RPSG Group won bid for Lucknow franchise with whopping INR 7090 Cr (USD 950 Mn) in October-21. There are lot of
happenings in last ten days of new year 2022 with Lucknow IPL team. They
selected Gautam Gambhir as team mentor, former Zimbabwe cricketer Andy Flower
as main coach and India cricket Vijay Dahiya as assistant coach. They have also
started their official twitter handle seeking official franchise name from cricket
fans.
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| Courtsey - Lucknow official twitter |
When owner or investor selects a team during sports league auction and bid for the same, there are lot of important things going on to lead that decision. Afterall, there is lot of money at stake. These points for selection are same for all kind of sports with all kinds of leagues in any part of world.
1. Cost-Revenue model
First important point is Cost-Revenue
model for franchise over stipulated time of operations. In simple language, it
is estimating total costs and total revenue for next few years of operations.
Cost is including franchise license fee, team
players and support staff salaries, operational cost including all logistics
arrangements like travel, hotel, sport kits, advertising-marketing fees and
other administration charges.
Revenue is including broadcast rights,
stadium tickets sale, title sponsorship for team, other support sponsorships,
merchandizing, product promotions.
As rightly said by Mr. Sanjiv Goenka in
his interview just after auction results for Lucknow bid that "Firstly,
you invest a few crores for passion, you don't invest hundreds of crores for
passion”. It is not only passion for sports but cost-revenue model and long-term
perspective in mind.
Fantasy sports platform My11Circle has
signed a deal to become official title sponsor of Lucknow team and it is
estimated INR 23 Crore per year deal as per sources. Next step will be finalizing
other support sponsors for the team.
2. Region of team and fanbase
Potential of region or city is important factor
in decision of franchisee selection. If region or city is big, there is big
fanbase. In case of Lucknow, it is part of Uttar Pradesh state of India which
is biggest state by population. So, the fanbase is very high. This region has given
lot of good players to India but they did not get their own IPL team earlier.
So emotional connect is very high with the team.
3. Home Stadium facilities
During the season, team plays half matches
at their home ground and half matches away. Ticket sales and in-stadium advertising
of products are revenue streams for team franchise. So, if stadium infrastructure
is modern with huge capacity, it is beneficial to franchisee. In case of
Lucknow team, their official home stadium will be ‘Bharat Ratna Atal Bihari
Vajpayee Ekana Cricket Stadium’ in Lucknow. It has seating capacity of 50,000.
It is huge stadium.
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| Courtsey - Lucknow stadium facebook |
4. Owner synergy with region or city
Every owner wants synergy or personal
connect between his company or himself with region or city for which he wants
team. It is important for brand recall, co-branding activities with fanbase. It
is also important that fans connect well with franchisee brand.
For RPSG group for Lucknow franchise,
there is lot of synergies between RPSG group and Uttar Pradesh. RPSG group
company Noida Power Company Limited is doing power distribution in Greater Noida region. They have Spencer’s retail
stores in various cities of Uttar Pradesh. This
gives lot of synergy between RPSG group businesses and Uttar Pradesh region.
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