Image: Robert Cianflone/Getty Images
The brand value of the Indian Premier League (IPL) has increased by 13.5 percent to Rs 47,000 crore ($6.8 billion), up from Rs 41,800 crore ($6.3 billion) last season, according to a report by corporate finance advisory firm Duff & Phelps, released on Thursday. While this is a drop compared to the 19 percent growth registered in 2018, ad spends have increased by 20 percent despite this being the year of the ICC World Cup.
“The league has gradually transitioned from being a startup to being a more mature, stable and professional business model,” says Varun Gupta, managing director, Asia Pacific Leader for Valuation Services, Duff & Phelps, who explains that some of the reasons for this growth are continued support shown by advertisers, sponsors, broadcasters and partners. “An increase of 20 percent in advertising revenues this year, and the recently renewed Paytm title sponsorship deal [which has fetched an increase of 58 percent on a per-match basis over the last deal] are testaments to the continued popularity of the IPL.”
Mukesh Ambani-owned Mumbai Indians, claiming its fourth title this year, has registered the highest valuation of Rs809 crore. This is followed by Chennai Super Kings at Rs732 crore, with the MS Dhoni-led team recovering from the brand value erosion caused by its two-year ban.
Santosh N, managing partner, D and P India Advisory Services LLP, a member of the Duff & Phelps network, says that factors such as team performance, star players, marketing, celebrity influence and social media engagement affect valuation. This explains the 8.3 percent fall in the valuation of the Kolkata Knight Riders (at Rs629 crore), and the eight percent fall of the Royal Challengers Bangalore (at Rs595 crore) since last year, given their sub-par performance on-the-field.
“If not for the personal brand equity of RCB captain Virat Kohli, the team’s brand value would have suffered further,” he adds. “On the other hand, a team like Sunrisers Hyderabad (SRH), which has performed consistently in the short period of its existence, has still not been able to reach the Top 4 positions because it lacks some of the marquee players.” The valuation of SRH, the youngest IPL franchise, has increased 4.6 percent since last year and is pegged at Rs483 crore.
“At least three to four teams have become profitable, while the losses made by the rest is almost immaterial because they are close to break-even,” explains Santosh, who says that the firm does not have access to the financials of each team. “But our understanding is that the share of the central pool of revenues between teams has been decent because of the 2017 [media rights] renewals that happened at a huge premium. This has resulted in most losses getting covered.”
Viewership of the IPL has also shown an encouraging trend, with Hotstar (the digital streaming platform by IPL’s broadcast partner Star India) breaking its own world record twice in this edition. While one of the matches recorded 12.7 million views compared to the previous high of 10.7 million, the IPL finale was watched by 18.6 million concurrent viewers.
Check out our Festive offers upto Rs.1000/- off website prices on subscriptions + Gift card worth Rs 500/- from Eatbetterco.com. Click here to know more.