Initially, I wanted to comment on the other post about the possibility of Major League Baseball being the next big thing in India. I decided to post on the blog instead, as I would also like to introduce the new developments in Cricket along with the reasons for my argument. My title will probably raise some eyebrows. But, unfortunately it is true, and probably reflects the ground reality. Let me give you reasons why Major League Baseball might not be able to penetrate the Indian market.
The news about the two people picked to play Baseball from India is not even a footnote in Indian news, the reason being, cricket is not a sport. It is a religion over there. I am sure that once you go there, you will realize what I am talking about. Pick any Indian guy here in America or in India, and ask them if there is a possibility of future for Baseball in India? Better still, ask Dr. Jay Singh. You will get the same answer.
The fact of the matter is there is no culture of baseball in India. Two similar sports cannot coexist if one of them is steeped and ingrained into the culture. It is difficult to envision elbowroom for the new sport as it is likely to be considered an imitation of the former, essentially to be a substitute product to the consumer preference. NFL Europa failed, as it was perceived to be a poor substitute for Rugby(Click Here). There is this concept in Microeconomics called the â€˜Marginal Rate of Substitution’, which means a consumer’s willingness to substitute one product for another while maintaining the same level of satisfaction. The question is whether Major League Baseball can overcome the steep marginal rate of substitution? May be, it can market the MLB brand as a complement rather than a substitute. It is a hard sell though considering the similarity of the sports. Think about it this way â€“ how many Americans play cricket here? Simply put, there is no culture of cricket here in America even though it is similar to baseball in some ways. Only, the people from the Indian subcontinent or, expatriates from Australia, England or the Caribbean, play cricket here in US.
MLB could possibly get bigger in India, if and only if cricket shoots itself in its foot (in terms of popularity), and declines precipitously as the consumer preference. There are many indications to the contrary. For instance, a new product of cricket, 20-20 (basically 20 x 6 =120 pitches thrown per inning matches) has caught on with the imagination of the Indian public, and it is played for the same duration as a baseball game (roughly 3 hours). In fact, a new 20-20 league called Indian Premier League (IPL) was created in 2008 on the lines of Soccer’s English Premier League. An auction was conducted for the sale of eight city franchises. While the total base price for the auction was US $400 million, the auction fetched US $723.3 million. Later another auction was conducted to buy cricket players with their base prices ranging from $250,000 to $1.5M. This presented an opportunity for a cricketer to earn $1.5 M for 45 days of cricket in a calendar year(Click Here). Believe it or not, because of this league, cricket made the Forbes’ top ten highest paid sports list (less endorsements) in 2009 (Click Here). In 2009, top ten cricket players earned in the range of $2.5M to $10 million and all of them made the top 50 highest earning athletes (Click Here).
Another factor that will play a role in determining a change in preference of sport is the demographic shift. There are more Indians in US than the number of Americans in India. So, I would argue that cricket will get bigger in the USA than the other way round. Do you guys know that USACA is mulling a cricket match between India and Pakistan in Florida? (Click Here)
I also found an article about projected earnings of IPL players, come 2010 (Click Here). My fellow MBA students, jump onto the 20-20 bandwagon, I dare say. Here is your opportunity to market a revolutionary product. I have more to talk but, it will go on and on. Please let me know your thoughts on the issue. What other factors might tilt the balance in favor of baseball or cricket? If you want to disagree, feel free to disagree.
I have listed some topics that any of the enthusiasts might select for a blog post. Potentially you could use concepts in Managerial Economics like Market Structure & Competition, game theory and strategy to delve into the following issues, and make Dr.Zambrano proud.
1. How IPL took the concept from ICL (Indian Cricket League), leveraged its clout both in the BCCI (Indian Cricket Board) and the administration, and destroyed the ICL?
2. IPL 2009, conducted in South Africa owing to security situation (Can you imagine moving all the MLB games to Japan or any other country, and still have a successful tournament?).
3. Biggest brand name in India (Sachin Tendulkar), and his evolution as the biggest brand
4. IPL’s Revenue generating model