Ipl and India - the Inception of Ipl

The Inception of IPL

The idea of IPL was born in Wimbledon, London in the summer of 2007. Mr. Lalit Modi, then vice president of BCCI, met with Mr. Andrew Wildblood, who was part of a sports management company known as International Management Group (IMG). The sports franchises were extremely successful in United States. The idea was to develop a model similar to sports franchises in US. IMG had already considered feasibility of such business in India. A formal meeting was called in London between BCCI and IMG to discuss the possibility of launching a T20 cricket league based on American model. It was decided that the event will be launched in India during next holiday season. The success of Indian team in ICC World cup T20 helped in captivating the Indian cricketing fans. Their cause was further helped by ICC providing a 2 month window, where no international matches were to be scheduled.

The structure of the game was also decided based on the American format. There would be eight teams [Exhibit 1] in the league each playing two games one at the home stadium and other away. The top 4 teams from the league enter the semi final and the winners of semi finals enter the final. The bidding process for the team started in January, which amassed an amount of USD 723.6 million. The ‘money purse' for each team to spend on players was fixed at USD 5 million. A team can have maximum of 30 players including 10 foreign players of which at most 4 players can be on field. The broadcast rights for the event were sold to Multi Screen Media and World Sport Group for a record sum of USD 1.6 billion. The contract signed was for a 10 year period. (IPL: Birth of cricketainment, 2009)

The revenue sharing between the franchises and the BCCI was again based on the American model. In the first two yeasts the franchises will receive 80% of the television revenues, 70% in the third and fourth years, 60% till the 10th and 50% from 11th year. Also, they receive 60% of the revenues from sponsorship for first 10 years and 50% from 11th year onwards. Another clause stated 20% of the amount to be distributed will be decided on league standing while the remaining 80% will be divided equally.

Despite a short time to plan, a well thought out marketing plan ensured that IPL 2008 was a grand success. The franchises ensured brand loyalties by retaining the cricket players from the local region and well known international players. The first season of IPL was won by Rajasthan royals who were considered to be underdogs. This kept the interest of the viewers high, when the IPL returned for the second season in 2009. Though the event was success, only the Kolkata knight Riders was able to make profits over the two years. The following seasons were also successful with Deccan Chargers winning in 2009, and Chennai Super-Kings winning in 2010 and 2011.

The Brand IPL

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