The next edition of the mega-sporting extravaganza Indian Premier League (IPL) is round-the-corner.
In a locked-down India last year, the economy was battered due to an almost static consumption pattern. Against this backdrop, last year’s IPL edition was received as a welcome change and distraction by the cricket-loving audience. As per a recently launched IPL Brand Valuation Report 2020 by Duff & Phelps, the thriving IPL ecosystem value dropped in by 3.6% in 2020. Amongst the many things that felt the pinch of the last year’s pandemic, the sports economy was a key component. 2020 was a challenging year for all businesses and categories due to the pandemic.
The IPL scorecard
- Even while IPL provided the much-needed relief to cricket fans locked at home for months on end, in overall terms it came down to INR 45,800 crore from INR 47,500 crore last year. While that is a substantial drop, but it must be seen in the context of the aftermath of the pandemic in which many industries got ravaged.
- As per the report, there was a dip in the overall value of IPL as well as the individual team valuation. The individual teams saw a drop in their brand values over the last year, impacted by the combination of the reduced franchisee-related sponsorship revenue, loss of gate receipts, reduced food and beverage (F&B) revenue and certain teams’ on-field performances.
- Of the teams, Mumbai Indians maintained its top spot in the franchise brand rankings for the fifth consecutive year. With a brand value of INR 761.0 crore, it slipped 5.9% from last year.
- In contrast, two of the popular heavy-weight teams Chennai Super Kings (CSK) and Kolkata Knight Riders (KKR) saw their brand value drop by approximately 16.5% and 13.7%, respectively, when compared to 2019.
- CSK’s brand value went down from INR 732 crore to INR 611 crore, while KKR’s brand value dropped from INR 629 crore to INR 543 crore.
It was not all gloomy
- Even as the pandemic led to a decline in the IPL ecosystem value, it however led to an increase in IPL television viewership since people were forced to spend time at home in 2020. As per the data, the 2020 IPL edition turned out to be a great success for broadcasters as its broke viewership and advertising revenue records, reiterating the strength of Brand IPL.
- As the economy opens up and the vaccine drive gets widespread, there is an expectation that sponsorship deals may go back to their pre-Covid levels. Having been around for 13 seasons, the IPL franchise is seen to be entering a more stable phase in terms of the overall ecosystem's value. As experts point out, an increase in the number of teams in 2022 and the renewal of media rights in 2023 may help in pushing the IPL ecosystem value in the future.
Varun Gupta, managing director and the Asia Pacific leader for valuation advisory services at Duff & Phelps (a Kroll Business), said: “The IPL reflects the evolution of the modern cricket business, with clubs benefiting not only from the sport's enduring popularity in India but also from the game going global and from some great marketing initiatives. For growth trajectories to maintain their momentum, all teams need to continue broadening their footprint, forming relationships and generating revenue opportunities in growth markets."