The drama over, it is back to business. As the Indian Premier League (IPL) takes refuge in South Africa to play out its second edition, the team owners are readying their new plans to size up their revenues.

GMR Sports, the owner of Delhi Daredevils, is trying to figure out how to make up for the revenue loss from ticketing sales. The spotlight is on sponsorship revenues.

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In an interview with Indiantelevision.com’s Anushree Bhattacharyya, GMR Sports CEO Amrit Mathur talks about the opportunity that South Africa throws up in establishing the Delhi team franchise as a brand in the international arena of cricket.

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Excerpts:

GMR Sports was aiming at a 20 per cent revenue growth from sponsorship and ticketing. Now with IPL being shifted to South Africa, will that be achievable?
No, very unlikely. With ticketing revenues under pressure, it will be difficult to reach the target. Sponsorship will be the only avenue open for us to actually earn. Also, with the tournament moving out of the country, the business model in terms of cost and revenue sharing changes.

How does the revenue pattern shift dramatically?
Till last year, IPL was a tournament organised by the eight franchises. Out of the total 59 matches, 56 matches were run by the franchises while IPL organised the two semi-finals and the final. But for this year, all the matches will be organised by IPL and the BCCI. So unlike last year where each franchise was clear about the cost model, (for example, the franchise knew it was to organise seven matches and could size up the costs of organising them), it is all uncertain now of how much we as franchises have to bear.

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We also don’t know how the revenue will be shared this time. Till last year, we knew that the central pool contributes revenues of about Rs 320 million. Now it is possible that the IPL may add the ticket revenue to the central pool to share it with the franchises. So the revenue from central pool might increase this time. It will, thus, depend on the revenue share model the IPL finally decides upon.

Which are the areas where you feel the costs will increase for the franchises?
Since the franchises have been told that it would be a centrally managed tournament, the IPL is expected to bear all the costs. But the main cost will depend on the financial structure of the facilities being made available – including the ground, the infrastructure, availability of ground for practice, etc. Now IPL will have to discuss these arrangements with the South Africa cricket board and figure out the expenses. As owners of teams, we have an idea of what the games would have cost in India. But we have no idea of what it would be like outside. The cost of travel and the hotels will be relatively minor.

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What if the IPL asks the franchises to bear a certain portion of the costs?
We will go by the consensus approach. We understand that it’s an extraordinary situation. So if there is a cost attached to the tournament, I am sure everybody will sit together and find out a way.

On the sponsorship front, GMR Sports has roped in Coca-Cola, UB, Hero Honda, Religare, adidas and Kingfisher. What has been the progress on the two slots that are still lying vacant?
We are trying to close the last two sponsorship deals as soon as possible. However, the last couple of weeks had been uncertain and there were doubts about the tournament being played. Due to this, we had put on hold our talks with the sponsors. Now that the dates and venue have been announced, we are hoping that the interest for the property will revive.

With the game shifting outside India, are sponsors looking at renegotiating their old deals?
No, not so far. We had signed sponsors for three years and there is further scope for extension. But at the same time, we are supposed to give them certain benefits. We are in constant negotiations with our sponsors and are open for any sort of dialogue.

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With the broadcast partner yet to be finalised, how much of damage will that do to the business?
The audience is not really bothered about who the broadcast partner is. The main concern is whether the tournament is on or out. Now that we all know that it is in, things would start moving again.

Now that the IPL will be played in foreign land, does your marketing strategy go through a complete overhaul?
Well, it will change to a large extent. What we could do in terms of promoting our team in Delhi, we can definitely not carry out those activities outside India. So our marketing plans will change. We will now try to build our fan base even stronger with ticketing being handled by IPL. Moreover, we will promote our team through our media partners which include BigAdda.com, SMS GupShup, Hindustan Times, Times of India and CNN-IBN.

Do you think the IPL will manage to gather enough loyalty in South Africa?
This year it is true that the character of the tournament has changed because it’s no more a domestic league. The nature of loyalty will change. For example, Delhi Daredevils will miss its loyal Delhi fans. The team will play in venues like Durham or Johannesburg which might see an inflow of neutral crowd only interested in cricket as a sport. But then this is only for this year, as the schedule clashed with the Lok Sabha polls.

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What would have been a better decision – no IPL or IPL in South Africa?
The most important thing is to have the IPL running. About hosting it in South Africa, the benefit is that the tournament and teams will get an international exposure. As team owners, we would get an opportunity to build our brand in the international arena of cricket.