Perks of building the brand in the business of IPL
While IPL teams compete in the middle, a fiercer contest is fought in the background. Teams competing in IPL is a sideshow—the real deal is the battle of brands. In 2008, Mumbai Indians were sold for $111.9 million. In 2022, Lucknow paid almost 10 times more. To some, the brand is mere perception, a hazy concept indicating general goodwill. But in IPL the brand is an encashable asset which sits at the core of the franchise business. Recognising this, IPL sold teams in perpetuity and positioned the league as a valuation game.
Team owners were offered the league as a commercial Test, not an annual balance sheet limitedovers game. Profits were assured but investors knew this was a slow cooking delicacy. The underlying principle: T20 cricket demands explosive batting by a Rishabh Pant; T20 franchise business requires Pujara like patience.
Initially, icon players helped the brand by attracting attention and getting the league rolling. Later, their role diminished and players were no different from passengers on a long distance train who arrive and depart only to be replaced by others. Yuvraj Singh turned out for six IPL teams and Aaron Finch has worn nine different jerseys.
The brand is permanent and once liberated from the grip of celebrity players it develops its distinct identity. Occasionally, star players continue to work for the brand as seen with MS Dhoni and Virat Kohli. To gain the loyalty of fans, brands engage with them on a regular basis through the year. The battle of brands is fought on social media and this game of numbers boils down to likes, impressions, tweets and followers. DC and RCB have been on the front foot, both creating excellent digital content to connect with fans. While on-field performance is key, it is active engagement and a sense of bonding that shapes the brand. This is critical from the business standpoint as longterm commercial results depend on the value of the brand because normal revenue streams (ticket sales/sponsorships) have hit saturation point.
For financial independence, running subsidiary businesses (cricket academies, merchandising and licensing arrangements) is important but these alternate streams only materialise if the brand is strong. That is why teams are now investing in the brand—a change from when it was thought this was an organic process that happens on its own. To create a positive buzz around the brand, teams are supporting charities and paying more attention to social engagement. MI runs an extensive education programme, the Royals are preserving Rajasthan’s rich cultural heritage and are into the sports education business. Kings support schools for young girls and DC has tapped into the growing fitness awareness among the youth by forming cycling and running groups.
But it is KKR who have the clearest vision about the brand and its critical importance. Initially, like others, they relied on players (like Sachin Tendulkar in MI and Dhoni in CSK) and brand ambassadors (Shilpa Shetty with Royals, Akshay Kumar with Delhi Daredevils) and high visibility owners (Vijay Mallya at RCB, Preity Zinta at Kings), and of course Shah Rukh Khan at KKR. At that time SRK and KKR were difficult to separate and brand KKR was smothered by SRK’s overpowering presence. While this was good to get the franchise off the ground, it stunted its growth. Gradually, sensing this danger, SRK receded into the background, leaving cricket and the business of cricket to professionals. His is still a powerful presence, but KKR is a professional unit.
KKR stopped using players and players’ images in their communication and became the first team to travel abroad taking the brand into new areas. When KKR decided to export its brand in 2015, its first stop was the West Indies when they bought the Trinidad team in the Caribbean Premier League. KKR has acquired a stake in the newly launched US Major League Cricket, and also bought a team in the Emirates Cricket League.
This global expansion is good business because of cricket synergies between different teams. Brendon McCullum is head coach in CPL and IPL, and Sunil Narine is with both teams. It is also sound strategy because KKR’s global footprint helps them acquire new fans and keeps the brand alive through the year. Following KKR’s lead, RR bought the Barbados CPL team and Punjab Kings took over the St Lucia Zouks. MI and GMR are part of UAE’s Dubai league.
The strategy of CSK and RCB though remains unchanged— both brands remain chained to the powerful personalites of their star players, MSD and Kohli. While this works till both are active, once they move on, as they must shortly, both teams will have to rebuild.
Top teams are about top players. But top brands are about fans, loyalty, engagement and connect.