The serious business of cricket
(Views are personal)
In 2001 I first met Abdul Rahman Bukhatir in Sharjah. He was the man behind the One Day International (ODI) cricket games. His business model hinged on a combination of geo-politics, the growing power of the electronic media and the sub-continental craze for cricket. What piqued my curiosity most: why the business had sprouted in Sharjah.
Sharjah is one of the smaller members of the United Arab Emirates. It is not as daring as Dubai nor as rich as Abu Dhabi.There are no watering holes as in Bahrain The denizens of Sharjah do not even play cricket .Why on earth did multitudes of people come to watch the game of cricket in the middle of a hot desert? Defying all logic ODIs were wildly successful. They changed cricket forever. Between 1984 and 2003, more than 200 ODI matches were played between India, Pakistan and Sri Lanka. The national teams could not play against each other in their home countries. Sharjah was the safe, neutral ground. The Sharjah Cricket Stadium known as the "Oasis of Cricket" even entered the Guinness Book of World Records for hosting a record number of ODI matches.
UAE always had a large population from South Asia. They flocked to the stadium which expanded its capacity to 27,000.Compared to the Eden Gardens or the Wankhede it is small . But as Mr.Bukhatir patiently explained to me--- stadium capacity in this business is a red herring.“There may come a time when instead of collecting gate money, I may have to pay people to come and fill the stadium. They hire extras in Bollywood movies –don’t they? The real money is in advertising, television rights, franchises, sponsorships and merchandizing,” he told me.
Kerry Packer understood this money game before Bukhatir. But what was different in Sharjah? First, the ODIs were commercially sponsored. Second, the cricketers from the sub-continent thought they played for a good cause while they had a great time. The tournaments were called the "The Cricketers’ Benefit Fund Series (CBFS)". The professed objective was to honour cricketers of the past and present generations from India and Pakistan, with benefit purses in recognition of their services to the game of cricket. Third, the target audience consisted of cash- rich but time-poor people. Therefore, the matches were played in a limited over format with floodlights. Some folks from the Indian sub-continent watched the cricket matches in Sharjah. But the vast majority watched them from the comfort of their homes in India, Pakistan, Sri Lanka and Bangladesh. Lastly,in the business of cricket, the core market is the sub-continent not Australia.
Why did the Sharjah cricket carnivals ride into the sunset? In my view, the decision of the Government of India to ban its national team from playing (because of match-fixing allegations) cooked the goose of the business model.You cannot have Hamlet without the Prince of Denmark. In the ODI format only national teams played each other. No ODI tournament was commercially viable without India.
Post-Sharjah, the game of cricket continued to evolve. Enter IPL. IPL is doing to cricket what the English Premier League (EPL) did to football. In IPL, team brands were created with loose regional tags such as the Mumbai Indians, Kolkata Knight Riders and Chennai Super Kings. But these tags really meant very little. The teams attracted stars from all over India and the cricket-playing world.
None of the ingredients of the IPL model was new or invented. But in its final concoction, the cocktail was brand new, heady and strangely Indian. Businessmen, politicians, Bollywood stars and cricket aficionados mingled to create the hype and excitement. The US concept of cheerleaders originated was imported into IPL. Auctioning of players existed in football but was adopted by IPL. Studding teams with stars was not novel either. Real Madrid first asserted star power. It demonstrated that the ability to hire super-stars drives the value of the club higher and faster than the number of times it wins a match.
This “Galaxy of Stars” strategy is heavily reliant on Galaticos-a Spanish term commonly used to describe expensive, world-famous, superstar football players. Galaticos may or may not score goals but their fame and star appeal clearly drive the commercial and financial success of the club.Harvard Business School has a published case study on Real Madrid's business model. You can buy it on their site.
Overall IPL is a commercial success. Are there problems with IPL? Yes, indeed. No one in his or her right senses will condone match-fixing. It must be stopped.But let us remember that match-fixing is neither new nor peculiarly Indian. Betting on outcomes of games is not an Indian invention either. The famous betting company Ladbrokes (www.ladbrokes.com) which is organized out of Gibraltar already allows betting on a range of games including test cricket and is very popular in the UK. Perhaps open betting on IPL matches should be made legal in India. It will drive out some undercover crooks and earn revenues for the government in taxes.
Surrounding the IPL many salacious and headline-grabbing stories have emerged. They have created little typhoons in tea cups of argumentative Indians.But none of them has created a dent either in IPL’s overall commercial success or its money-making ability. 160 million cricket addicts watched the matches on TV. God knows how many more watched it via internet platforms. 2 million tickets were sold fetching $36 million. The combined brand valuation of the clubs is now in excess of $4 billion according to a study by Brand Finance India. If the valuation is correct then it is not a bad show. The EPL (English Premier League) is valued at about $12billion after so many years.
Big changes are continuing to impact cricket.When I was a child I used to listen to the cricket commentary of the Maharajkumar of Vizianagram a.k.a. Vizzie. There are many anecdotes of how he made money talk in cricket. Remembered more for his rambling commentary than his runs on the board, he used to say nostalgically, “In my time, cricket was entertaining.” Taking a cue from him, I will probably tell my grandchildren “In our times, cricket became entertainment. And it became a serious business of making big money.” And why not?