CAN AHMEDABAD ADD AN IPL TEAM? WILL IT INCREASE ITS IPL VIEWERSHIP IN AHMEDABAD?

Submitted To: Dr. Sarla Achuthan

Submitted By: Maulik Padh (11368) Varsha Golani (11318)

For The Subject Of: Business Research Methodology

B.K. SCHOOL OF BUSINESS MANAGEMENT

Literature Review:
The Indian Premier League, also known as the "DLF Indian Premier League" for sponsorship reasons, often abbreviated as IPL, is a Twenty20 cricket championship league created by the Board of Control for Cricket in India (BCCI). The event is considered the brain child of the former vice President of the BCCI, Lalit Kumar Modi.

The IPL is very mush in sync with the format of European Premier League of Football or the NBA in USA. The first edition of the game was introduced in the year 2008, and was an instant success.

The IPL was well received by the people of India. In a cricket crazy nation, the advent of IPL was yet another reason to be happy. It was a newer format of the game, less played by the national team but made popular by the Indias win in the first ever T20 World Cup. The stage was all set and IPL arrived with a great pomp and show. IPL converged the two very popular streams of entertainment in India. The Bollywood and The Cricketers. There are the eight franchises that field teams to play in the IPL namely, Chennai Super Kings (CSK), Delhi Daredevils (DD), Kings XI Punjab (KXIP), Kolkata Knight Riders (KKR), Mumbai Indians (MI) Rajasthan Royals (RR), Royal Challengers Bangalore (RCB) and Sunrisers Hyderbad (SRH). Gujarat, a western Indian state is regarded as the "industrial capital" of India because of the big business establishments in the state and the big business tycoons which has resulted from the great business culture that is prevalent in the state. Gujarat also takes pride for being the home of three Ranji teams as well as the location of the oldest cricket stadium of India i.e. Maharaja Sayajirao Stadium, Vadodara. Despite these achievements, this state has never made any serious effort to win an IPL team. There have been efforts in past for the purchase of Ahmedabad franchise. Anil Ambani, chairman of ADAG group and younger brother of industrialist and

Mumbai Indians owner Mukesh Ambani came a close second to the last finisher Jaipur in the first ever auctions of IPL. The Adani group almost won a bid in 2010 only to be cancelled at the last moment without any valid reasons. The bidding process was first held then postponed due to paucity of bidders and objections by the BCCI to the clause that required the bidders to be worth $1 billion. The IPL also removed the earlier clause of an advance deposit of $100 million and revised it to $10 million performance guarantee amount to be submitted 24 hours before the bids were opened. In the next bid that took place, Sahara Adventure Sports Group successfully bid for Pune while Rendezvous Sports World Limited, a little-known consortium of real estate players and businessmen brought together by the then union minister of state for external affairs Shashi Tharoor, bagged Kochi in the IPL 4 auction. Sahara ASG picked Pune for $370 million (Rs 1,702 crore) while Rendezvous SWL forked out $333.3 million (Rs 1,533.32 crore) to win the Kochi franchise. The the then commissioner of IPL Lalit Modi later said that five eligible bids were received in all, which included Rendezvous Sports, Sahara, a group led by Aman Vohra, Adani and VC Digital (part of the Videocon Group). Adani Group had rooted for Ahmedabad at $315 million, while Pune was wooed by VC Digital for $319.90 million and also the group led Aman Vohra for $261.30 million. A highly placed source at the Gujarat Cricket Association (GCA) blamed internal politics for the fall out. "It was internal politics that did us in. We won the bid in the first auction but that was cancelled at the last moment without any valid reasons which upset us. But even then, we wanted to play it fair and square but in the IPL, nothing is being played fairly. There is a lot of politics involved in the whole process and that is very upsetting and disappointing," the source had said. In the year 2012, after terminating Deccan Chargers' contract on Friday night, IPL's governing council decided on Saturday to float tender for a new IPL team and short-listed 10 cities - Ahmedabad, Visakhapatnam, Dharamsala, Indore, Jamshedpur, Nagpur, Cuttack, Kanpur (Greater Noida), Rajkot and Ranchi. The new IPL team could be based out of any of these cities.

Sources said the base price of new team will be Rs 300 crore for five years (Rs 60 crore a year) and will get the same share from the league's central revenue pool, which the original eight teams earn (60%). Sources added that the new team owners will be given the option of picking players from the terminated Chargers team for the next edition. However this time, Kalanithi Maran, the owner of Sun Group came to the rescue of terminated Hyderabad franchise. He also retained all the players from its predecessor Deccan Chargers. Till date, cricket fans in Ahmedabad are keeping their fingers crossed and waiting for their turn to cheer a home team in one day. Viewership Determination In case of determining the viewership we studied several models related to TRP. Viewership pattern: Despite the intense speculation around the event within the industry, IPL still seems to hold charm for the viewer. Viewership is expected to stabilize at lower levels than the peaks of early seasons. Team support: A study by Lintas media group reveals that viewership in a city increases when their home team is playing.

Exploratory Research
Exploratory research of research conducted for a problem that has not been clearly defined. Exploratory research helps determine the best research design, data collection method and selection of subjects. To determine the chances of Ahmedabad having an IPL team in future, following are the issues considered by potential buyers: 1) What are the causes for the perceived brand attrition and devaluation of IPL and can the viewership be revived? 2) How much profit the current franchise owners and sponsors making?

3) Is the franchisee model sustainable and do the teams make sufficient profits or give the franchise owners sufficient publicity? 4) The previous bidders for Ahmedabad franchise are business people who expect a return, either in the form of publicity or revenues. Can their interest in the franchise be retained in future team auctions?

The IPL has achieved a very huge amount of success in justsix seasons. However, as statistics indicate, the game is losing its popularity. Over exposure of cricket, decreasing TV audience, decrease in TV sponsorship fees and reduced ads point to the waning interest. A number of reasons are attributed to thisdecrease and some of them are scandals such as spot match fixing where a number of leading players and franchisee owners were caught, the presence of bookies who try to fix the matches, other scandals involving molestation, infighting among the BCCI management and other scandals. Such incidents are few but they have managed to erode on the credibility of the IPL tournament. Revenue generation is mainly from advertisements and sponsors and these people are interested as long as there is an assured audience for TV so that they get sufficient exposure. With TV viewership reducing and audience interest waning, the revenue model is under pressure. Franchises have not made any profits and operate under loss since they pay franchise fees to the BCCI, pay for players wages and take care of other expenses. The prize money for winning teams is still inadequate to compensate for the losses. With this analysis, IPL event is not sustainable. Important stakeholders such as franchises and advertisers/ sponsors are making losses. With very high costs, the IPL model seems to be non-sustainable. There is a great danger that after a few more seasons, the game will lose its viability and attraction and the event may have to close down or it will have to change its present format of high cost structures. Hence the main challenge in front of the potential Ahmedabad franchise bidders is to revive the waning interest of viewers in IPL.

Following is the detailed explanation of the key challenges the bidders will face while bidding for Ahmedabad: 1) Players Wages and performance : The sums offered in the auction for players for a season's play is high. When a ratio of player cost to the runs scored or the wicket he takes, we get some comparable ratios. The strike rate is the ratio of the runs a players scores to the ball faced. The Most Valuable Player Index helps to judge a player. As an example, Gautam Gambhir, captain of the franchise Kolkata Knight Riders was bought for 24,00,000 USD and he scored 590 runs with a strike rate of 143.6 and his MVPI was 688 and his PVI as the $67.5 Crores INR. By bringing in new advertisers, such as YouTube, MRF, vRock, Colors, Karbonn and others, revenue was increased to 130 Crore INR per team. Obviously, owners that participated in the initial stages stand to make profit. Other deals done through merchandizing but these have not really produced any sizeable profits. The earlier team size was 8 and in 2011 it increased to 10 and in 2012 it was reduced to 9. This means the advertising revenue and earnings are shared with more franchises. For 2013, the number of franchises ad teams playing remains uncertain with Pune Warriors dropping out per run was 3488. On the other hand, Robin Uthappa was purchased for 21, 00,000 USD. He scored 405 runs with a strike rate of 118.1 and his MVPI rating was 453. These are Indian players and their performance needs to be compared with foreign players such as Steven Smith of Australia who scored 362 runs with a strike rate of 135.6, giving a MVPI of 454. The statistics for all the players show skewed results and it appears that players who purchased for a higher price performed badly while players who paid less performed much better. The models and methods of assessing players need to be reconsidered and an examination of Sabermatics, used in pro Baseball player assessment should be examined. 2) Advertisers and sponsors: TV transmission rights and advertisements form the main revenue stream for the matches. Sony TV and the World Sports Group will pay the BCCI, 1 billion USD for a 10-year deal.The Times Internet Limited, a part of the Times Group

Publication has successfully won the global rights for Internet, radio, mobile rights, and TV rights in some territories at a cost of 261.6 Crore INR for four years. 3) Controversies and Image of IPL: The image of IPL was until recently considered as verycompetitive and where the best players could show their worth. However, a number of serious controversies erupted. The 2013 season saw spot match fixing scandals in which players Sreesanth, Ajit Chandila and Ankeet Chavan faced arrest and subsequently banned from cricket for life. A number of bookies, a part time movie actor Mr. Vindoo Dara Singh were arrested, and the total number of arrests went to 39. Worst of all, Mr. Meiyappan Gurunath, owner of Chennai Super Kings franchisee who is also the son-in-law of N. Srinivasan, the BCCI president was also arrested in betting and match fixing scandals.

Considering the above challenges and issues, the following recommendations are made to make the IPL event viable: 1) BCCI should institute an expert body of finance experts and accountants to analyze various cost structures make predictions about revenue generation and then place acap on the franchisee fees and wages paid to players. 2) The intention of this analysis is not to take away the glamour but to keep the game viable and ensure that it continues. 3) It is possible that wages will be reduced drastically and foreign players who are attracted by the high fees may choose to drop out. 4) Once a rational and acceptable fees structure is created then one can design the game formats, number of matches to be played and so on. 5) Another recommendation is to play the game every two years, as this will revive flagging interest.

Research Design: The questionnaire is designed to determine the change in viewership if Ahmedabad adds an IPL team. 1) Name 2) Native place 3) Age 4) Are you interested in cricket? 5) Do follow IPL regularly? 6) Which team you support? 7) Do you switch your support to Ahmedabad if it has a home team in near future? 8) Do you think interest in IPL is increasing? Why or why not? 9) How these recent controversies on IPL impacted you? 10) If Ahmedabad is having an IPL team, do you mind purchasing a ticket and watching it live from stadium?