Brand IPL scored a big hit in 2018 with its valuation soaring 19 per cent over the previous year to touch $6.3 billion compared to $5.3 billion in 2017. According to corporate finance advisory firm Duff & Phelps, which released its IPL Brand Valuation Report 2018 today, the surge in valuation comes on the back of the big spike in broadcasting rights fee.
Other factors include a controversy-free tournament, the presence of marquee players, commentary in regional languages and rise in OTT (over the top) media platforms thereby expanding viewership coverage as well as social media activities and following.
As far as the valuation of individual teams goes, Reliance Industries-owned Mumbai Indians, with a brand value of $113.0 million, topped the charts for the third season in a row. Kolkata Knight Riders are in second place with a brand value of $104.0 million. Despite winning the 2018 IPL title, Chennai Super Kings (CSK) could only place third on the brand valuation chart. The two-year ban imposed on the team had a bearing on its brand values, though CSK’s on-field performance and the Dhoni factor helped them to neutralise the negative impact, and be valued at $98.0 million alongside Royal Challengers Bangalore. CSR activities by various teams also had a role to play in their brand valuations according to the report. As Aakash Chopra, former India opener and cricket commentator notes in the report, “A sentimental association is developed amongst the followers towards a particular franchise when the franchise gives back something to the society.”
Analysing the reasons behind the IPL’s brand values rising so much, Varun Gupta, Managing Director, Duff & Phelps and Asia Pacific Leader for Valuation Services says, “Star India’s broadcasting rights deal was a game changer that put IPL on par with some of the biggest sporting leagues in the world (on a fee per match basis).”
He adds, “The change in content consumption, influx of over-the-top (OTT)and digital viewing platforms and increased support from advertisers, broadcasters and sponsors have given the IPL greater significance in terms of brand value.”
It may be recalled that Star India won the five year global broadcast (TV and digital) rights for IPL with a bid of $2.55 billion (Rs 16,347.5 crore), increasing the broadcast rights fees by a CAGR of 18.9 per cent. The report estimates that Star India earned Rs 2000 crore through TV and digital advertisements in 2018. Previous broadcaster Sony had earned Rs 1300 crore in advertising revenues.
Santosh. N, Managing Director, Duff & Phelpssaid, “Our IPL brand values report reflects the evolution of the modern cricket business paradigm with clubs benefiting from not only the enduring popularity of cricket in India but also from strong marketing and globalization of the game. “
However, he cautioned that for growth trajectories to maintain their momentum, all teams need to continue broadening their footprint, forming relationships and generating revenue opportunities in growth markets.