IPL 2020: Rescheduling 19 matches will be a challenge, say experts
The 13th edition of the Vivo Indian Premier League 2020 has been postponed till April 15, 2020 by the Board of Control for Cricket in India (BCCI) in light of the ongoing Coronavirus scare all around the world.
In the press statement, Jay Shah, Honorary Secretary, BCCI, said that BCCI is sensitive about all its stakeholders and public health in general, which led to the decision.
According to various media reports, the decision of the BCCI was largely driven because the franchise teams refused to play without their foreign players, who will not be allowed into the country because of the visa restrictions till April 15.
Industry sources said that the announcement has not come as a big shock to the media and advertising fraternity. A head of media buying for a major FMCG brand, who did not wish to be named, commented that the delay would not have a significant impact on brand strategy.
Media industry veteran Anita Nayyar conjectured that there is a possibility of the matches being crunched to 45 days. She pointed out that earlier, too, there used to be 45 matches before the number of teams increased. “So, crunching should not be an issue. However, match distribution will have to be made relevant,” she maintained.
More than the postponement, the overall market downturn will have a greater impact on the media and advertising industry, believes Divya Radhakrishnan, Managing Director of Helios Media.
According to a McKinsey report on the global impact of Coronavirus, global GDP growth is expected to see a 0.3-0.7 per cent percentage point reduction and marketers are already bracing themselves for the impact.
Marketing for the Vivo IPL 2020 is a joint partnership between BCCI and official broadcaster Star Sports, which has been extended for at least two weeks. Additionally, many media planners and experts foresee Coronavirus scare driving eyeballs towards TV. But that doesn’t necessarily mean eyeballs will turn towards the Star Sports network.
Star Sports has to mitigate the impact on its revenue, maintain viewership and excitement for IPL, and keep skittish advertisers from pulling out at the last minute.
“Star Sports gets a chunk of its revenue from 14-16 sponsors, who have already been locked in. It is unlikely that they will back out,” opined Sudharshan R, media expert and value investor. “Due to the Coronavirus epidemic, brands who advertise on spot buys during IPL may back out. Consumer uptick on consumption will be low in pursuits like travel, vacations, eating out, and cinema, and related brands may not be keen to advertise.”
He further said, “FMCG categories who procure manufacturing materials from China may be hit and choose not to advertise during the IPL.”
Dr Sandeep Goyal, Chairman, Mogae Media, agreed that it is a big setback. He added, “The content bit is not much of an issue. Star has a big library and reruns of old content are quite the norm for sports content. But yes, not having IPL going live means that a lot of planning gets stalled. And maybe, even wasted. More so since the IPL will get truncated ... perhaps more double headers than usual and a cramped schedule.”
During the 16-day period that Star Sports reruns their content, monetisation of inventory will be at much lower levels, contends Goyal. Star Sports was planning to concurrently run IPL 2020 on 7 channels. That’s roughly 4.2 hours of inventory that will have to find buyers by March 29 (in 15 days).
On the positive spectrum, if viewership does spike during the Coronavirus scare, IPL will benefit from a bumper viewership, beating past records. IPL viewership has been growing robustly for the past 3 years – from 500 million in 2017 and 805 million in 2018 (TV + Digital) to 900 million in 2019.
Mamatha Morvankar, Chief Investment Officer, OMG India, observed, “While Star Sports may have reached saturation in the cricket friendly regions, broadcasting the sport on their movie channels allows for a lot of first time sampling.”
Whether the serendipity of Coronavirus and broadcast viewership could turn to benefit Star India remains to be seen.
The other stakeholders in the IPL ecosystem will be affected to some degree by the postponement. “Star Sports pays BCCI close to Rs 3,000 crore (Rs 16,000 crore rights for 5 years) per season, out of which 40 per cent is shared with 8 franchises. So, franchises can still make close to Rs 300-325 crore as say against Rs 450 crore. Sunrisers Hyderabad made Rs 450 crore last year,” says Sudharshan R.
“Ticketing sales and in-stadium crowds will take a dive due to Covid-19, but ticket sales can be insured in the case of a natural disaster,” he said, adding, “So, I am sure these teams have covered that area.”
Sudharshan predicts that BCCI might invoke a force majeure clause with franchises, which allows them to disregard their contractual obligations.
According to Anand Bhadkamkar, CEO, Dentsu Aegis Network India, “There will be changes to the current format of the IPL. There are talks that matches might be happening in-stadia, but behind closed doors. However, we will have further clarity on how Coronavirus situation improves over the next few weeks.”
Impact on IPL advertising
When asked how this postponement will disrupt the advertising calendar for the next 16 days, Anand Bhadkamkar, CEO, Dentsu Aegis Network India, told Adgully, “With the IPL 2020 being postponed, everything goes back to the drawing board. All the marketing plans and advertising plans are being re-worked. While the BCCI has said that they intend to launch the tournament by mid-April, we still have to see how everything pans out on corona virus situation.”
He further said, “It is not as if the IPL has been pushed back for some controllable reason. The business of advertisers is affected and even their consumers are affected. The social and health conditions are not permitting things to move forward as planned due to COVID-19.”
Anita Nayyar was of the opinion that the brand equity of IPL will not get majorly impacted as it has held its own effectiveness over the years. She, however, felt that the revenues might get impacted if the delay in the series is not in sync with the marketing calendars/ seasonality for some brands. “The delay will certainly lead to a slower momentum as everything was geared up for it to happen March-end 2020,” she added.
“It all depends on how the IPL gets conducted. If the delay does not hold synergies with brands buying spots, they could wait for the next opportunity other than IPL,” Nayyar said.
Bhadkamkar said that the advertisers were hopeful of seeing the outbreak abating in the next two weeks, with precautions being taken by the Government as also in the society. “Also, hopefully the vaccines may become available. If that happens, then we might see the situation improving. Currently, there is anxiety and chaos globally as this is a serious situation that none of us have encountered in the recent past at this scale across countries.”
Discussions are on with all stakeholders. Whatever, BCCI, broadcasters or the other stakeholders say, the Coronavirus outbreak first has to come under control. All plans made right now have to consider that ‘if’ factor. That’s something advertisers cannot predict or forecast at present as things unfold.
“As of now Star will come back to their marketing, but there will always be an ‘if’ element coming into play with the situation still unfolding,” Bhadkamkar added.
Taking stock of the situation
Bhadkamkar opined that this is a black swan event that needs a unique response from each and every company. “All marketing and business strategies will undergo a change,” he said, adding, “Overall, the economy is getting impacted due to Covid-19 and spends will be affected on account of this.” Speaking further, he said, “The tourism & hospitality industry has been severely impacted and there has been significant reduction in travel and large number of cancellations for the last 2-3 months. International travel has taken a huge hit. Not just in India, but globally the businesses are reviewing their strategies in these times.”
The immediate focus of businesses is to be responsible to their employees, clients, partners and stakeholders. The focus right now is to battle the Coronavirus threat. In India, it is not that widespread, at the moment, and hopefully it should not go beyond what it has and will be curtailed. The Government has started taking precautions and even companies have deployed safety measures.
Experts unanimously agreed that BCCI, Star India and all the stakeholders, along with the Government, have taken a responsible decision. The Government has also discouraged large mass gatherings or public events until March 31. If things continue to deteriorate then BCCI will have to rethink their April 15 postponement.
They also agree that IPL will still conclude on the scheduled date of May 24 and that the extra matches will be rescheduled over the weekends as afternoon games. 19 matches will need to be rescheduled, which might throw the logistics haywire. It’s a wait and watch till BCCI shares a revised timetable.