banner image banner image
 

IPL value soars by 19% to $6.3 bn in 2018: Duff & Phelps report

The overall value of the IPL ecosystem increased from US$5.3 billion in 2017 to US$6.3 billion in 2018, supportedby the broadcasting rights fee surging at a compounded annual growth rate (CAGR) of 18.9 per cent. This was revealed in the findings of the fifth edition of Duff & Phelps’ annual study of the Indian Premier League (IPL). The ‘IPL Brand Valuation Report – 2018’ is a concise report on brand values in IPL. 

The Mumbai Indians, with a brand value of US$113.0 million, continue to top the charts for the third season in a row. Kolkata Knight Riders are in second place with a brand value of US$104.0 million. The two-year ban imposed on Chennai Super Kings (CSK) and Rajasthan Royals has had some bearing on their brand values. However, CSK’s on-field performance and the Dhoni factor helped them to neutralise the negative impact, as they were valued at US$98.0 million alongside Royal Challengers Bangalore. Sunrisers Hyderabad, Delhi Daredevils, Kings XI Punjab and Rajasthan Royals follow in the brand rankings. 

Star India’s broadcasting rights deal was a gamechanger that put IPL on par with some of the biggest sporting leagues in the world (on a fee per match basis),” commented Varun Gupta, Managing Director, Duff & Phelps and Asia Pacific Leader for Valuation Services. “The change in content consumption, influx of over-the-top (OTT) and digital viewing platforms and increased support from advertisers, broadcasters and sponsors have given the IPL greater significancein terms of brand value.” 

Star India, the new broadcasting partner for the IPL, has given a boost to the broadcast rights fees, which increased by a CAGR of 18.9 per cent. Under Star, content delivery expanded to various regional channels across the Star India universe with commentary in eight different languages, rather than limiting the transmission to sports channels with just English commentary. 

Santosh N, Managing Director, Duff & Phelps, remarked, “Our IPL brand values report reflects the evolution of the modern cricket business paradigm with clubs benefiting from not only the enduring popularity of cricket in India but also from strong marketing and globalisation of the game. However, for growth trajectories to maintain their momentum, all teams need to continue broadening their footprint, forming relationships and generating revenue opportunities in growth markets. Ultimately, however, much of cricket’s future depends on ensuring the product is of a sufficiently high quality to continue attracting viewers, sponsors and broadcasters, the latter of which have become a vital component for the game’s financial health.” 

This season also witnessed the importance of OTT sports viewership, which has become an established and fast-growing market. Hotstar set a world record of OTT viewership with 10.7 million concurrent viewers, beating the 2012 world record of over 8 million concurrent viewers held by YouTube for Felix Baumgartner’s space jump. This surge in online streaming of IPL and the increasing momentum of OTT as a medium to watch sports online was also one of the key reasons for companies to show willingness to acquire digital rights for streaming IPL. 

Finally, social media continues to be an important driver of brand value. The first week of the previous season of IPL garnered 642,900 mentions on social media platforms. That has gone up to 855,400 in the first week of the 2018 season and to 1.3 million after two weeks. 

Marketing Strategy 

According to the report, it is estimated that on average, franchises spend anywhere between 5 per cent and 15 per cent of their revenue on marketing and promotion. Some teams, such as Kolkata Knight Riders, who invested significantly towards brand building in the early part of their IPL existence, have seen fantastic support from sponsors and partners. IPL events, television advertisements, merchandising, in-stadium freebies and other such promotional activities driven by the franchise go a long way in garnering exposure and support translating into brand gains. 

Merchandising in the IPL is currently in a nascent stage and most franchises are still coming to terms with the best possible way to monetise different streams. We believe that merchandising will be a game-changer for franchises that are able to crack this difficult market and identify new monetisation streams by tapping into their existing fan base. 

Celebrity Influence and Marquee Players 

The presence of key marquee players and celebrity owners in a franchise brings additional popularity to the individual team brands. Based on discussions with advertisers, sponsors and team management, the report states that the presence of a marquee player definitely gives an upper hand to the franchises while negotiating with sponsors and, in most cases, the sponsors are willing to pay a premium to be associated with that particular team. In addition, while franchise brands may be able to ride on the brand of a celebrity owner or a marquee player, they are also open to the risk of damage in cases where the said individual is embroiled in a controversy, even if that controversy is outside of the IPL. 

Social Media Engagement 

The ability of a franchise to engage fans on a regular basis, particularly during the IPL, has been crucial in building positive brand perception. Over the last few seasons, dedicated Twitter and Facebook campaigns were organised by the franchises with the intention of engaging fans regularly and keeping them up to date with the events of the individual teams. In estimating the brand values of the various franchises, the report gives additional weight to teams that have a large social media presence.

Click here for more related articles.

Marketing
@adgully

News in the domain of Advertising, Marketing, Media and Business of Entertainment

More in Marketing