Money for nothing and checks for free!

"Money for nothing and chicks for free" - crooned Mark Knopfler in 1985, to express his views on the music industry. With a single syllable change, it applies to the Indian Premier League (IPL), the newly conceived 20/20 cricket league set up in a franchise structure like the soccer leagues in Europe or the sports leagues in the US.

While the IPL might turn out to be the most defining development to happen to cricket since the Packer saga in 1978, and might take the salaries of players to be on par with those of soccer stars and NFL superstars, yet, when players like Manoj Tiwary, whom I saw in a recent game in Australia and wondered how he even got selected, and Ishant sharma, who despite being the star of the Australian tour was a virtual unknown a couple of months ago, fetched $675,000 and almost $1 MM respectively, the deal seems to have more holes than a sieve.

True that when business tycoons like Vijay Mallya, Ness Wadia, and Mukesh Ambani are rubbing wallets with Bollywoood stars like Preity Zinta and Shah Rukh Khan, there are bound to be excesses. After all, isn't this the marriage between the two biggest passions of a billion Indians - Cricket and Bollywood?.

Let's take a look behind all the glitter and analyze if there is gold.

First and foremost factor in the success of a venture is the product, in this case 20/20 cricket. There is no doubt that it is exciting and probably the best suited version to really bring people to the stadiums and have fun after a hard day's work. But beyond an exciting and serendipitously successful World Cup, there isn't a proof that the version is worth the millions of $$ in bets that are being placed - huge risk with uncertain return - an investment that would make me look like Ford betting on the Edsel.

Secondly, the HR, in this case cricketers, are an impressive lot - established players and upcoming ones with its share of have-beens; overall some of the best players in the World are on display.

Thirdly, the cost of hiring these cricketers - a mind boggling $633 MM - is where the logic behind all this looks as thin as soup in a college mess. Given that the people and the companies involved in the league are some of the biggest in the country and are proven winners this is definitely not a joke. One look at the salaries and more importantly the $$/hour, which is astronomical, it reveals the lack of common sense. E.g., M.S. Dhoni is expected to earn $1500/hour, which according to The Economic Times was higher than what Mukesh Ambani, ironically one of the team owners, earns. Then there are other operating costs that need to be taken into account like those of marketing, support staff, travel etc., that will ultimately make the figure fatter than the priest at my wedding.

I am a great believer in creating a market before creating a product and more importantly earning a few cents before betting millions. The IPL fails on both counts.

Hopefully the IPL will not suffer the same fate as that of the Indian stock market in April 1992, when blinded bullishness brought about the fall of many a millionaire, and Lalit Modi, the brain behind the IPL, will do better than Harshad Mehta.