Last December, Stanford shut his cricket office in Antigua and dissolved his self-styled board of legends. And in January signs that the global economic downturn was hitting home came with the announcement of 200 redundancies at Stanford’s Antigua-based investment company.
It is believed that the 20/20 for 20 event, which was unveiled with a garish launch at Lord’s last June but took place amid unflattering headlines and negative reporting in November, will not happen again.
Now the global financial resession has hit the booming Indian cricket industry, it has been reported that ICL is having trouble with distributing paychecks on a timely fashion and has cancelled its world series in March. The main reason cited for cancelling the series is the unavailability of Pakistani Players the series if it takes place will happen later this year after some re-organization is done. Lahore Badshahs will be replaced with an Indian team, the move will seriously affect the revenue stream as Lahore Badshah’s were a huge hit and were the main attraction of the tournament.
Himanshu Mody, the business head of the ICL, said the non-availability of Pakistan players – Lahore Badshahs are the ICL’s biggest draw – was the other major reason for the cancellation of the March tournament, which will be replaced by one involving Indian players. The October edition of the World Series is on schedule as of now.
“Several other initiatives have also been lined up, including a talent-spotting programme in schools across India,” Mody told Cricinfo.
Significantly, the ICL is undertaking a major review of its existing contracts and it is understood that the performances of 18 out of 85 Indian players and 15-16 from a pool of 70 foreign players are under the scanner. Players who fail to perform will either be released or asked to sign up again for a lesser fee.
Three prominent Indian players, two from Australia, and one from Pakistan have confirmed to Cricinfo that their payments have been delayed and said no timeframe has been specified so far. While the players claimed that payments for 2-3 months are to be paid, ICL officials said that dues up to December have been cleared.
The ICL pays its Indian players every month and foreign recruits in quarterly installments and Jason Gillespie, one of the ICL’s foreign recruits, told Cricinfo that “the ICL management told us that they were sorting through their finances.”
“The global credit crisis is affecting everyone, not just sporting organisations,” Gillespie said. “I’m not too concerned. I’m confident everyone will be paid. These are just difficult economic times. Everyone is struggling.” Mody said the ICL is “looking into the issue and grievances, if any, will be resolved”.
Asked about the World Series, Mody admitted that that global economic downturn has come as a dampener. Apparently, “ad spends” have dipped so low that a leading TV advertiser who had spent up to Rs 15 crore last year on advertisements has a budget of Rs 50 lakh this year. “The economics of our model is event-based,” Mody said. “This means that if we hold the event, we would be affected by the current
climate. But we are fine as of now.”
It seems that the global financial crisis and economic recession has finally affected the Indian economy also, if the advertisement industry is going through a slump it might signal trouble for IPL in the upcoming season, although IPL is based on a more sound business model where most of the revenue stream is guaranteed for the next 10 years, but with many franchises struggling to break even in the last season a drop in advertisement revenue, merchandise sales and gate money due to the ecoomic recession might cause trouble especially when the franchises made additional expenditures on aquiring new talent this year, several franchises might face serious cash flow problem this year.
I think ICC and its boards created a vertical monopoly as they controlled the supply of the players, ICL had no choice but to confront and in their effort to get a share of this market they got exploited by players like Yousaf.
But what didn’t made sense to me was the fact that ZEE had its own channel to market their product and in this respect they were better placed than IPL, their first and second season on the surface looked like a huge success at least from the game and its entertainment value point of view, why there were not enough sponsors for their product is beyond comprehension.
Of course IPL had a better business model with multiple revenue streams and the beauty of their business model is that most of the revenue especially from the media rights is guaranteed for the next 10 years. They managed risk better than ICL or Stanford.
I was wondering since Subhash Chandra is not seeing any light at the end of the tunnel so he decided to make his venture into a hit and run scheme, he knows that his main attraction Lahore Badshahs are not going to play for an indefinite period of time and knowing this weakness BCCI and ICC along with its member boards will try to exploit this weakness and probably will not be wiling to extend any concessions to his organization so he has decided to wrap up.
I can’t imagine that Subhash he could have done it any differently as ICC and its member boards would have maintained their current stance under any scenario, I think he should have pursued the legal battle a bit more aggressively that’s where he faltered as that was the only life line available to him.
But its good to know that Indian economy has not been hit by the global recession as such and the revenue stream for IPL will not get affected. I look forward to an exciting IPL season better and bigger than last year.
In India, eventually, rival business propositions end up prospering despite their wars, if they have a good product. From politics downwards, that’s the way it goes…there will always be enough takers to sustain.
A smart ICL, I think, should give up immediate urgency to match IPL or try and pick a fight with BCCI or recognition etc with ICC. It should concentrate on the job it is doing, which is taking high voltage game to centres which do not get international cricket too often. Now that is a market vehicles, many advertisers would love to support and ride into the hinterland on the back of.
However, ICL has made the fundamental mistake of trying to run before it could walk…without depth, it wants to be measured against cricket boards like ECB, CA, PCB, BCCI, WICB, NZ, CSA, SLCB…boards which have vertical depth and horizontal spread in this game. Whatever their shortcomings, they have nurtured their product. ICL wants that without going through the process of nurturing their product.
Now, if I am an adman, and I have two clients profiles – 1) brands targetting hinterland for spread and depth and 2) brands with immediate needs, I would suggest different vehicles for both. ICl works well for the first whereas regular cricket works well for the second. However, ICL wants to be the second vehicle! And when I already have an established one…I’d tell ICL, you overreach yourself, too much, too fast, too greedy, too meaningless.
A smart ICL would have spent a few years growing strong in all respects, without controversies, developing a loyal clientale, in the vast periphery of the glam biz center, and then worked its way closer.
Perhaps its hand is forced by England and Pakistan players from this original plan…England media and ECB played petty politics and used the ICL players as pawns in a larger game of theirs…now maybe players like MoYo are using everybody and the circumstances as a pawn for their own interest.
ICL masters, I must say, turned out to be less smarter than I gave them credit for.
I don’t know, but all this has made many, I can only speak for the circle I inhabit, of us lose interest in ICL. It is now seen more as a mongerer rather than a serious entity who wants to do something more than cosmetic without a hidden agenda. I’ll support the established cricket…
ICL had appropriated so many worthy points which needed to be brought out, but sadly, is now doing injustice to them. If BCCI and ICC hadn’t responded through an IPL, then I wouldn’t have blamed ICL for carrying on as an antagonist…now it has no leg to stand on. Let it create a parallell structure worthy of recognition first….we don’t want a Zimbabwe cricket union like structure replacing the Indian cricket structure.
ICL lost its way trying to vie for big timeness before it was ready. I have not much time for it now unless it sets up a system from the grassroots stronger than BCCI …let them then get all the credit, recognition and money. Wasn’t that the ICL USP? Or are memories so short?
Any eediyut can organize a few cricket matches if he is given this that and that. A new entity must prove its worth first before replacing the older one.
Isn’t Google doing it that way to Microsoft? Or did they first ask the markets to recognize it as the official top dog or some such thing? And you and me to invest in it? It first quietly built up strength…showed it had a better model…then it began to take on at a higher level what it had developed at the grassroots. The glamour is now with Google, not Microsoft…ICL should have been smarter and in such matters, foolishness must pay heavily, isn’t it?
Thanks SB,
Hehe, I am going to retain this one only until I find something better but the job is only half done I am going to make some changes in this one.
I don’t know about Stanford as it didn’t had a sound business model but ICL was doing fine and I really enjoyed most of the matches, on surface it looked as if they were doing great as the stadiums were always full, What do you think the problem is?
And if the advertisement industry in India is facing a recession then do you think it will affect IPL? I hope not because both leagues are a lot of fun and they should thrive.
First off, Great new look Wasim! I hope you retain this.
Yep…things are shaky in both camps.