Year 10, IPL brand value touches ~34,000 crore
The league valuations jump 26%, franchisee valuations by 34% in 2017 over the previous year
Despite the numerous controversies that have marked its tenyear run in the country, the Indian Premier League juggernaut rolls on. In its tenth year, the IPL is an enterprise worth ~34,000 crore ($5.3 billion) and has posted a 26 per cent increase in its overall business from ~27,000 crore ($4.2 billion) last year. The league has seen a three-year CAGR ( compound annual growth rate) of 13.9 per cent according to Duff & Phelps, global valuation and corporate finance advisory.
The overall value of IPL and the brand value of all the franchises have seen a stupendous rise since its inception according to the report. “IPL is a brand that is here to stay,” says Varun Gupta, MD of Duff & Phelps. He points out that one of the unique things about the tournament is that IPL as brand is bigger than the franchises, which is different from the global scenario considering that a club like Manchester United is a much bigger brand than English Premier League (EPL). The brand value of the franchises has seen a 34 per cent growth in the last year as compared to 2016 with Mumbai Indians topping the charts with $106 million followed by Kolkata Knight Riders at $99 million and Royal Challengers Bangalore in the third place at $88 million.
The growth in IPL’s value has been boosted by the VIVO title sponsorship deal at ~2,200 crores. For advertisers what has proven to be of immense interest is the continued rise in viewership; IPL’s cumulative reach in the tenth year is estimated at 400 million unique viewers. Nearly 45 per cent of the IPL viewership comes from rural households, which makes it a lucrative platform for a wide range of brands.
IPL has been doing all the right things to reach out to rural audiences. Fan parks, which until a couple of years ago, were limited to tier-I cities are now being planned in tier-II and tier-III cities too. It is a coveted property and “broadcasting rights that will be renewed later this month will be keenly watched. The renewed deal is anticipated to be significantly higher than the one signed by Sony nine years ago,” Gupta said. Sony’s ad revenues have crossed ~1,300 crore this year, while Hotstar’s ad revenues from IPL rose to ~120 crore, which is more than double the previous year, the report said.
The teams’ brand values are derived from a host of factors: on field performance, size of the support base, governance, social media engagement, celebrity influence and marquee players and marketing strategy. Most teams employ a mix of the above, but marketing is still a long way off from global leagues the report indicates.
The star player concept is the main stay of the IPL teams, but if the star player does not perform then the franchise’s value takes a hit. So, it is important to have a mix of both performance and celebrity power in the team that pushes the brand value of a franchise upwards.