According to a report published by Duff & Phelps, A Kroll Business, the value of the Indian Premier League dipped by 3.6% to reach Rs 45,800 crore in 2020.
Individual franchisees also witnessed a reduction in their brand values over the last year. The report attributes this loss to reduced franchisee-related sponsorship revenue, loss of gate receipts, reduced food and beverage (F&B) revenue and certain teams’ on-field performances.
In terms of loss of brand values for teams, Chennai Super Kings (CSK) and Kolkata Knight Riders (KKR) saw their brand value erode by approximately 16.5% and 13.7%, respectively, compared to last year. CSK’s brand value has reduced from Rs 732 crore to Rs 611 crore, while KKR’s brand value has dropped from Rs 629 crore to Rs 543 crore.
Mumbai Indians also saw a loss of 5.9% in terms of brand value, but retained top spot among the teams with Rs 761 crore.
In 2020, the IPL, which was in its 13th season, was rescheduled from March to September because of the pandemic. It also saw lowered sponsorship revenues as compared to previous years (Dream11 paid INR 222 crores for the season, as against Vivo’s cancelled contract of INR 440 crores per season for the IPL title sponsorship).
Santosh N, external advisor, Duff & Phelps India, said, “Similar to the impact on other businesses and the overall economy, the pandemic led to a decline in the IPL ecosystem value. However, with people forced to spend time at home, there was an increase in IPL television viewership. The 2020 edition was a huge success for broadcasters as it broke viewership and advertising revenue records. Television ratings skyrocketed and advertisers tapped into this opportunity to scale up their brand image. Despite the challenging year, this momentum is indicative of how strong the IPL brand has become."
He added, “With the economy opening and COVID-19 cases decreasing in India, we expect sponsorship deals to be back to their pre-COVID-19 levels. We have now entered a more stable phase in terms of the IPL ecosystem's value; the value appreciation is not expected at the rate of previous years. However, an increase in the number of teams in 2022 and the renewal of media rights in 2023 could enhance the IPL ecosystem value in the future."
Varun Gupta, managing director and Asia Pacific leader, valuation advisory services, Duff & Phelps - A Kroll Business, said, “The IPL reflects the evolution of the modern cricket business, with clubs benefitting not only from the sport's enduring popularity in India but also from the game going global and from some great marketing initiatives. We believe that for growth trajectories to maintain their momentum, all teams need to continue broadening their footprint, forming relationships and generating revenue opportunities in growth markets.”