MUMBAI: Kolkata Knight Riders (KKR) recently announced the launch of a new marketing campaign, "New Dawn. New Knights" At the centre of the campaign was also the unveiling of a new logo created by branding agency Lambie-Nairn. The new design stays with the traditional team colours of purple and gold. The new look has been rolled out across a wide range of applications including the team kit, online, social media application and merchandizing.
KKR CEO & MD, Venky Mysore took some time out to speak to ET about the performance of the franchise so far and the road ahead. Excerpts.
Q. Is KKR profitable?
A.We are waiting for this fiscal to get over, but all the figures show that we will be profitable this year. When I asked IPL, they told me that we are the first franchise to be profitable and that is a good thing for us and a good thing for IPL too, as it shows that this is a model that can be profitable.
Q.Will KKR remain as valuable if SRK were to disassociate from the franchise?
A.SRK plays a huge role in how we are perceived as a brand but clearly our objective and endeavour is to make sure that we can sustain on a stand-alone basis and be profitable. We have a number of revenues streams currently - central revenue from BCCI, broadcasting rights, ticket revenues and sponsorships.
We had a very good year in terms of sponsorships; we not only changed our sponsors but also signed multiple-year contracts with many, which shows the confidence that brands have on us.
Q. What are the new revenue streams you are looking at this year?
A.We are working to create new revenue streams, like merchandising and licensing. Various third party reports show that we are the most valuable brand franchise, so for us to be able to monetize that we are looking at ways to get into licensing agreements. We have signed deals for merchandising and have number of things we are creating like t-shirts, hats, head bands, fridge magnets, pens, ties etc. With this new logo we will be able to do a lot more. We did lot of creative things on the sponsorship side last, our sponsorship revenue went up almost 30% last year and our ticket revenues went up 27%.
Q.KKR has a good brand valuation but how important is it to be good at the sport too?
A.Until year before last we were probably not doing so great, but last year we were one of the best performing teams in IPL & Champions League. Anytime you go in with a sports team, you want to win, but the first thing is to be on Top 4 and we managed to do that. Today we are seen as a strong contender. So yes, on-field performance of the team is very important for the business. Having said that, as business matures if you see across other sports franchise in the world there is not much co-relation between on-field performance and business performance. One could be performing very poorly on-field but could be the most valued, but that is not our objective at all.
Q.What have been your returns from merchandising?
A.At this point the contribution from franchising is very small, but successful franchisees have reached a stage where 1/3rd of their revenue comes from merchandising. This year we will have 3-5% contribution from merchandising. It will be a good start; no one else is anywhere near, so we expect to continue to add on this.
Q. How much of a free-hand do you enjoy as the CEO of KKR? Can you cite examples of major decisions for the franchise made by you?
A. Our promoters have empowered us a lot. To improve our on-field performance is I proposed we should change our whole team and they agreed. So we decided not to retain any player. So before we went to the auction my whole team hired a software firm to develop a software for us, do permutations combinations, decision trees, put value on each players and chalk out the entire strategy. And at the auction table, we were the only team sitting without an owner. Shah Rukh Khan did come to the auction, but he didn't sit at the table, he sat on the side and let us do the auction. It shows the faith he puts in his team.
Q.How much of an impact do you think events like World Series Boxing, World Series Hockey, EPL etc will have an on the viewership & sponsorship money of cricket?
A.I like the events like WSB, WSH very much. Infact I had shared a vision with my owners about creating a bouquet of franchisees. That's partly why we did the rebranding, because we want to create a mother brand and the whole strategy is about then about sports entertainment, rather than just cricket. Cricket is just one property. We looked at lot of acquisitions in hockey, but for some reason or the other we didn't do it. We did a complete business case analysis, gave them a lot of feedback when they brought proposals to us. There are some challenges at the moment, so if everything goes well and they can iron out the problems, we would love to have three...four sport properties.
I don't think the marketing monies will get divided with so many properties coming in. Like every business there is a market segment out there for which we have to produce a product, package it and offer it and that's how I see sports. My idea is to have the same sponsors for all sports that we enter into. So its Brand KKR that they are supporting. They might put in some extra money if we can show them the value. Infact our economics might work better than going and getting new sponsors for every sport.
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