MUMBAI: The Indian Premier League ecosystem value has dipped by 3.6% to Rs 458 billion (Rs 45,800 crore) post the 2020 season, from Rs 475 billion (Rs 47,500 crore) after the 2019 edition, according to the 2020 edition of Duff & Phelps’ annual IPL Brand Valuation Report, a comprehensive study on brand values in the cricket world’s richest annual event.
The reasons for the decrease in value were largely ascribed to title partner Vivo suspending its sponsorship agreement for 2020, additional costs involved to create a secure bio-bubble environment.
Individual franchisees also witnessed a reduction in their brand values.
The value of the IPL ecosystem has decreased by 3.6% in constant currency terms to Rs 458 billion from Rs 475 billion last year. In dolar terms, the ecosystem value has decreased by 8.7% at $6.19 billion from $6.78 billion last year. The drop in value is largely on account of the COVID-19 pandemic and the subsequent impact it had on the IPL ecosystem’s cashflows.
Interestingly, that impact of revenue loss on account of lack of gate receipts is negligible on the overall IPL valuation. In fact, it has benefited the broadcasters as more people were forced to spend time at home, thus increasing the television viewership for IPL.
Based on the market data, the IPL 2020 edition was a huge success for broadcasters, as IPL broke viewership and ad revenue records.
The standalone franchisee brands have seen their brand values decrease, as the pre COVID-19 sponsorship deals were reduced by 15%-20% before the start of the tournament, predominantly because there were no more “meet and greet” events with players; and there were no free tickets in stadiums.
Certain franchisee brands such as CSK and KKR have seen their brand value erode by approximately 16.5% and 13.7% respectively, compared to last year, for various reasons. CSK’s worst ever on-field performance and the concerns of an ageing roster have negatively impacted the brand credibility, and a correction was inevitable. CSK’s brand value has reduced from Rs 7.32 billion to Rs 6.11 billion. Further, CSK must find a new marquee player to attract sponsors post MS Dhoni’s retirement, to maintain its brand value, otherwise, there might be further value correction.
Similarly, KKR’s consistently poor-on field performance along with lack of a marquee player, has significantly impacted the brand value. The team had last won an IPL title in 2014, and since then, it has been unable to reach the final and has failed to qualify for the playoff for three out of six seasons post the 2014 edition. KKR is one brand that generates significant equity from SRK’s brand. Considering there has been a slight impact on brand SRK as per Duff & Phelps Celebrity Brand Ranking, it has had a trickledown effect on KKR as well.
KKR’s brand value has dropped from Rs 6.29 billion to Rs 5.43 billion.
Delhi Capitals is the only team that experienced a minimal impact on its brand value during this pandemic year. The team’s brand value decreased by 1.0% to Rs 3.70 billion from Rs 3.74 billion, and in relative terms there is a significant gain in values as compared to its peers. Things have changed for Delhi Capitals ever since JSW Group entered the fray. The team’s performance has significantly improved from the lows in 2018 (last on the points table) to highs in 2020, which saw them challenge Mumbai Indians for the title. The team’s combination (mix of marquee players and next-generation superstars), its efficient management and the JSW Group brand have unlocked the value of Delhi Capitals. Even though the brand value has increased in relative terms, Delhi Capitals remains at No.6 on the brand ranking.
The back to back IPL champions, Mumbai Indians, also saw a drop in its brand value. Despite the sponsorship revenues being significantly impacted due to the pandemic,
Mumbai Indian’s brand strength has remained intact. They remain at the top spot in the brand ranking table for the fifth successive year with a brand value of Rs 7.61 billion, down by approximately 5.9% from last year.
Despite the pandemic, a full IPL season, with growing viewership and ad revenues for broadcasters, has indicated how strong the IPL brand has become. With the opening
of the economy and decreasing COVID-19 cases in India, sponsorship deals are expected to be back to pre-COVID-19 levels.
The IPL ecosystem has now entered a more stable phase in terms of value, as the value appreciation is not expected at the rate compared to previous years. However, an increase in the number of teams in 2022 and the renewal of media rights in 2023 would enhance the IPL ecosystem value in the future. The top four teams in the ranking continue to be at an advantage over the other teams even as they perform poorly, purely due to the presence of marquee players, the size of their fan base and the advantage of being in cities with a significantly young population.
Having said that, Delhi Capitals will soon catch up if it holds onto its next-generation superstars and builds on this year’s IPL performance. Next year, the teams will also face a challenge in maintaining their core players and getting the team composition right, when the two new teams get added to the IPL.
The current Duff & Phelps IPL Brand Valuation Report reflects the evolution of the modern cricket business paradigm, with clubs benefitting from the enduring popularity of cricket in India and strong marketing and globalization of the game. However, for growth trajectories to maintain their momentum, all teams need to continue broadening their footprint, forming relationships and generating revenue opportunities in growth markets. Ultimately, much of cricket’s future depends on ensuring the product is of sufficiently high quality to continue attracting viewers, sponsors and broadcasters, the latter of which have become so vital for
the game’s financial health.
Highlights
The IPL ecosystem value decreased by 3.6% to Rs 458 billion in 2020 from Rs 475 billion in 2019.
Mumbai Indians (MI) remained at the top spot in the brand rankings for the fifth consecutive year, with a brand value of Rs 7.61 billion, down by 5.9% from 2019.
Chennai Super Kings (CSK) and Kolkata Knight Riders (KKR) ranked number 2 and 3, respectively. The value of CSK dropped by 16.5% to Rs 6.11 billion and KKR declined by 13.7% to Rs 5.43 billion in 2020.
Delhi Capitals (DC) witnessed the lowest impact, with its value decreasing by only 1%, from Rs 3.74 billion in 2019 to Rs 3.70 billion in 2020.
BCCI’s overall revenue stood at Rs 40 billion as the board cut costs by 35% last year, against the anticipated revenue loss of over Rs 30 billion had the T20 league been cancelled.
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