FY10E and will come down to 36% of subscription revenue in FY11E. (Further, analysts maintain that Rs 2.83 billion has been returned to Zee, and while current gross debt is Rs 9 billion, net debt in Rs 0. Most importantly, Dish TV is expected to turn PAT positive in FY12E.) Yes, there is a must provide clause for broadcasters. Any DTH operator has to provide it on a non discriminatory basis. I would like to offer an analogy of telecom in this case. All telecom providers provide voice capability, so what is it that acts as a differentiator - branding, pricing and obviously service standards. But increasingly platform is also a differentiator, for how much satellite capacity is available with the operator is going to be crucial. In specific areas where linguistic minorities and new age wagers reside, they want to watch more of their own milieu. So, I will need to give more UP dedicated channels or Marathi dedicated content; times have changed. People's tastes and preferences too. Dish TV is looking to add 3 million new subs in the next financial year and in a six player market, aim for a secular 22 to 25 per cent of all new net additions.Against this backdrop, on 30 March, the broadcasters alliance has a meeting with the I & B minister Ambika Soni minister, what is on the agenda?Well, two important issues are slated for discussion and deliberation - we need to evolve consensus on TAM ratings where industry is required to form a robust rating system. All the stakeholders have to arrive at an agreement. We need to create an industry measurement body in which all the stakeholders - broadcasters, DTH providers, content production houses et al participate. Similarly it is vital to set up a Broadcast Regulatory Authority independent of TRAI which has overarching powers to decide on broadcasting and content related issues. TRAI unfortunately is handling only carriage issues. Obscenity and other content related issues now require an independent regulator who understands the nuances and dynamics of a vibrant broadcast fraternity.

Cricket: New age multiplier

BEHIND THE NEWS

With Mumbai Indians leading the charge, riding on theupturn in the Indian consumer space, it has practically doubled itssponsorship revenues for season 3 of IPL. By adding four new sponsors- New India Assurance, United India Insurance, along with channel P7and Dheeraj Constructions, it has reportedly taken its sponsorshiprevenues to a staggering Rs 50 crore per year. It is now believed tobe the highest earning franchise this year. Earlier Videocon signed athree year deal for Rs 36 crore with MI, believed to be the highestsince Aircel's similar lead branding deal with Chennai Super Kings (Rs45 crore for three years), Nokia's Rs 50 crore lead branding deal withKolkata Knight Riders and Hero Honda's Rs 45 crore deal with DelhiDaredevils. All deals are for three years.
Clearly the days of a downturn ravaged economy are behind us as thecricket bandwagon acts as a new age economic multiplier. Sources closeto developments have revealed to sportzpower that sponsorship revenueswhich were in the vicinity of Rs 24 crore for each franchise in season2 will in all probability be a much healthier Rs 40 to 45 crore thisyear. Reliance owned Mumbai Indians obviously leading the pack.
Slice and dice is the new mantra for the IPL and its franchises asevery opportunity is being monetised aggressively. With ratingsrocking and new avenues of branding opening up, things are looking upfor the IPL economy. When Idea Cellular walked out of its team jerseysponsorship deal with MI, it was seen as a downer, but Videoconreaffirmed MI's status as a pre eminent branding opportunity. But Ideahad obviously dropped MI because of its failure to fire in season 2and hence latched onto champions Deccan Chargers in a multi year deal.This also showed the fickle nature of sponsors who want to beassociated with success.
In another example, private life insurance company HDFC Standard Lifeannounced its second year of association with Rajasthan Royals. Underthe terms of agreement, HDFC Standard Life is the Associate Sponsor ofRajasthan Royals in the third season of the Indian Premier League (IPL2010). This gung ho scenario is in sharp contrast to 2009 when theevent moved to South Africa and the world was in the throes of adepression. Bajaj Allianz for instance had terminated its sponsorshipdeal with Rajasthan Royals, while Religare had pulled out as associatesponsor with DD and realty major HDIL had backed out of its commitmentwith KKR. However, Pernod Richard has inked a deal with MI last yearas official partner for spirits and wines. Coca-Cola had fought aclose battle with PepsiCo to ink a deal for its Sprite brand as KKR’sassociate sponsor and pouring partner last year.
Wrigley India has agreed sponsorship deals with all the eight teams ofthe Indian Premier League (IPL) for its Boomer and Orbitproducts.Terms and agreements vary for each franchise with deallengths ranging from one to five years, Wrigley having signedpartnerships with the Chennai Super Kings and the Delhi Daredevils forthree years

LIST OF SPONSORS:
KOLKATA KNIGHT RIDERS

Nokia, Reebok, Videocon, Sprite, Next, McDowell’s No. 1, TAGHeuer, BMAWealth Creators, ABP, Vivel, Shrachi, Fever 104 FM, Boomer, SABMiller India, Gitanjali Lifestyle, BILT, Genesis India.

ROYAL CHALLENGERS BANGALORE

Royal Challenge, McDowell’s No. 1, Whyte & Mackay, Kingfisher, Reebok,Indigo Nation

KINGS XI PUNJAB

Whirpool, Reebok, Royal Challenge, Orbit, Emirates,Gulf, Mountain Dew,ACC Cement, Aroma, DigiCable,

CHENNAI SUPER KINGS

Aircel, Nivea, Yahoo!, Tiger Balm, Orient PSPO, Reebok, Orbit,UniverCell, Lays, Memory Vita, Fosters, Café Coffee Day, 7 UP, Boomer,The Gateway Hotel, Coromandel, Peter England, BILT, Hello, IndiaCements Ltd., Coromandel King Superior Cement.

DECCAN CHARGERS

Idea, McDowell’s No.1, Puma, Coca-Cola, Boomer, Deccan Chronicle,Odyssey, 92.7 Big FM

MUMBAI INDIANS

Mastercard, Videocon, Dheeraj, P7News, Boomer, Air India, ThomasCook, Kingfisher, MSN, Bookmyshow, Red FM, Royal Stag, New IndiaAssurance, Untied India Insurance, Addidas, Pepsi, Canon.

RAJASTHAN ROYALS

Ultratech, Puma, Boomer, Orbit, HDFC Standard Life, Moov, Kingfisher,TCS, Amity University, Buildtech, Musafir.com, Linc Pens.

DELHI DAREDEVILS

Royal Challenge, Coca-Cola, Fever 104 FM, Adidas, Muthoot Group, CNNIBN, Kingfisher, Panasonic, Idea, Flying Machine, Hero Honda,Kingfisher, Adidas.

Lobbyist ka jalwa

RETROFIT

Curiousity killed the cat

Delhi's seamy underbelly always has a rumour or two doing the rounds.If it is not about politicians, then it is about the vast army offixers who inhabit the corridors of power. For the last month or so,the grapevine has been buzzing with news of the two coming together todefraud the exchequer. Throw in the odd retired bureaucrat andmalleable and ductile media and you have a potent fix or combine,whatever you want to call it. So, what is new, you might ask? Afterall, this is the norm in saadi dilli. But this time, there is onesmall twist. Sections of media are reporting this unholy nexus. It allbegan with a top corridors of power gossipy website www.powerbuzz.inreporting that the, "CBI is currently investigating the role of thecountry’s number one lobbyist in the award of a Unified AccessServices (UAS) telecom license to Unitech in 2007-08. It may berecalled that UAS (Unified Access Services) licenses were floated inearly 2007 by the Ministry of Telecommunication and immediately cameunder a cloud of controversy for alleged financial muddling. The CBItook over the investigation after a criminal case was registered underthe Prevention of Corruption Act. It soughtinformation from the Directorate General of Income Tax about certainmiddlemen and companies that were actively involved in the criminalconspiracy.
"The lobbyist’s phones were placed under surveillance by the FinanceMinistry and Home Ministry for a 180-day period during which someintercepted calls point to the deep nexus between key officials of theTelecom Ministry, some telecom operators and the lobbyist.Some intercepts also indicated that the lobbyist uses media toinfluence Government decision-making. According to sources, thelobbyist set up a lobbying company a year ago with three senior“pen-drive” bureaucrats of the Telecom Ministry, and whose recentactivities in Africa too are under investigation by intelligenceagencies. The intercepted phone calls reveal conversations relating toinfluencing the appointment of ministers and officials. Preliminaryinvestigations hint that the same group had a role in the award oftelecom licenses. The Cabinet Secretariat is believed to be personallymonitoring the status of these investigations."
One took this nugget of information with a bucket full of salt. Afterall what credibility does a gossipy website have, you could aver? Somewould say it is nothing more than gossipy trash. But on Mondaymorning, Mail Today in its popular Raisina tattle column had this toreport: "A high profile lobbyist, who has accounts, which are the envyof those in the trade, is believed to be facing the ire of the CentralBureau of Investigation. The agency is said to be in possession ofsome tapes of conversation between the lobbyist and several decisionmakers on the telecom ministry's Unified Access Services." Whoa, nowthis was a whole new dimension being added to 'trashy' gossip. It wasbeing given legitimacy because Mail Today would not have written thiswithout some element of due diligence. And mind you, a lot of whatMail Today has reported also appeared on powerbuzz.in and I am certainthat the two are unrelated. The bare bones of the gossip in fact arealmost identical. Which leads you to think that something serious isafoot. Or as Sherlock Holmes would say - the game is afoot!
But, slow down, there is more from Mail Today which went on to write,"UAS licences were floated in 2007 but later came under scrutiny forfinancial muddles." I thought to myself ...wait a minute; didn't theCBI raid the Department of Telecom last October in an unprecedentedmove. I found this story dated October 23 in the Times of Indiaarchives - "In an unprecedented move, the CBI on Thursday raided theoffices of the Department of Telecom (DoT), alleging criminalconspiracy between DoT officials and private firms in the allotment of2G spectrum. TOI was the first to report the unusual twists and turnsin DoT's decision-making process in the matter, and closely followedthe sequence of events from July 2007 -- when the rush for new telecomlicences began -- to January 2008, when spectrum was allocated to thenew entrants -- right up till November 2008, as the controversysnowballed."
But back to Mail Today for a moment - "The conversations reportedlyhave important pointers on how some new telecom holders acquiredlicences. The CBI took over the investigation after a criminal casewas registered under the Prevention of Corruption Act. It is allegedthat surveillance of telephonic conversations during the 180 dayperiod unravelled the nexus between key ministry officials, sometelecom operators and the lobbyist. It seems interested groups arehyperactive in telecom, and the lobbyist is caught in the crossfire."Which begs the question - who is this all powerful lobbyist who canmanage the environment so effectively and efficiently? Delhi's powerpavements abound with lobyists, fixers and powerbrokers and your guessis as good as mine on who this specific individual is?
If you are wondering why I am rewinding and fast forwarding soquickly, then to understand the dynamics of this scam, we need torevisit last October's ToI story for it provides an all encompassingperspective on the DoT raid. Here goes, "CBI officials said a caseunder the Prevention of Corruption Act had been registered againstunidentified DoT officials and "private persons" before the raids werecarried out in the Wireless Planning Cell (WPC) and in the office ofthe Deputy Director General (Access Services) at Sanchar Bhawan.According to the agency, all records pertaining to the allocation ofspectrum to new entrants in January 2008 are being examined toascertain whether or not there was any irregularity in the process. Itis learnt that AK Srivastav, DDG Access Services 1; Ashok Chandra,Wireless Advisor and P K Mittal, DDG Access Services Cell 11, thesenior officers in charge of these divisions, were taken to CBIheadquarters for questioning. The CBI raid started at 10am andfinished at around 6pm.
"The Central Vigilance Commission (CVC) had earlier asked CBI to probealleged irregularities in the award of Unified Excess ServicesLicenses to private companies and the resultant loss of Rs 22,000crore to the government. "As per information received, there wascriminal conspiracy between certain officials of DoT and private firmsin order to award licences to these companies by putting a cap on thenumber of applicants against recommendations of the Telecom RegulatoryAuthority of India (TRAI) and by awarding licences to privatecompanies on first-come-first-serve basis on the rates of 2001 withoutany competitive bidding," said a senior CBI official.
"The CVC had asked CBI to investigate the identities of allbeneficiaries in two companies that had bought stakes in Swan Telecomand Unitech Wireless Services. The two licencees had sold their stakeeven before they rolled out services for which they had been awardedlicences. Unitech and Swan sold their equity to Telenor and Etisalat,respectively, at roughly Rs 9,000 to Rs 10,000 crore each -- or six toeight times the price at which they had received spectrum from thegovernment. Sources said though there was no quantification done onwhat was the loss to the government on this account, a rough estimatebased on what these telecom companies earned by offloading their stakecould be anywhere between Rs 20,000 crore and Rs 22,000 crore.
"However, industry watchers claim that the extent of the loss to theexchequer could be as high as Rs 50,000 crore. They point out that DoTgave away 2G spectrum to 120 licencees at roughly Rs 9,000 crore whenthe market value was probably closer to Rs 60,000 crore. DoT chose tofollow a first-come-first-served (FCFS) process to handpick companiesthough it could easily have chosen a global auction for 2G spectrum,as has now been prescribed for 3G. The refusal to hold auctions whendemand for spectrum far outweighed its supply marked a departure fromthe policy of auctioning 2G spectrum till 2001.
"Telecom minister A Raja had argued that he merely followed TRAI'srecommendations. However, TRAI vehemently denied making any suchrecommendations. Former TRAI chairman N Misra had clarified on manyoccasions, including in a letter to DoT, that his recommendationsshould be read in their totality. He had accused the government ofcherry picking portions of TRAI's recommendations rather thanfollowing them as a whole. All these developments were reported inTOI. The previous DoT secretary, D S Mathur, was asked to sign the newlicences in 2007, but refused to do so till he retired in December2007. Once he was replaced, 120 licences were subsequently awarded inJanuary 2008.
"When criticised by the media and the opposition, Raja said hispredecessors, Dayanadhi Maran and Arun Shourie, had followed the sameFCFS policy. The big difference, however, was that there was no queuefor spectrum during Shourie and Maran's tenure. At the time that Rajachose to give away spectrum to a select 120 companies, there werealready 575 applications waiting and more could have followed. Rajawas also accused of abruptly announcing a cutoff date and favoringonly those companies that had come in on or before September 25, 2007,even though the government had officially asked for applications tillOctober 1, 2007.The manner in which spectrum was allocated to companies within theFCFS norm also came under attack as there was no clarity whetherwinners were being selected based on date of application or date oflicence fee payment."
Curious, no? Wonder which cat died.

(exchange4media)

Pakistan's worst kept public secret

BEHIND THE NEWS

Whiff of matchfixing back in Pak cricket

When the Pakistan Cricket Board cracked down on its topplayers - banning them, putting them on probation and levying fines -it was quite clear that something was not quite right in Panickistan.Many reckoned that these stiff penalties were actually brushingelephants and camels under the carpet. That the whole exercise wasnothing but a massive cover up. On Monday, a parliamentary panelexpectedly dropped a bombshell. By making the stunning disclosure thatsome Pakistani cricketers were involved in match-fixing during therecent tour of Australia and not naming the players involved, thespectre of match fixing has returned to cricket. It is clear that thegame has once again been revisited by the ghosts of the past. The darkdays when Cronjegate rocked world cricket are back.
Sadly the Pakistan cricket establishment has buried its head in sandfor too long. By trying to air brush the latest match fixing scandal,it has not exactly helped its own reputation. Pakistan's tour ofAustralia was littered with bizarre events, none bigger than thefamous Mike Hussey/Peter Siddle engineered great escape in Sydney.Umar Gul and Mohd Asif squabling publicly, Umar Akmal using the threatof a stiff back if his elder brother Kamran Akmal was axed from theside, or top batters refusing to play in a side game in New Zealandwhen greeted by a green top are some of the instances of an unruly andrebellious pakistan side. Or better still Shahid Afridi trying to chewa cricket ball will remain an abiding memory in the minds of Pakistancricket lovers.
Pakistan cricket like its society is feudal. Eleven disparateindividuals have often stepped on to the cricket field as Pakistan. Itwas only during Mushtaq Mohommed's captaincy that these stellarindividuals began to resemble a fighting unit and not a rag, tagbobtail outfit. Imran Khan was however, the man who through the sheerforce of his own persona managed to bring these individuals to heeland turn them into a cricket team. Think of the Pakistan side of thetime - Majid Khan, Sadiq Mohommed, Asif Iqbal, Zaheer Abbas, JavedMiandad, Sarfaraz Nawaz, Wasim Bari, Wasim Raja, Imran Khan - largerthan life cricketers on the county circuit, each a name to reckonwith. Now it was well known that Imran and Miandad never spoke to oneanother just as Wasim Akram and Waqar Younis never did. But despitethese differences of opinion, they played excellent cricket.
This time round, the whiff of match fixing returned when Younis Khandropped a sitter in the Champions Trophy semi final. Then Pakistanlost matches to Sri Lanka, from positions of strength. And then theinfamous Sydney Test match happened where Hussey and Siddle did aHoudini. One the greatest banes of Pakistan cricket has been the factthat just about everyone in the side harbours aspirations to lead theside. At any given point in time, a Pakistan team has at least half adozen skippers floating around. Many a time, all eleven players areseen waving their hands around on the field trying to command theside. Only Mushtaq to some extent and Imran completely commandedrespect from their players.
Sometime in 2004-5, Inzamam ul Haq was made captain of Pakistan.Before him, Moin Khan, Rashid Latif, Aamer Sohail, Saeed Anwar,Rameez Raja, Saleem Malik and Waqar Younis led Pakistan in quicksuccession. Only Imran, Javed Miandad, Inzamam and Wasim Akram havecaptained Pakistan in 25 Tests or more in the last 40 years. Thattells you something about the absence of stability from the Pakistanside. It is a malaise which mirrors the travails that afflict the PCB.Unlike the BCCI which is registered as a charitable organisation andis more or less autonomous brooking no interference from thegovernment. The PCB on the other hand is dominated completely by thefeudal political system that prevails in every walk of life inPakistan. The ruling establishment in Pakistan has used a revolvingdoor policy to keep the PCB under the cosh.
On Monday, a three-member sub-committee of the Senate Committee onsports made the revelation after a meeting with Pakistan Cricket Boardofficials, including its chairman Ejaz Butt, at Gaddafi Stadium. "Thesub-committee was briefed on the tour with documents, and there areverbal, video and solid proofs that one or more players were involvedin match-fixing," said Haroon Akhtar, a member of the sub-committee.Recently PCB Chairman Ejaz Butt had denied about the fixing inAustralia, where Pakistan lost all the matches, after admitting thesame in a press conference. Changing his stand, after it triggered a afurore, Butt had said that he referred to old players and not thecurrent ones.
It is a public 'secret' in Pakistan that the Pak tour to Aussie landreeked from its pores of an odd and familiar garlic like odour. Theodour returned when Pakistan's top daily - News - broke the story thata player was being investigated. That is when the dominos began tofall. And this purge has only begun.

In a long line of How To books, here is another one

REBOOT

How to run an airline into the ground...

Over the years, I have interfaced with many chairman and seniorfunctionaries of Air India and Indian (Indian Airlines) to know thatany merger of the two organisations would pretty much end up in asorry state of chaos. Unfortunately for the merged entity NationalAviation Company of India Ltd (NACIL), things have gone according toscript. The merger has been an unmitigated disaster. It has resultedin nothing being achieved except leaving a trail of unpalatablelosses. Now the Committee on Public Undertakings has called a spade aspade and parallely called the bluff of civil aviation minister PrafulPatel whose grandiose idea has come a complete cropper.
By describing the illfated alliance as a marriage between incompatibleindividuals, the Kishore Chandra Deo headed COPU has called for actionagainst the agencies and individuals responsible for taking such awhimsical decision so that no PSU suffers such losses in future.NACIL's total debt is in the vicinity of Rs 16000 crore, interest costis Rs 6 crore per day, the wage bill is an astronomical Rs 3000 perannum since the employee base is 31000, employee per aircraft are 214against an international norm of 110, cumulative losses Rs 7200 crore,expected loss 8500 crore this year, total number of aircraft are 111 -68 and 43 Boeing and Airbus aircraft including a Dreamliner wereindented for during the good days; now NACIL has decided to delaythese purchases. These numbers offer a snapshot of a company well onthe road to peridition. From a doemstic market share of 41 per cent asrecently as mid 2000, the airline has been run into the ground. Theidentity and brand value of Indian Airlines lies in tatters as NACIL'sdomestic share is down to a shocking 17 per cent. So, if COPU saysthat Jet Airways, Kingfisher and Emirates have benefited due to this'whimsical decision', we better give credence to the comments.
NACIL was formed in May 2007 when the consultants Accenture had statedthat costs would be reduced by as much as Rs 500 crore per year due tothe merger. Forget the net gain in revenue of Rs 500 crore per annum,losses have ramped up in a scary manner. At the same time, Accenturehad talked about operational synergies coming out of the creation offive Strategic Business Units. Guess what in August 2009, when NACILand the civil aviation ministry decided to hold back salaries ofexecutives, the ghosts of the same SBU plan resurfaced. Since thecreation of NACIL, the airline has has seen four CMDS - V Thulasidas,Raghu Menon, Bharat Bhushan briefly and Arvind Jadhav - all IASofficers. This anomaly mirrors the state of National Highway Authorityof India which was similarly moribund under minister T Baalu in UPA 1,it had five chairman in three years. In terms of fleet, route,administrative, HR, operational and cost rationalisation or synergies,nothing has been achieved. At the time of giving a Rs 800 cr equitylifeline to NACIL recently, the Pranab Mukherjee headed GoM was notsatisfied with the execution of the fabled turnaround plan. Though itpromised a Rs 800 crore equity infusion in two six monthly tranches,subsequent infusion of equity is now subject to something concrete interms of execution of the cost saving plan. Since January 31, NACILdoes not even have an official spokesperson.
With its business in decline, the company is in disarray with nosemblance of order likely in the short term. With old guards in AirIndia and Indian stonewalling every attempt at integration, themaelstrom only gets more complicated. COPU has clearly articulatedthat the merger was thrust on the two unwilling entities. The COPUreport comes after a similar slam dunk indictment from theparliamentary standing committee on the merger. It is symptomatic of amalaise and when COPU says that there was no mechanism to ensureaccountability of the entire amalgamation process, it once againthrows into stark relief the need for government to get out ofbusiness. Praful Patel was seen as a reformer in UPA 1, but I wonderhow he will answer these charges levelled by COPU.
Guilty sir, yes very much guilty!

(All numbers have been rounded off.)

Afternoon Despatch & Courier

Boondh boondh se sagar banta hai

NAKED EYE

Modi shows his marketing skill sets in IPL 3

By carefully and effectively slicing the IPL rights pie, Lalit Modihas proved once again that he is a shrewd marketer. As he said theother day, he has managed to double the central revenue pool for thefranchise owners. Though Modi and the IPl are not very forthcoming onthe revenues, doubling is surely good news fro the franchise owners.Season 2 in many ways was a disaster for IPL and the franchise owners,although empirical evidence in the form of research from IIFL showedthat all eight of them had made a profit. While this mystifies me, Iguess one needs to pay some attention to these numbers. For one cannotdisregard them completely. Each franchise owner reportedly received Rs67.5 crore from the central revenue pool last year and this was thebulwark of the earnings for each franchise. Team sponsorships alsobrought in an identical sum of money for each franchise owner – Rs 24crore. Other income varied and included gatereceipts, in-stadia advertising, merchandise sales, and media tie-ups,while other expenses included stadia fees, travel, stay cost and teampromotion.
Originally, the bulwark of the revenues were from thebroadcasting deal with Sony which were directed to a central pool, 40%of which went to IPL itself, 54% to franchisees and 6% as prize money.The money will be distributed in these proportions until 2017, afterwhich the share of IPL will be 50%, franchisees 45% and prize money5%. IPL had earlier inked a deal with Kingfisher Airlines as theofficial umpire partner for the series in a Rs. 106 crore (1.06billion) deal. This deal sees the Kingfisher Airlines brand on allumpires' uniforms and also on the giant screens during third umpiredecisions.
Due to the sudden move to South Africa for season 2, IPL renegotiatedits broadcast deal with Sony. IPL had agreed to subsidize thedifference in operating cost between India and South Africa as itdecided to move to the African nation after the security concernsraised because of its coincidence with India's general elections.India's biggest property developer DLF Group paid $50 million to bethe title sponsor of the tournament for 5 years from 2008 to 2013. Asfar as the renegotiated broadcast deal with Sony was concerned, 20%of these proceeds were go to IPL, 8% as prize money and 72% would bedistributed to the franchisees. The money would be distributed inthese proportions until 2012, after which the IPL would go public andlist its shares. That at least is the grand plan.
But this time round, Modi has carved new slices of the rights pie,milking it for every nickel and dime. Industry sources reckon thatsome of these monetisation deals are extremely lucrative. For instanceColors has reportedly paid $130 million for its 3 year licensing deal,100 per cent of which will be split between the eight franchises. MRFhas forked out Rs 16 crore for the blimp at match venues while Maxxhas entered into a Rs 20 crore per annum deal as the strategic timeout partner and Rs 32 crore with Karbonn Mobiles. There is also alicensing deal with Swiss watch maker Bandelier for the IPL TrophyCollection for an undisclosed sum. Further, Modi has sold thetheatrical rights to UFO Moviez, opening up a spanking new frontier.UFO Moviez expects Rs 20-25 crore revenues in the firstyear. Further in a landmark deal, the entire IPL 2010 season will bebroadcast live on YouTube,following an arrangement between the league and Google, owners of theinternet channel. The deal - under which all 60 games will be shownlive or on a short delay on a dedicated YouTube channel - will applyacross the world, except in the USA, which will have re-broadcastoptions. The agreement gives Google exclusive online rights for IPL content fortwo years, with both parties sharing revenues from sponsorships andadvertising. In fact, these deals were announced with staccatoregularity. ITV announced it had secured the United Kingdom televisionrights for the 2010 Indian Premier League. ITV will televise 59 of the60 IPL matches on its ITV4 free to air channel. This way cricketreturns to ITV after a hiatus of 30 years. No figures are availablefor both the youtube and ITV deals, but they will be worth a lot ofmoney.
That is obvious from the way Google India Pvt. Ltd has announced anarray of advertising partners for live streaming of the IPL matches onYouTube. Leading the line-up are sponsors such as the RoyalChallengers Bangalore, HSBC India, and HP India. The other sponsorstaking up the sponsorship slots include Airtel, Coca-Cola and Samsung.It is believed that the sponsorship deals on YouTube are available forbetween Rs1.5 crore and Rs 4 crore. UFO Moviez, the world’s largestdigital satellite cine network will screen DLF IPL 2010 Cricketmatches live on gigantic screen in cinema theatres across the country.UFO has more than 1,700 digital screens across India and has tied upwith Crown Infotainment who holds the distribution rights for IPL 2010to introduce IPL matches in theatres.
Similarly, mobile phone manufacturer Karbonn Mobiles, a joint venturebetween Delhi-based Jaina Group and Bangalore-based UTL group inked along-term sponsorship contract with the Indian Premier League (IPL).Karbonn Mobiles is IPL's Official Partner Mobile Phone, as also thetitle sponsor of 'IPL Nights', a show that will be aired on MTV, partof the Colors licensing deal. The deal is valued at Rs 32 crore forthe year. In another innovation, IPL is also charging a premium forsponsored blimps at the match venues. Tyre brand MRF Ltd is spendingRs16 crore to sponsor the blimps. IPL has also entered into a Rs 60crore three year agreement with MAXX, a leading mobile and accessoriesmanufacturer. MAXX will act as the Strategic Time Out (STO) partnerand add spice to the final stages of the league as the officialplay-off partner.
Then there are deals with Bangalore-based mobile firm July Systems forthe exclusive rights to the mobile Internet portal M.IPLT20.com, theofficial site for the third Indian Premier League on the mobile. UTVGroup owned Indiagames is the official gaming partner for the IndianPremier League while the Noida based GoBindas Entertainment has landedthe Interactive Voice & Video Response (IVVR) rights specifically forthe United Arab Emirates region. vRock Mobile has bagged the worldwideIVR, SMS, MMS and live score rights. Then there isSigma Ventures & DCI Mobile Studios which will develop an official IPLmobile application for iPhone, Android and other smart phones. The oldadage of boondh boondh se sagar banta hai may hold good here.
What this tells you is that if there is a will, then automtically away will present itself. In manys Modi has found his true calling onlynow. That of a marketer par excellence. IPL is here to stay and peopleare willing to bet big on it. The tournament's return to India,captive audiences and as a corollary high ratings is what advertisersare seeking. I guess Modi would have been inventive last year as well,but his bandwidth in season 2 would have been completely clogged dueto the last minute migration to South Africa. But he seems to havemore than made up for it this year. In fact, he has put in a veritablesprint this time.