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As valuation falls, what’s in store for the IPL in 2021?

The IPL 2020 finale / www.iplt20.com

The next edition of the mega-sporting extravaganza Indian Premier League (IPL) is around the corner.

In a locked-down India last year, the economy was battered due to static consumption patterns. Against this backdrop, last year’s IPL season was received as a welcome change and distraction by the cricket-loving audience.

But according to a recently launched IPL Brand Valuation Report 2020 by Duff & Phelps, the value of the IPL media ecosystem dropped by 3.6% in 2020.

The IPL scorecard

  • Even while IPL provided much-needed relief to cricket fans locked at home for months on end, it brought in INR 45,800 crore, down from INR 47,500 crore last year.

  • As per the report, there was a dip in the overall value of IPL as well as the individual team valuation. Individual teams saw a drop in their brand values over the last year, impacted by the combination of reduced franchisee-related sponsorship revenue, loss of gate receipts, reduced food and beverage revenue and 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, heavyweights 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.

Not all gloomy

  • Even as the pandemic led to a decline in the IPL ecosystem value, it led to an increase in IPL television viewership. As per the data, the 2020 IPL edition turned out to be a great success for broadcasters; it broke viewership and advertising revenue records.
  • As the economy opens up, 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.

Expert view

Varun Gupta, managing director and the Asia Pacific leader for valuation advisory services at Duff & Phelps, 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.“

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