IPL business rises by 26 per cent to USD 5.3 billion@ Duff& Phelps report

Duff & Phelps, the premier global valuation and corporate finance advisor announced findings from its 2017 report, IPL: The Decade Edition: A Concise Report on Brand Values in the Indian Premier League.

 

The findings of the fourth edition of Duff & Phelps’ annual study of the Indian Premier League (IPL) franchisee brand values indicate that the overall value of IPL as a business has increased to USD 5.3 billion from USD 4.2 billion last year, representing a three-year CAGR of 13.9 per cent. The boost also came from the renewed VIVO title sponsorship deal at Rs. 2,200 crore. The report highlights the evolution of the IPL since its inception in 2008 and its steadily expanding foothold on the global sporting scene.

 

“Our valuation analysis reflected a notable increase in brand values in the IPL,” said Varun Gupta, Duff & Phelps Managing Director and Leader of the firm’s operations in India, South Asia and Japan. “This IPL season has garnered attention for all the right reasons. Namely, a relatively controversy-free tournament, increase in social media engagement, strategic and highly successful marketing initiatives and compelling on-field performances – all of which affirmed IPL’s standing as the most valuable cricketing league in the world,” he said.

 

The brand values of the individual teams have risen 34 per cent on average in 2017 compared to 2016. The Mumbai Indians sustained the top position with a brand value of USD 106 million, followed by Kolkata Knight Riders at USD 99 million and Royal Challengers Bangalore in third place at USD 88 million. Factors contributing to the rise in brand values of individual franchisees include increasingly lucrative advertising, broadcasting and sponsorship deals, reduction in franchise fees next season, increased viewership across India and increased fan engagement, evidenced by the rise in social media activity.

 

Satellite and digital broadcasting rights are up for renewal later this month and will be keenly watched. The renewed deal is anticipated to be significantly higher than the one signed by Sony nine years ago.

 


Sony’s ad revenues crossed Rs. 1,300 crore this year, while Hotstar’s ad revenues from IPL rose to Rs. 120 crore, more than double the previous year. Television viewership also ascended to new heights, with nearly 45 per cent of viewership coming from rural India, evidence of the reach and pull of the IPL.

 

“The new broadcasting rights auction will be one of the keenly watched developments over the next couple of months. The BCCI is clearly set for a huge windfall. We could be looking at a television broadcasting deal of record proportions in India. This deal may follow the precedent set by some of the big-ticket broadcasting deals across the world,” said Santosh N, Duff & Phelps Managing Director in Bengaluru.

 

Digital content is becoming a very strong medium of social media engagement for the sports viewers. There is a growing significance of content in today’s sports context. The number of tweets pertaining to the IPL has crossed 8.5 million and continues to grow. As per Maxus, a total of approximately 6 million mentions on social media were registered in the 10th season, more than twice those of the last season (approximately 3.1 million mentions.) Mumbai Indians had an incredibly successful digital media strategy, attracting over 83 million engagements across Facebook (50 million), Instagram (29 million) and Twitter (3.95 million.)

 

Trevor Birch, Managing Director at Duff & Phelps and Former CEO of Chelsea Football Club, said, ‘’I’ve been intrigued to watch how the IPL has marketed and protected its own brand value separate from the clubs. I have worked with some of the biggest clubs in the English Premier League (EPL.) Most of the EPL clubs are bigger brands than the EPL brand itself, whereas in the IPL, it seems that brand IPL is more powerful than the individual franchisees.”