Taking cricket into the big league

Many traditional cricket followers are sceptical about the new hit-and-giggle format or Twenty20 cricket and its global impact on the game. If traditional cricket is basically baseball on Valium, as the American actor Robin Williams once said, how would you describe Twenty20 cricket? Yet, the recently formed Indian Premier League as well as the Champions League that both host Twenty20 events are benefiting South African cricket enormously.

The IPL’s brand value is bigger than that of the English Premier League giant Manchester United.

With a TV-following of more than two billion viewers globally, it is set to expand annually.

The Champions League, which will possibly be hosted in South Africa in September, is a financial incentive arguably worth between R30 to R40 million to Cricket South Africa every year.

And if either the Chevrolet Warriors or the bizhub Highveld Lions win the league in September, they could pocket $3 million. The participation fee for each team is worth $500 000.

The former South African commentator Mike Haysman said on the SuperSport website that IPL is now the largest Indian global brand with a very recent independent evaluation set at US$4.5 billion.

In the first season, every single game was worth US$1 million in revenue and in the second season that doubled. This third edition has racked up numbers of US$3 million of revenue, each game confirming a progression of 100% each year.

The projection models are even showing that next year's singular game revenue will jump to US$5.5 million and US$15 million to US$20 million within the sixth or seventh year. That sounds far fetched but such is the financial success so far that few would bet against it, said Haysman.

A true valuation is generally always reflected in any sales of shares and since the two new franchises recently were bought at auction for US$333.33m and US$370m respectively, a market has been educated. It's astonishing to think that the combined cost of buying the two new franchises was greater than the cost of all eight franchises together in 2008.

To put the latest figures in perspective, the new franchise owners, Sahara ($370m), paid about 14% more than the current owners of Liverpool did for that football team in 2007.  (Source: SuperSport website).

So how do the team owners get returns on their financial outlay and how does this become a profitable business venture?

As mentioned above, each game of the IPL represents a significant revenue stream. That revenue is made up of various rewarding components being media rights, central sponsorship, merchandise sales, ticket sales and hospitality. (Source: SuperSport website)

The franchises get 72% of this revenue with an additional 8% distributed among them depending on their standing in the league. They benefit from 80% of the generated finances with the remaining 20% flowing into the BCCI (Indian Cricket Board) coffers.

This year, with 60 matches being played, that represents an average yield of US$18m per team.

Next year, with 94 matches being played and if projections are accurate, it represents a return of US$41m per team.

Each year from the revenue return predictions escalate alarmingly as the value of each game leaps enormously. Remember, the Rajasthan Royals were bought for US$67m in total in 2008, said Haysman on the SuperSport website.

Another factor is the international exposure for each South African player involved in the IPL.

The strike-rate of Jacques Kallis improved enormously since his first exposure to the IPL. He is a different brand of player to the man who prodded and pushed his way through the previous two editions of the competition.

In fact, the official statistician of Cricket South Africa, Andrew Samson, has stated that the strike-rate of Kallis improved from 42.87 (almost 43 runs scored off every 100 deliveries received) in 2007, to more than 50 in 2010.

While Kallis survived international bowling attacks in 2007, he dominated them in 2009/2010. And that is not only the case in the shortened format of the game. He bludgeoned centuries in tests against England off less than 180 balls in Centurion and at Newlands in December and January.

It makes him a decidedly more dangerous batsman and a fierce attacking force.

Other participants in the IPL benefited too, like Mark Boucher, Dale Steyn, AB de Villiers, Rusty Theron, Herschelle Gibbs, Yusuf Abulla, Ryan McLaren and Roelof van der Merwe.

The IPL also has enhanced fielding standards as well as the running between the wickets.

And bowling? With top-batsmen attacking you with railway sleepers, and nowhere to hide from the heat in the kitchen, there is only one way to go. Improve your ability to hit yorker lengths consistently, and use variety to unsettle and bamboozle world-class batsmen.

Many South African cricket fans would bemoan the fact that there is an overdose of IPL cricket, but there are rich benefits.

And Test cricket won’t necessarily suffer, unless it learns the lessons from the commissioner of the IPL, Lalit Modi, who has slashed ticket prices and has emphasised the importance of presenting a world-class product to the fans.

If South Africa continues to prosper in test cricket and play an attractive brand of the game, there is little to worry about. A five-star product, good marketing and fair prizing would see test cricket in this country prosper, not wane.