interview S. L. Narayanan, chief financial officer, Sun Group, on the Group winning the franchise for the Hyderabad team, IPL topping the TRP ratings, and more
Subramanian Lakshmi Narayanan is a cricket romantic at heart. His face lights up when he recalls Gundappa Viswanath’s immortal unbeaten 97 countering Andy Roberts’ fury at Chepauk Stadium in Chennai. He was only a schoolboy then, but the memory lingers.
These are days, though, when he needs to balance his love for the game with hard numbers of another kind. As the chief financial officer (CFO) of the Sun Group, Mr. Narayanan will now have his finger on the pulse of the Group’s cricket franchise in the Indian Premier League, the team from Hyderabad.
“It is a wonderful value creation opportunity for us,” he says even as his eyes flick across the room, from one corner to another picking out little things. Then he adds, “For the right price, it is an attractive proposition. Particularly, since we are in the media and entertainment industry.” Indeed, at Rs. 85 crores per year, the franchise was not steeply priced when the Sun Group won it in the auction.
Mr. Narayanan — he is popularly called ‘SL’ among his friends — throws more light on the subject. “For the first five years, we will be paying Rs. 85 crores a year to the BCCI. After those five years, there will be no fixed fee and we will be paying the Board only 20 per cent of the revenue generated during the year.”
He says, “Let me tell you, we have approached the whole thing in a very conservative manner. We have not thrown money around. In the first year, we expect a manageable loss. We should break even in the second year and start making profits from the next.”
Despite holding a potentially strenuous job — he oversees everything from Sun TV, to Kal Publications and Spicejet. And the induction of cricket into his routine appears to have given him ‘more mental and physical horsepower.’
Asked why the Group opted for Hyderabad, he replies, “We were given a lot of other options such as Ahmedabad, Rajkot and Noida. For us Hyderabad was the best suited. We have a fairly strong base there.”
Mr. Narayanan dwells on the Group’s various popular television channels in Andhra Pradesh. And he also speaks about Sun’s FM radio stations in Hyderabad, Warangal, Vizag and other centres. “I think we are ideally placed to promote and popularise the team in the State. The franchise helps us in achieving the perfect synergy between our various interests.”
He is not worried by reports of decline in IPL’s popularity. “A good indicator is how much the title rights for the event fetch you. And Pepsi has bought the rights (for five years) for Rs. 396.8 crores which is nearly double of what was paid for the same earlier. The franchises get a percentage of the central revenue. If this increases, it is great for us.”
Mr. Narayanan points out, “Last season, IPL topped the TRP ratings for 49 out of the 54 days by a distance. On two of the other days, the matches were affected badly by rain and only on three days did a popular Hindi programme rank first. So I feel much of the negative talk about the IPL is hyped up.”
The auction, he says, was conducted in an extremely professional manner. “Everything is so orderly and precise about the BCCI. We were impressed,” he says.
The Sun Group CFO reveals the franchise decided to retain 20 of the 33 players since many of them were world class. “Cricketers such as Dale Steyn, Kumar Sangakkara and J.P. Duminy are exceptional. But we will also induct some fresh blood during the auction in January.”
The promising young cricketers, irrespective of the State they belong to, would be given a chance, he says. “Even if someone is good from Sikkim or Nagaland, they will receive an opportunity. Of course, the local players will also have a chance. The IPL brings different cultures, from different states and countries, together like no other cricket competition does.”
Asked about his favourite IPL players, he replies, “Albie Morkel for his sensational big hitting. Matthew Hayden may not be playing now, but he was a class act. And Lasith Malinga for his toe-crushers.” Mr. Narayanan knows his crick for sure.