New Delhi: The brand value of the Indian Premier League (IPL) increased 26% in 2017 to over $ 5.3 billion from $ 4.2 billion in 2016 on the back of renewed title sponsorship deals and an expected increase in the price of the tournament’s broadcast and digital media rights, which will soon be up for auction. These findings are part of the latest report published by Duff & Phelps, a New York-based corporate finance advisory firm released on Wednesday in Mumbai.
The report estimates that the renewed television rights for IPL will be sold for $ 1.8 billion for a five-year period and the renewed Internet and Mobile broadcasting rights will be sold for $ 210 million. The Board of Control for Cricket in India (BCCI) reopened the IPL bids on 21 July. Both television and digital media rights of IPL are up for grabs for a five-year period from 2018 to 2022. The last day for buying bid documents is 24 August. The bidding process will close on 28 August and results will be announced the same day.
The Duff & Phelps report titled “IPL: The Decade Edition" ranked Mukesh Ambani led Reliance Industries Ltd (RIL)’s team Mumbai Indians the highest in brand value at $106 million among individual franchisees.
The report attributes the increase in IPL’s valuation to several factors including the expected return that an asset generates, an increase in the value of title sponsorship (Vivo paid Rs2,199 crore for the title rights of the IPL for the next five years), the anticipation that IPL will also get a similar mark-up for the associate sponsorship rights and increase in value of sponsorships at the individual franchisee level, among others. The IPL broadcast rights may further increase the IPL business value if the they are renewed at a higher price.
“Ten years of IPL has provided us with a glimpse of what to expect in the next 25 years. It will be safe to say that for the foreseeable future, the months of April and May will stay demarcated as IPL territory where nothing else sells. Not even Bollywood!" the report stated.
IPL continues to be a cash cow for BCCI said Santosh N, managing director, Duff &Phelps. “It has come a long way since its inception in 2008, steadily expanding its foothold in the global sporting scene," he said.
According to Varun Gupta,managing director, Duff & Phelps India, Leader, South Asia & Japan, IPL 10 grabbed eyeballs for all the right reasons. “It was relatively controversy-free tournament, coupled with some scintillating on-field performances which have brought the spotlight back on the game. On field, Mumbai Indians were by far the best team throughout the season and were deserving winners for a record 3rd time. Rising Pune Supergiant (RPS), who were playing in the IPL for the last time, went out with a bang," he said. IPL 10 was mentioned on Twitter over 6 million times, twice as much as last season.
IPL 10 generated 1.25 billion impressions on television across the five Sony television channels (an increase of 22.5% over last year when 1.02 billion impressions were recorded). Of the 1.25 billion impressions, nearly 45% of the total viewership came from rural India which is further evidence of IPL’s pan-India reach. This increase is aligned with the change in demographics, TV ownership and connection type, to name a few factors, the report stated.
To be sure, Duff & Phelps did not value Gujarat Lions and Rising Pune Supergiant as both teams will no longer be part of IPL.
Even demonetization had no impact on the advertisement revenue earned by IPL from brands and sponsors. A 10-12% growth in advertisement revenues was estimated by Sony Pictures Networks, the league’s broadcaster amounting to approximately Rs1,300 crore as compared to Rs1,200 crore earned in IPL 9, while Hotstar’s ad revenues from IPL rose to Rs120 crore, more than double the previous year.
“I’ve been intrigued to watch how IPL has marketed and protected its own brand value separate to the clubs.With my experience of having worked with some of the biggest clubs in the English Premier League (EPL),I feel the one thing IPL has done really well is the way it has marketed and protected it’s own brand. Most of the EPL clubs are bigger brands than the EPL brand itself, whereas in IPL, it seems to be brand IPL which is much more powerful compared to the individual franchisees," said Trevor Birch, Managing Director, Duff & Phelps and Ex-CEO of Chelsea FC.