IPL brand value touches Rs 34,000 crore

The league valuations jump 26%, franchisee valuations by 34% in 2017 over the previous year

Despite the numerous controversies that have marked its ten-year run in the country, the Indian Premier League juggernaut rolls on.  In its tenth year, the IPL is an enterprise worth Rs 34,000 crore ($5.3 billion) and has posted a 26 per cent increase in its overall business from Rs 27,000 crore ($4.2 billion) last year. The league has seen a three-year CAGR (compound annual growth rate) of 13.9 per cent according to Duff & Phelps, global valuation and corporate finance advisory.

The overall value of IPL and the brand value of all the franchises have seen a stupendous rise since its inception according to the report. “IPL is a brand that is here to stay,” says Varun Gupta, MD of Duff & Phelps. He points out that one of the unique things about the tournament is that IPL as brand is bigger than the franchises, which is different from the global scenario considering that a club like Manchester United is a much bigger brand than English Premier League (EPL). The brand value of the franchises has seen a 34 per cent growth in the last year as compared to 2016 with Mumbai Indians topping the charts with $106 million followed by Kolkata Knight Riders at $99 million and Royal Challengers Bangalore in the third place at $88 million.

The growth in IPL’s value has been boosted by the VIVO title sponsorship deal at Rs 2,200 crores. For advertisers what has proven to be of immense interest is the continued rise in viewership; IPL’s cumulative reach in the tenth year is estimated at 400 million unique viewers. Nearly 45 per cent of the IPL viewership comes from rural households, which makes it a lucrative platform for a wide range of brands.

IPL has been doing all the right things to reach out to rural audiences. Fan parks, which until a couple of years ago, were limited to tier-I cities are now being planned in tier-II and tier-III cities too. It is a coveted property and “broadcasting rights that will be renewed later this month will be keenly watched. The renewed deal is anticipated to be significantly higher than the one signed by Sony nine years ago,” Gupta said. Sony’s ad revenues have crossed Rs 1,300 crore this year, while Hotstar’s ad revenues from IPL rose to Rs 120 crore, which is more than double the previous year, the report said.

The teams’ brand values are derived from a host of factors: on field performance, size of the support base, governance, social media engagement, celebrity influence and marquee players and marketing strategy. Most teams employ a mix of the above, but marketing is still a long way off from global leagues the report indicates. 

The star player concept is the main stay of the IPL teams, but if the star player does not perform then the franchise’s value takes a hit. So, it is important to have a mix of both performance and celebrity power in the team that pushes the brand value of a franchise upwards.

IPL@10

• Overall valuation of the IPL brand up by 26% to Rs 34,000 crore in 2017 from Rs 27,000 crore in 2016, boosted by the VIVO title sponsorship deal at Rs 2,200 crores 
• Mumbai Indians retain top position in the rankings and become the first IPL franchisee with over $100 million in brand value 
• Brand values of all the franchisees increased on average by 34% compared to last year 
• Social media is fueling the growth in IPL making it one of the fastest growing sports leagues on Twitter with 4.9 million followers, adding over 1.8 million fans on Facebook last season 
• The number of tweets pertaining to the IPL has crossed 8.5 million and continues to grow. 
• Approximately 6 million mentions on social media were registered in the 10th season, more than twice those of the last season
• Kolkata Knight Riders topped the social media rankings with 19 million followers on Facebook, Twitter and Instagram
• Two players, MS Dhoni and Virat Kohli, contributed hugely to merchandise value and team valuations in 2017
• Sony Pictures Network ad revenues grew by 10-12 per cent to clock Rs 1,300 crore in 2017, Hotstar’s ad revenues doubled as compared to the previous year to Rs 120 crore
• IPL’s cumulative reach in the tenth year is estimated at 400 million unique viewers, nearly 45% comes from rural households