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Medium Profitability Investment Decision

Cricket Mania

#Sports #Cricket
ProHub Comment

This case tests the candidate's ability to think beyond operational cost-cutting and recognize that investing in revenue drivers (star players) can improve both direct earnings (prize money) and indirect revenues (sponsorships, tickets, merchandise) through brand value enhancement. The financial quantification in Exhibit-3 demonstrates the ROI calculation required to justify capital investments in sports franchises.

Estimated Time 15 minutes
Difficulty Medium
Source IESE
50 / 100
PCC is one of the cricket franchise in worlds largest cricket league, LPI. Despite having one of the strongest teams in league, PCC has continuously disappointed its fans and owners and has failed to live up to its true potential. Mr. Gandhi, has recently replaced Mr. Modi as the new CEO of PCC. Mr. Gandhi has been handed the task of turning around the fortunes or PCC. Mr. Gandhi has been an ardent cricket fan and player of the sport all his life. He also has a track record of turning around corporates. Mr. Gandhi has hired you to investigate and recommend on the action plan.

Clarifying Information

  1. Success here would be defined based on improved profitability
  2. The team has been relatively stable with no abnormal changes
  3. The owners are willing to incur Capex to attract up to two star-performers in the auction
  4. PCC lacks brand recall, amongst the lowest in the league
  5. All franchisees in the league are profit making
  6. The overall cricket viewership and popularity has been on the rise (assume pre-covid time)