Tag: Mumbai Indians

IPL‘s brand value grows 19% to $6.3 billion

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

Listen to the Article (6 Minutes)

The brand value of the Indian Premier League (IPL) grew 19 percent from $5.3 billion in 2017 to $6.3 billion in 2018, states the latest edition of the Duff & Phelps IPL Brand Valuation Report. This marks the third consecutive year the sporting brand has seen its value grow in double digits.

The surge in IPL’s brand value, which concluded its 11th season in May, is mainly attributable to Star India being awarded the global broadcasting and digital rights until 2022 for $2.55 billion or Rs. 16,347 crore, adds the report.

The deal, which took place in September 2017 is the largest ever television deal till date. Sony Pictures Networks was the previous broadcaster of the IPL.
The report says the IPL broadcasting rights have seen a rising trend since its inception in 2008. On an annual fee basis, the increase in compounded annual growth rate was 18.9 percent.

The last two editions of the IPL have also been controversy free, adding to its sheen.

Among the franchises, Reliance industries-owned Mumbai Indians (MI) with a brand value of $113 million continued to top the charts for the third time in a row, followed by Kolkata Knight Riders (KKR) at $104 million.

Chennai Super Kings (CSK), which returned to the tournament in 2018 after serving a two-year ban over allegations of spot fixing and illegal betting, saw its brand value eroding to some extent. Valued at $98 million, CSK shared the third spot with Royal Challengers Bangalore (RCB).

IPL 2018 benefitted greatly from Star India coming on-board as its broadcast partner. As a result, IPL 11 saw its highest-ever inaugural week television viewership at nearly 300 million, with a 30 percent increase in South India, says the report quoting data by BARC.

“The fact is that Star is not just a sports channel, but a General Entertainment Channel. Star was able to take the sport to tier-2 and tier-3 cities. With India being a diverse country with many languages, not just English and Hindi, IPL 2918 was broadcast in 8 different languages across the Star network,” says Santosh N, Managing Director, Duff & Phelps.

IPL 2018 also highlighted the importance of online platforms to garner higher viewership. This year, Hotstar set a world record of OTT viewership with 10.7 million viewers concurrently watching the 2018 IPL final where CSK defeated Sunrisers Hyderabad (SRH) to clinch the title for the third time in IPL’s history. “Clearly, OTT sports viewership no longer remains a prospect, but has become an established and fast-growing market,” says the report.

With Star India on the pitch, advertisers also had a field day. With 80 percent of its advertising slots said to have been sold even before the season began, Star is estimated to have earned Rs 20 billion through TV and digital ads, compared to Rs 13 billion earned by Sony.

What IPL 2018, however, will be best remembered for is the emergence of young cricketing talent – from KL Rahul to Krunal Pandya to Mohammed Siraj. While these young guns of cricket created long-term bench strength for their franchises, the significance of marquee players such as MS Dhoni and Virat Kohli cannot be underplayed as they help secure a premium from their sponsors for their teams.

Drawing parallels with the European Premier League (EPL), Indranil Das Blah, CEO of Mumbai City Football Club and Co-CEO, Kwan Entertainment and Marketing Solutions says, “If you look at Real Madrid or Barcelona, the reason why those clubs are so successful apart from playing well on the pitch is because of marquee players such as Cristiano Ronaldo (Real Madrid) and Lionel Messi (Barcelona). Marquee players do make a significant impact when it comes to advertising.”

“Most sponsors who are associated with CSK or RCB, they are associating 50 percent to the team and 50 percent for marquee players like Dhoni and Kohli because icons play a huge role in India and are consumed widely,” adds Blah.

As seasons pass, the eight teams that together make the IPL have come to be bucketed into two sets of fours. The top four – MI, KKR, CSK and RCB enjoy considerable premium in sponsorship revenues over the bottom 4 – Sunrisers Hyderabad (SRH), Delhi Daredevils (DD), Punjab Kings XI (KXIP) and Rajasthan Royals (RR). Will this set of have-nots be able to clean bowl sponsors next season?

Blah says, “Teams that are highly visible, those with marquee players, those present in big geographical areas like Mumbai, Delhi, Kolkata will always be bigger brand names. MI or KKR are bigger brand names because of (the presence of) marquee players and also because they’ve done really well over the past 11 seasons.”

“There will always be teams like RR and KXIP – smaller teams, smaller budgets smaller players, and their performance has not been as good as it should have been. So the demarcation between the have and have-nots will exist for a while,” he adds.

Like all major sporting events globally, effective monetisation of the IPL is the only way to long-term success. Much like the EPL, the Duff & Phelps report underscores the importance of brand IPL and individual franchises to keep fans engaged through marketing and brand building exercises, both during and outside the tournament season. Typically, franchises spend 5-15 percent of revenue on marketing.

For the past several years, merchandising has been identified as the game-changing stroke to monetize franchises. Yet, merchandising has been grossly low till date. Varun Gupta, MD – APAC leader for Valuation Services at Duff & Phelps explains why.

“There are two reasons,” says Gupta, “One is the availability of spurious merchandise in India. It is very easily available, easily accessible, so a lot of the market for merchandising does not even go to the actual stuff. Therefore, it becomes difficult to charge remunerative prices (for branded merchandise). The other challenge is while there is a huge population, the purchasing power in several pockets is not as high.”

Building their brands digitally is also crucial to franchises. Backed by superstar Shah Rukh Khan, KKR enjoys a following of 21.5 million across. Facebook, Instagram and Twitter after having invested significantly in the early part of IPL’s existence. While other franchises have also taken to digital, keeping fans regularly engaged through promotions, tweets and updates, experts say they will need to do a lot more.

With more than a decade behind it, the IPL is now entering a stable phase. With the BCCI locking in title sponsor Vivo and broadcasting partner Star India until 2022, IPL’s brand value is unlikely to grow in higher double digits. So what can the BCCI, as the owner of the IPL, do to sustain its growth momentum?
Gupta of Duff & Phelps says, “One of the things BCCI is doing is increased audience engagement through things like fan parks so that IPL is not just limited to a few urban centres. They are taking it to tier 2, 3 cities and increasing audience engagement there.”

That said, with sponsorships and media right renewals growing multiple-fold since the IPL commenced, the report says the months of April and May will stay demarcated as IPL’s territory for the foreseeable future.

Elon Musk forms several ‘X Holdings’ companies to fund potential Twitter buyout

3 Mins Read

Thursday’s filing dispelled some doubts, though Musk still has work to do. He and his advisers will spend the coming days vetting potential investors for the equity portion of his offer, according to people familiar with the matter

KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow