IPL poised to make the big money move

MUMBAI: The June 12 media rights e-auction could prove to be a pivotal moment not just for the Indian Premier League (IPL) but for world sport as well.

If the internal estimates of the Board of Control of Cricket in India (BCCI) are proved to be correct and the collective rights value across categories goes past ₹45,000 crore (approx. $6 billion, 2023-27), the IPL could become the second most valued league in the world.

It would leap past the Premier League and Major League Baseball (MLB) and become second only to America’s National Football League (NFL). This is what is on the cards with the BCCI raising the ante by pegging the collective reserve prize at ₹32,890 crore, double that of the current value. The comparative valuations we are talking about are not in absolute terms as the leading sporting leagues are played across varied durations. The IPL has the shortest playing window and fewest matches (74 matches, 8 weeks) among them. The NFL sees 272 games being played across 18 weeks. The Premier league and Bundesliga have a total of 380 and 304 matches respectively, played for nearly 10 months. 162 MLB matches are played in a seven-month long season.

But purely in terms of media rights value per match, IPL’s value could shoot up from $8.5 million in (2018-22) to $16.21 million. As per Duff and Phelps IPL brand valuation report 2020, NFL tops the list with a per match value of $17.36 million. Since, NFL has cemented its numero uno position, having doubled up its valuation in the latest round of media rights sale, last year. NBA’s estimated future valuations are expected to nearly triple but given the sheer number of matches played in a season, it’s per match cost will go up proportionately.

For IPL, only a decade and a half old, to be on the podium with well-established European football leagues and American sporting leagues is an extraordinary success story.

“Comparisons are not completely representative because the other leagues sustain such high valuations across a much longer duration. But what IPL has clearly done is put cricket and India on the sporting world map in a short span of time,” says N Santosh, Managing Partner D & P Advisory. With India’s demographic advantage and deep liking for cricket, the new media rights deal is expected to fortify BCCI’s financial clout in the larger cricket ecosystem. In cricket, IPL is by far the most valued and highest paying league in the world. IPL’s player salary cap across ten franchises is ₹900 crore annually. English cricket board (ECB)’s Hundred and Cricket Australia’s Big Bash come a distant second and third with an approximate total pay purse of ₹80 and ₹75 crore respectively.

Overseas rights

But the commercial over-dependence on the India market also restrains the IPL from widening its reach to international pockets. As per a Sportingintelligence research report of 2019, Premier league by far leads the way in having a sizable media rights income from its overseas market (45.7% of total). Given football’s global appeal, Spanish La liga (44%) comes next followed by Serie A (27.9%).

Despite the Super Bowl being one of the most watched singlemost sporting events, the NFL’s gains outside the American market are limited (2.7%).

Cricket’s globalisation efforts have been slow but stakeholders see potential for IPL to grow overseas.*