MUMBAI: The most valuable franchise in the Indian Premier League is the Reliance-owned Mumbai Indians, with a valuation of $1.3 billion, followed by Chennai Super Kings at $1.15 billion, a Forbes report published Tuesday avers.
As per the report, alongside being evaluated at $1.3bn, the franchise also boasts revenue of $33 million (Rs 254 crore approx) and an operating income of $5.5m (Rs 42.17cr approx.). MI now has a net worth more than six MLB teams, 27 NHL teams and every MLS team.
Valuation of the other IPL teams in order of worth
Kolkata Knight Riders – $1.1bn (Rs 8433cr approx)
Lucknow Super Giants – $1.075bn (Rs 8242cr approx)
Delhi Capitals – $1.035bn (Rs 7935cr approx)
Royal Challengers Bangalore – $1.025bn (Rs 7858cr approx)
Rajasthan Royals – $1 billion (Rs 7667cr approx)
Sunrisers Hyderabad – $970 million (Rs 7437cr approx)
Punjab Kings – {$925 million (Rs 7092cr approx)
Gujarat Titans – $850 million (Rs 6517cr approx)
All well and good, but just how did Forbes arrive at the conclusion that freshly minted Lucknow Super Giants has a valuation of $1.075bn? Seen from this perch, beyond the fact that owner Sanjiv Goenka, chairperson of RP-Sanjiv Goenka Group, “broke the bank” while bidding Rs 7,090 crore to acquire the rights for the team, to give it a higher valuation than Royal Challengers Bangalore (or any of the other “legacy” IPL teams for that matter) is unjustified.
Meanwhile, according to Forbes, the IPL has been a gold mine for investors. In 2009, a year after the franchise-owned cricket league launched, it published its first (and till now only) valuations of the league’s teams, pegging the average value of the eight franchises at $67 million. With the league having recently expanded to ten clubs, that average is now up to $1.04 billion, an annualized growth rate of 24%, as per Forbes.
“The IPL is the most prominent cricket league in the world in terms of attracting sponsors and media rights. A lot of credit goes to founders of the IPL, who took ideas from the NBA and European soccer leagues, and good governance by the BCCI with regards to clear visibility of team funding and ensuring the tournament continued during Covid,” Forbes quotes Ajimon Francis, managing director at brand valuation and strategy consultancy Brand Finance India, as stating.
Two big reasons may be traced to the surge in IPL valuations, firstly the viewing audience pool and secondly IPL’s economic model.
In 2021, 400 million viewers watched the IPL on television while another 260 million streamed matches on online platforms.
Through its economic model, the IPL virtually guarantees that every team is profitable. As per Forbes, in 2021, for example, average revenue for the eight teams was $35 million (Rs 268cr approx), with operating income (earnings before interest, taxes, depreciation and amortisation) of $9m (Rs 69cr approx). Some 80% of the IPL’s revenue in a typical year – and about 90% during the pandemic – is derived from central revenues negotiated by the Board of Control for Cricket in India.
