It was the year 2007, the year when India was out of the 50 over world cup in the League stage.
Zee Entertainment Enterprises launched Indian Cricket League, intending to provide India with the reserve strength it requires when major players get injured or retired. The idea was new and widely accepted in the Indian cricket community but not positively received by BCCI, the apex body, and to counter BCCI, Launched IPL in 2007 intending to stop players from joining ICL seeing the cash-rich and innovative league. What is called the brainchild of Lalit Modi has evolved throughout the year to near the brand value of Formula one in 2019.
According to Duff & Phelps, the brand value of IPL is whomping Rs 45,800 crores in 2020 though it took a 3.6% dip from the record Rs 47,500 crores brand value in 2019 due to the Corona Pandemic and delayed IPL in 2020 with no audience outside India. If we consider IPL as a start-up then it had done a fair bit of growth to be in Top 10 Valued Start-up in 2021 considering companies like Paytm has a valuation of around 20 billion dollars and IPL has 6.2 billion. But as a sports India is a nation with almost 90 crore cricket followers and with the viewership and popularity that IPL enjoys in India as well as abroad. With cricket boards like England and Africa prioritizing IPL as well as players from abroad giving it higher importance the valuation can go multifold for sure.
As per the recent valuation, Mumbai Indians top the valuation chart with Rs.761 Crore and Rajasthan Royals is at last with Rs.249 Crore.
Where does the Money Come from?
From a modest Rs. 236 crores in 2008, the media rights touched a phenomenal Rs. 3269 crores in 2019. Season 2018 – 2022 Star India acquired IPL media rights against 16,347 crore INR which is 3,269 crore INR for the season. So, the major chunk of revenue definitely comes from this high rights issue by BCCI. A comparison of broadcasting rights for different leagues are given below
BCCI earns from a pool of sponsors in a different category.
It will earn Rs 440 crore from Vivo as the title sponsor along with Rs 220 crore from the five official sponsors, and another Rs 60 crore from the umpire and strategic time-out sponsorship. At present, the IPL 14 has signed in Upstox, Dream11, Unacademy, Tata Motors and Cred as official sponsors.
Star Sports, the official broadcaster of the VIVO IPL 2021 has roped in 18 sponsors and over 100 advertisers across multiple brand categories, days ahead of the commencement of the league. The 18 sponsors on-board for the 2021 edition are Dream11, Byju’s, Phone Pe, Just Dial, Upstox, Bingo, Kamla Pasand, Association of Mutual Funds in India (AMFI), Frooti, Asian Paints, Thums Up, Vodafone-Idea, Mondelez, Amazon Prime, Groww, Cred, Garnier Men, and Havells. The categories of advertisers include Edtech, Fantasy Sports, Beverages, Pay Wallets, Home Décor, Auto, Telecom, Consumer Durables, FMCG, Financial Services amongst others.
Sources reveal that, depending on the teams, brands have paid anywhere in the range of Rs 25 – 15 crores for a slot in the front of the team jersey, and Rs 7 – 13 crore, for a space behind the jersey. Meanwhile, the front of a helmet has been sold for Rs 2-4 crore, while the shoulder position of team jerseys have been sold at between Rs 1.5 crore – Rs 3 crore, with the leading arm ranging on the higher side as opposed to the non-leading arm.
In stadium revenue
Revenue also comes from the ticket sales and merchandise sales as well as multiple branding inside the stadium for the sponsors which definitely add a small chunk in the revenue. However, due to the Covid 19, the revenue from this part is almost zero and teams are still exploring the same.
IPL and Formula One
The IPL makes a fascinating correlation with Formula 1, which is additionally well known among Indian watchers. It was as of late taken over by Liberty Media Corporation at a business estimation of US$8 billion, which isn't excessively far in front of IPL's US$6.2bn valuations. Speeding through the rankings of prominence, Formula 1 sees 20 drivers in 10 groups and rewarding sponsorship arrangements for sure, making it one of the head types of hustling all throughout the planet since its debut season in 1950. Given that IPL's business esteem has developed by 10-11% consistently since 2009 except the pandemic year, there is a high probability that it can surpass Formula 1 surprisingly fast and check-in a platform finish.
Though it has made a significant impact, it is far behind major sporting leagues
The top 5 teams of the IPL have a combined brand value of $321mn which pales in comparison to the top 5 teams in the English Premier League at $6.5bn and La Liga at $4.2bn.
Source: Brand Finance
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 its 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."
The Brand IPL is here to stay and provide GDP growth to India as well as bench strength to the Indian Cricket team and 2 months’ entertainment per year with an extravaganza of sports.
Author: Santosh Mishra
About Author: MBA IIM Rohtak | Ex-Accenture| Formula Bharat |Consultant of the Year IIMR || VSSUT(UCE) Mechanical || Content Strategist || Branding || Dreamer