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Pandemic hits brand valuation of IPL, teams in 2020

With the pandemic outbreak adversely impacting the entire live sporting industry in 2020, Indian Premier League’s brand valuation also took a hit. The brand valuation of the IPL eco-system declined by 3.6 per cent to ₹45,800 crore in 2020 from ₹47,500 crore in 2019, according to estimates by Duff & Phelps, a Kroll Business.

One of the key factors that led to this decline was title sponsor Vivo’s decision to pull out and Dream11coming in as the replacement, but at a much lower sponsorship deal agreement (₹222 crore). This led IPL Season 13 to record lower sponsorship revenues compared to the previous season. Also, the lack of gate receipts as matches were held without spectators and additional costs to create a secure bio-bubble environment, contributed to this decline.

However, against all the odds, BCCI managed to pull off a successful IPL season, raking in revenues of ₹4,000 crore while cutting costs by 35 per cent, against an anticipated revenue loss of ₹3,000 crore had the season got cancelled, the report added.

Santosh N, External Advisor, Duff & Phelps India Pvt Ltd, pointed out that even during a black swan event like the pandemic, the brand valuation decline of the T20 league was curtailed to just about 3.6 per cent, which showcases the strength of the sporting property. He added that record viewership and advertising revenues for the official broadcaster during the pandemic yearalso show how strong IPL has become.

IPL team valuations

Reduced sponsorship revenues by 15-20 per cent, loss of gate receipts, and reduced food & beverage revenue also led to lower valuations of individual franchisees of IPL.

Mumbai Indians retained the top spot in the franchise brand rankings for the fifth consecutive yearwith a brand value of ₹ 761 crore, down 5.9 per cent from last year.

The brand values of Chennai Super Kings (CSK) and Kolkata Knight Riders (KKR) decreased by about 16.5 per cent and 13.7 per cent, respectively, compared to last year. CSK and KKR retained their rankings as the second and third most valuable IPL franchisees.

“CSK’s worst-ever on-field performance and the concerns of an ageing roster have negatively impacted the brand credibility, and a correction was inevitable. CSK’s brand value has reduced from ₹732 crore to ₹611 crore. Further, CSK must find a new marquee player to attract sponsors post MS Dhoni’s retirement to maintain its brand value, otherwise, there might be further value correction,” the report pointed out.

KKR’s brand value dropped from ₹629 crore to ₹543 crore due to consistently poor on-field performance and lack of a marquee player.

Least impacted team

At the same time, Delhi Capital was the least impacted team that witnessed a decline of a mere 1 per cent in brand valuation to ₹370 crore. However, it remained at sixth position in the franchisee brand valuation rankings.

“We expect sponsorship deals to come back to pre-Covid levels in the upcoming season. We believe that the addition of two new teams in 2022 and renewal of broadcasting rights in 2023 will enhance the IPL ecosystem’s brand valuation considerably. With 10 teams and if BCCI manages to have more matches and a longer season, the brand value of the IPL ecosystem can be $10 billion in the next few years,” Santosh added.

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