IPL brand valuation soars to $6.3 bn in 2018, Mumbai Indians tops the chart

Brand IPL scored a big hit in 2018 with its valuation soaring 19 per cent over the previous year to touch $6.3 billion compared to $5.3 billion in 2017. According to corporate finance advisory firm Duff & Phelps, which released its IPL Brand Valuation Report 2018 today, the surge in valuation comes on the back of a big spike in broadcasting rights fee of the tournament.

Star India had won the five-year global IPL broadcast (TV and digital) rights with a bid of $2.55 billion (Rs 16,347.5 crore) in 2017, nearly double of what Sony had paid for earlier.

Other factors for IPL’s brand valuation zooming include the presence of marquee players, commentary in eight languages and rise in OTT (over the top) media  platforms thereby expanding viewership coverage. Intensive promotion over social media too helped.

As far as the valuation of individual teams goes, Mumbai Indians, with a brand value of $113.0 million, topped the charts for the third season in a row.  According to brand strategist and media planning consultant Gopinath Menon, the way Mumbai Indians franchise has been smartly marketed and promoted by its owners Reliance Industries has played no small part too. The star value of big hitters like Kieron Pollard and presence of Rohit Sharma and Hardik Pandya contributed too. On average, franchises spend anywhere between 5 and 15 per cent of their revenue on marketing and promotion, notes the report.

Kolkata Knight Riders are in second place with a brand value of $104.0 million. Despite winning the 2018 IPL title, Chennai Super Kings (CSK) could only place third on the brand valuation chart. The two-year ban imposed on the team had a bearing, though CSK’s on-field performance and the Dhoni factor helped them to neutralise the negative impact, and be valued at $98.0 million alongside Royal Challengers Bangalore.

CSR activities by various teams also had a role to play in their brand valuations, according to the report. For instance, Kolkata Knight Riders campaigned against plastic use and planted a sapling for every six hit.  As Aakash Chopra, former India opener and cricket commentator notes in the report, “A sentimental association is developed amongst the followers towards a particular franchise when the franchise gives back something to the society.”

Analysing the reasons behind the IPL’s brand values rising so much, Varun Gupta, Managing Director, Duff & Phelps and Asia Pacific Leader for Valuation Services, says, “Star India’s broadcasting rights deal was a game changer that put IPL on par with some of the biggest sporting leagues in the world (on a fee per match basis).”

The report estimates that Star India earned Rs 2,000 crore through TV and digital advertisements in 2018. Previous broadcaster Sony had earned Rs 1,300 crore in advertising revenues.

Gopinath Menon says that the fact is that IPL has now made cricket bigger than Bollywood for advertisers.

Former India cricketer, left-arm spinner Maninder Singh, says that he is happy that the brand valuation of the league has gone up. “When brand valuations go up, it means more money could come into cricket, and I am always happy if sportspersons could get to earn more,” he says, pointing to his days on the field when financial security was a worry.  Indeed, as the report notes IPL has had the power to transform strugglers into stars – the rags to riches story of Mohammed Siraj bought by RCB for Rs 2.6 crore is a case in point.