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Kings XI Punjab makes $2.3 mn in profit from IPL 7; franchise targets global audience
MUMBAI: Indian Premier League (IPL) franchise Kings XI Punjab, which was the runner-up in the recently concluded seventh edition of the IPL, has turned a profit of around $2.3 million despite a drop in sponsorship revenues.
Kings XI Punjab COO Fraser Castellino said, “We have so far made $2.3 million on the back of our strong on-the-field performance. The Champions Twenty20 League later this year will add to the bottom line.”
Contributing to the healthy revenue scene was a 25 per cent rise in ticket sales.
“We started performing well from the first match in the UAE. We won all our matches there. People wanted to see us. At Cuttack, we doubled our revenue. The second reason for profit is that our merchandise sales also grew as a result of the on-the-field performance. We had the highest sales of T-shirts on Amazon.com. Our stock sold out. This shows that fans support winners. Our merchandise partner now is Sports and Beyond. When we were in the UAE kiosks were set up. The third reason for being profitable was that we got prize money for being the runner-up. We will get more money for participating in the Champions T20 League.”
However, sponsorship revenue fell by 22 per cent. “Earlier, we had not performed. Non-performance on the field reduces your bargaining power. The mood of the industry was down. The initial part of the event went outside the country. Sponsors took advantage of all these factors as well as the off-the-field issues to negotiate better deals for themselves not just with us but with the other franchises as well.”
Castellino has set himself strong revenue growth targets. “I expect sponsorship revenue growth of at least Rs 10 crore (Rs 100 million) in the next season. All our sponsorship deals were for one year and we will start the negotiation process. The aim is to start finalising deals from October. Our brand of cricket has come through which is reflected in the smile on our captain George Bailey’s face. Our brand of cricket is about the quiet confidence of bettering the opposition. We focus on what we need to do not on what the opposition is doing. If Chennai scores over 200 runs, for instance, we will better that not once but twice. If we bat first, then we focus on scoring enough to be able to contain them.”
In terms of merchandising, he is targeting the global market where there are Punjabis. To this end and to make Kings XI Punjab a global brand, the franchise will do a series of activities in the US, UK and the UAE in July and August. “We will take some cricketers from our franchise to these markets where we have been invited by community leaders. We will do activities like meet-and-greet events, celebrity matches. We were exploring opportunities and some community leaders in these markets decided to take things forward. We expect serious growth in merchandise sales where people abroad pay in dollars for things like T-shirts.”
Costs for the franchise in the seventh season went up by 15 per cent for the two weeks that the event was in the UAE. “The cost factor was not as bad for franchises compared to the South Africa move in 2009.”
At the end of the day, however, for Castellino a franchise’s on-the-field performance is paramount to doing well financially. “Everything else like merchandise sales come after that. That is why the serious aspect of cricket which is the on-field performance has to be separated from the entertainment part of it which is things like team celebrations.”
Castellino has now worked with three franchises. He started his IPL journey with the Rajasthan Royals. He then went to the UB Group and was part of the Royal Challengers Bangalore set-up.
“When I was with a franchise, it always qualified for the Champions League. For me the learning is that franchise owners should rope in professional managers. They should then empower the managers to take business decisions. They should demand accountability from those managers in terms of good performance as well as marketing support. After all, an owner has put in money and would want a good ROI. Eighty per cent of a manager’s and franchises job is the on-the-field performance.”
In terms of marketing, Kings XI Punjab’s approach was to help its sponsors like Tata Motors activate their sponsorships. “The aim was to build brand saliency for both of us. Tata Motors, for instance, is a global brand. They were launching a new product in Qatar. So we took our players and did meet-and-greet events with dealers there. Sponsors also used the time in the UAE to shoot ads. To some extent, marketing costs are borne by sponsors. Our marketing team handholds them. Tata Motors and Britannia each spent over Rs 100 million in activating sponsorships.”
The franchise also used social media during the IPL for marketing. “We created videos on YouTube. We used Google Hangout where fans could chat with the likes of Glenn Maxwell and Virender Sehwag. We have five million likes on Facebook. We have 300,000 fans on our site. We will start membership programmes and outreach programmes. We will also do contests.”