Monday, June 2, 2008

Business lessons from Rajasthan Royals

Indian Premier League champions Rajasthan Royals not only made a mockery of their underdog tag, but also showed that money prowess alone cannot ensure success in sports.

The Emerging Media Group, who owns Rajasthan Royals, was the lowest bidder and paid $65 million to become the least expensive franchise in the eight-team IPL. It also bought the least expensive players during the IPL auction but it fetched them handsome dividends.

Mukesh Ambani's Reliance Industries were the most expensive franchise, paying a whopping $111.9 million for the Mumbai Indians while liquor baron Vijay Mallya was the second highest owner coughing up $111.6 million for Bangalore Royal Challengers.

When the Ambanis, Mallyas, and other franchise owners were outbidding one another to grab the world's best cricketers in the mega IPL auction on Februray 18, Emerging Media was silently picking Shane Warne, Yusuf Pathan, Graeme Smith and Munaf Patel. They were mocked and critics wondered whether there was any logic in its team selection.

The Royals' purchases were so low-key in the first auction that they failed to meet the minimum bidding criteria of $3.3 million and got penalised by the IPL management. Emerging Media's argument was it was eyeing only specific players.

The second auction saw Royals empty their purse getting the likes of Shane Watson and Sohail Tanvir and a bunch of young players who went on to become the nucleus of the team. In the end, they turned out to be smart buyers.

The team did not have a designated icon player which saved a lot of money for the franchisee. The Rajasthan Royals' biggest catch was Mohammad Kaif, for $675,000. They cleverly got a shrewd captain-cum-coach in Shane Warne for a mere $450,000.

Shane Watson, the most valuable player of the tournament, came at an astonishingly low $125,000. Tournament's highest wicket-taker Tanvir was bought for just $100,000. Graeme Smith and Yusuf Pathan cost $475,000 each.

Rajasthan Royals also stayed away from the glitz and glamour and focussed on the game.

Every franchise owner scampered to sign up film stars as the team's brand ambassador. Shah Rukh Khan splashed money all around to produce an album, and invite who's who of Bollywood to watch his Kolkata Knight Riders' matches. It was one big party for Knight Riders every night with the war cry of "Korbo, Lorbo, Jitbo", catching the passion of cricket-crazy Kolkatans. Then, he showered gifts on his players and guests after every match.

Mallya had glamarous Katrina Kaif to show up for Royal Challengers while Priety Zinta jumped and clapped like an excited teenager at every match of her franchise Kings XI Punjab.

Gladiator Akshay Kumar was there to pep up the Delhi Daredevils as their brand ambassador. Chennai Super Kings had a star and starlet to promote their glamour quotient, but soon parted ways with the starlet.

Rajasthan Royals had none of it, they went about their business quietly and accomplished their mission with little fuss.