Rajasthan Royals recently grabbed media attention for a reported $200 million offer from Kolkata-based Jain Group of Industries to acquire majority stake. The deal failed to fructify and the Indian Premier League (IPL) franchise is busy working out its future growth plans.
Amid controversies over shareholding issues, Rajasthan Royals has furiously pursued its low cost model and is one among the few franchises who have broken even. It has kept its costs under control even as revenue from central pool and team sponsorship has grown year-on-year.
Despite being profitable, the franchise has had its fair share of challenges, the biggest one being the termination of franchise agreement by the BCCI. While the franchise was reinstated into the IPL after winning the legal battle, the arbitration with the BCCI is still on.
In an interview with Indiantelevision.com‘s Ashwin Pinto, Rajasthan Royals CEO Raghu Iyer shares the franchise‘s journey and its plans to become a successful sporting franchise.
Excerpts: |
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Q. Is it true that Rajasthan Royals was offered $200 million for diluting majority stake?Are you now waiting for the BCCI‘s permission before cashing out? |
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Q. Has Rajasthan Royals broken even? |
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Q. Does the arbitration process with the BCCI make it harder to plan long term? |
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Q. Are Lachlan Murdoch and Suresh Chellaram silent investors or are they active in the team‘s functioning and operations? |
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Q. What impact has the IPL had on the business of cricket and sports marketing?
The most important part is that the domestic cricketers have a platform to perform and also an opportunity to earn a very decent living. You can earn between Rs 1-3 million which is a decent amount of money for somebody who five years back would have struggled to make good money. Next comes the broadcaster Max who is very happy and has really raked in the moolah. Sponsors have been happy like DLF.
The franchisees bought into the league and did not think that it would grow so much. The growth has been helped by the investment that each franchisee has put in. The paying public are also happy. One thing that is significant for this year’s IPL is that all the stadiums are pretty much full. Our home matches have been sold out. Barring one odd match here and there, most matches are full. |
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Q. But the ratings this year are showing a downward trend. Is this because the IPL has lost some of its novelty sheen and matured as a property?
I wouldn’t say that the IPL has matured as other leagues have been around for 40-50 years. The IPL is still a baby. The fact of the matter is that with so many ups and downs, it is still delivering ratings and advertisers are coming in for the teams, Max (the official broadcaster) and the BCCI. This shows that the IPL is heading in the right direction. |
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Q. In hindsight was adding two more teams a possible mistake as a longer tournament means increasing the danger of viewer fatigue? |
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Q. Do you feel that it might be a mistake to hold an auction every few years which leads to confusion among fans regarding who is playing in their team?
That is the challenge that is not unique to us. It is present for all teams. Our motto is find a way to win from anywhere. We did this under Shane Warne. This character was shown in the match against the Deccan Chargers when we chased down an almost impossible score. We want fans to remember our brand of cricket rather than this being Shane Warne’s team or Rahul Dravid’s team.
The underdog story was something that people identified with. People thought of us as underdogs. We have built on this story. We have romanticised the story of us winning from nowhere. Over the last four years from research, we realised that fans remember that we have the X factor that is mercurial at times and can surprise the opposition. This is something we want to build on. |
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Q. Is it fair to say that Chennai and Mumbai are at an advantage in terms of fan following because they have managed to retain the nucleus of their sides? |
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Q. Does the IPL Governing Council need a franchise representative? |
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Q. One thing that is plaguing the IPL is the lack of fan engagement activation being done by franchisees during the off season. It is just about two months and then it is forgotten. Why isn‘t more being done
Then in January we tied up with the Jaipur Marathon. Ideally it would be great if we could have Rajasthan Royals B and C teams playing cricket. This would keep the younger boys well oiled. Bit cricketers have commitments. They either play in the Ranji Trophy, Duleep trophy or the national side. It is not an IPL issue; it is a cricket issue. Franchises try to get around this. Delhi Daredevils has a soccer tournament. KingsXI Punjab does a talent hunt. |
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Q. What marketing initiatives have the Rajasthan Royals been doing to boost fan loyalty this season?
In terms of above the line we always look at support from our sponsors. There is an HDFC ad which is about the values that Rajasthan Royals brings to the table. It is about promoting youth, it is about Dravid increasing the challenges to the youth within the team. It is about how the youngsters rise to the challenge. We are a team that promotes youngsters. We have 19 partners, up from 17 last season. Each one activates it in a different manner. TCS is doing a different activation for instance. |
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Q. What was the brief given to FoxyMoron?
We are number four among IPL teams in terms of social media. So for a Mumbaiite if the first most popular team isMumbai Indians, the second is Rajasthan Royals. FoxyMoron’s role is to ensure that content remains fresh. |
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Q. Has this been a challenging season in terms of mopping up revenues due to the economic slowdown? |
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Q. How do you break through the clutter to offer maximum returns to sponsors?
Another important thing is that four local brands have tied up with us which is something that was not there last year. This shows the penetration that the IPL and Rajasthan Royals give. Bikajee is with us as a snack partner and it was a matter of prestige for them to tie up with us. They are doing good stuff in the interiors of Rajasthan which will in turn grow our brand. |
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Q. What is the split in the local revenue streams? |
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Q. What is the split between central and local revenue and by when will local revenue dominate? |
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Q. What are the plans in terms of growing licensing and merchandising?
Teams come out with Jerseys for Rs 800-1000. I don’t think that Indians can afford this. It has to come down to Rs 200. For the next season, we want to tie up with a merchandise partner. Puma has been our merchandise partner and they have been pushing our brand, but the challenge is to penetrate into the interiors of the market to ensure that merchandise is sold.
There are different reasons why franchises have not turned licensing and merchandising into a serious revenue stream so far. In the first year, nobody knew about the IPL and in the second edition, the IPL went to South Africa. This is the first year where franchises have been able to sit down properly and think about how they want to go about things. Licensing and merchandising is a long term play. |
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Q. Have you approached ticketing and hospitality in a different manner this time? |
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Q. After this year, central revenue contracts (like DLF‘s deal) come to an end. How do you see the BCCI faring in terms of stitching together new deals with more value, given that viewership has fallen? |
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Q. Champions Twenty20 League doesn‘t seem to be going anywhere in terms of viewer interest despite getting Bollywood stars to promote it. What is the reason?
Then the local audience will identify with those teams. One team that will get a big fan following is Trinidad and Tobago. They have been coming and doing pretty well. This season will be their third season. If a team comes in three to four times, fan following will go beyond the IPL teams. |
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