Chennai Super Kings celebrate after winning the IPL 2021. (Photo | Sportzpics for IPL)
The figures were insane. Who would have thought that two new IPL teams would fetch the Indian cricket board (BCCI) Rs 12,000+ crore? The RPSG Group bought the Lucknow team for Rs 7,090 crore and an international equity brand with a global sporting presence, CVC Capital Partners, secured Ahmedabad for Rs 5,625 crore. Not even the BCCI was expecting so much. Whether the owners would eventually break even or make a profit soon, we don’t know. But this points to the popularity of the IPL.
The crazy bids throw some light on brand IPL—it has grown from Rs 3,000 crore in 2008 for eight teams to Rs 12,000 crore for just two. With 10 teams, the number of matches will increase to 74. This translates into more slots for ads on TV. With the broadcasting and media rights up for bidding next year, it is expected to get bigger commercially. Previously, the rights had been held by Star for some Rs 16,000 crore. Since broadcasters and the BCCI know that the IPL is a TV sport, the amount is expected to be big. Reports suggest the current valuation of the IPL as a brand is around Rs 50,000 crore. And projections expect it to grow bigger. With no relegation and guaranteed annual compensation irrespective of on-field performance, teams feel secure about their place. This makes it an easy investment as the performance is not connected with the earnings. The bidding is also a testimony to the heft of T20 cricket in the IPL era (in 2008 there was a lot of scepticism regarding the format). At the same time, with Lucknow and Ahmedabad coming in, the IPL is expected to make a huge foray into the Hindi heartland.
There are some concerns as well. The new teams may not be able to fetch big players like M S Dhoni (Chennai Super Kings), Virat Kohli (Royal Challengers Bangalore) and Rohit Sharma (Mumbai Indians) as they are likely to be retained. So forming a lucrative team might be difficult. Like a previous owner said, it took them some six-seven years to break even. Hence, how the new teams are hoping to get a return on their investments need to be seen. Yes, teams’ valuation would grow but in the end, will it justify the Rs 7,090 crore?
