Vivo’s exit as title sponsor, creation of secure bio-bubble, loss of gate receipts hurt the event’s brand value
New Delhi: The value of the Indian Premier League (IPL) has fallen 3.6% to ₹45,800 crore after the 2020 season from ₹47,500 crore a year ago, said a report released by Duff & Phelps, a financial consultancy.
This was largely because of three reasons, Vivo pulling out of the title sponsorship deal, costs involved in creating a secure bio-bubble, and the lack of gate receipts.
IPL 2020 was held in empty stadiums in the UAE.
All team franchises witnessed an average reduction in their brand values by 8-9%, largely because of reduced sponsorship revenue, loss of gate receipts, reduced food and beverage revenue, and certain teams’ on-field performances and off-the-field issues.
Chennai Super Kings witnessed the steepest decline of 16.5% followed by Kolkata Knight Riders at 13.7% and Kings XI Punjab at 11.3%. Delhi Capitals suffered minimal impact with its brand value decreasing by 1%. Things have changed for Delhi Capitals ever since JSW Group entered the fray helping improve the team’s performance significantly from the lows of 2018.
The IPL Brand Valuation Report 2020 evaluates the overall ecosystem, which represents the value generated by IPL as a business. It includes the business value of all the franchisees and the IPL governing body, the Board of Control for Cricket in India (BCCI).
In 2020, IPL season 13 attracted lower sponsorship revenues than in previous years. Dream11 paid ₹222 crore for the season, as against Vivo’s cancelled contract of ₹440 crore per season for the title sponsorship. BCCI’s overall revenue stood at ₹4,000 crore as the board cut costs by 35% last year, against the anticipated revenue loss of over ₹3,000 crore had the league been cancelled. BCCI earned around ₹2,200 crore from the 2019 season. The central revenue pool for IPL 2019 stood at around ₹4,400 crore.
The report also noted that IPL 2020 witnessed digital-first companies becoming the season’s theme with fantasy sports platform Dream11, edtech firm Unacademy, and CRED joining IPL as title sponsors and official partners. Apart from that, the two-year-old Mobile Premier League is also sponsoring popular franchises Kolkata Knight Riders and Royal Challengers Bangalore.
Despite the covid-related challenges, IPL continues to have quite a positive impact on its sponsors and partners. Following the announcement of central sponsorships by the BCCI, title sponsor Dream11 secured $225 million in funding, Unacademy joined the unicorn club with funding of $150 million, and CRED secured $80 million, bringing it closer to unicorn status.
“Last year was a litmus test for IPL and the property has come out of it with all guns blazing. The next big trigger for the T20 tournament will be the anticipated addition of two new teams from 2022. It would be interesting to see how BCCI manages to accommodate these teams either by extending the duration of the league or increasing the per day matches which is likely to have an impact on team revenues," said Santosh N., external advisor, Duff & Phelps India Pvt. Ltd.
Meanwhile, Disney+ Hotstar, the official streaming partner of IPL, on Wednesday announced that it has signed 10 sponsors for this year’s tournament. Disney+ Hotstar said that it has signed Dream11 as the co-presenting sponsor, digital stockbroking firm Upstox and Vimal Pan Masala as the ‘co-powered by’ sponsors. Flipkart owned digital wallet Phone Pe, the Association of Mutual Funds in India, Unacademy, epharmacy platform Pharmeasy, Livspace, Swiggy, and Parle Agro have come on board as associate sponsors.