Storyboard | Unpacking the impact of IPL's new teams on the ecosystem

The addition of two new teams opens the Hindi heartland to the advertisers for local sponsorship as well as national exposure that the league promises. Image: Noah Seelam / AFP

Indian Premier League (IPL) brand value is set to soar to stratospheric heights as the Board of Control for Cricket in India (BCCI) adds two new teams to the popular league, say sports marketing and advertising industry experts who spoke with Storyboard. To be sure, BCCI has snagged upwards of Rs 12,000 crore in franchise fee from private equity firm CVC Capital Partners for an Ahmedabad-based IPL franchise, and Sanjiv Goenka-led RPSG group for the Lucknow franchise.

It might seem an eye-watering figure but industry experts believe that such high value investments is a testament of IPL’s commercial trajectory and faith in the Indian cricket league by big international players such as CVC Capital Partners that have presence in Formula 1 and Rugby.

From making its debut in 2008 with eight teams and BCCI collecting about Rs 3,000-odd crores, to quadruple the cost, crossing the Rs 12,000 crore mark from the two new teams alone in 2021 is no mean feat.

New avenue for advertisers

Rammohan Sundaram, country head and managing partner – integrated media, DDB Mudra Group says the valuation of the brand IPL is reportedly nothing less than Rs 50,000 crore, and with these two teams it might actually be a little higher.

“With more matches being added to IPL with two new teams, viewership numbers now will be unbeatable across all platforms of distribution and brands will benefit more with newer city-centric fanbase,” he says.

Newer brands will feature as team sponsors and brands will have a field day with team associations too, Sundaram tells Storyboard.

“We have seen tremendous benefits for brands associating with IPL teams for some of our clients and that is only going to increase,” he adds.

Disney Star India managed to corner advertising revenue (both television and digital) worth Rs 2,500 crore in a pandemic year last year. The official broadcaster is looking to topple this figure by at least 15 percent.

The addition of two new teams opens the Hindi heartland to the advertisers for local sponsorship as well as national exposure that the league promises.

“The Hindi heartland is the biggest consumer market in India and there has been no IPL team there. It’s a huge opportunity for a brand to associate with the new teams. Not only will advertisers get significant regional presence in the Hindi heartland, they will also get national exposure as it provides high RoI [Return on Investment],” says a senior sports management executive.

Growth for teams and talent

Some may argue that the winning bid of Rs 7,090 crores for 10 years by RPSG Group for the Lucknow team may cost the company a whopping Rs 700 crore a year, an outlandish sum considering it is expected to spend additional Rs 200 to Rs 300 crore on players and marketing.

“…The company is looking at an outlay of Rs 1,000 crore a year. BCCI will pay the team close to Rs 400 crore as central revenue while ticketing/sponsorship money can bring an additional Rs 200 crore. It will still pay Rs 400 crore as a marketing cost,” says the executive quoted above.

However, he is quick to add that the valuation of a new IPL team 15 years down the line would be much higher than the cost price. “The only challenge is team owners need to have significant cash flow for 10 years and then reap huge rewards,” he adds.

With the growth of the league, teams have benefitted as well, with talks of some teams going public with IPOs too. “…and though that hasn’t seen the light of day yet, some of the bigger and popular teams like Mumbai Indians and Chennai Super Kings have valuations upwards of $2 billion,” Sundaram points out.

The team fee is also expected to go up as IPL media rights will soon be up for grabs with Star India’s Rs 16,000 odd crore five-year long contract expiring in 2022.

From a talent perspective as well, two new teams translate into many opportunities for new players to participate, along with talent in the IPL ecosystem, be it operations, event or sports management, says Ritesh Nath, an independent sports consultant.

“It will lead to job creation for people who are looking to work in the IPL ecosystem,” he notes.

If you got it, flaunt it
The IPL has created immense opportunities over the years and it will continue to do so with the two new teams on board. It will translate into a high scale of media money, sponsorships and brand campaigns. Though it will also exasperate marketers’ challenge of standing out in the IPL clutter.

Sharing a succinct view of the opportunity and the challenge from a marketer’s perspective, Suhail Sameer, CEO of BharatPe, tells Storyboard, "It is difficult to get noticed in IPL unless you are spending upwards of Rs 50-60 crore or you have found a way to get on to the main frame while the match is playing. But then it is a vanity event where a brand has an immense opportunity to flaunt.”

The thoughts and opinions shared here are of the author.