The Indian Premier League’s valuation dropped for the first time in six years at a time its title sponsor pulled out of the deal, costs rose and brand values of all its franchises fell amid the Covid-19 pandemic.
IPL ecosystem’s value fell 3.6% over the year-earlier to Rs 45,800 crore in 2020, the first decline since 2014, according to Duff & Phelps. In dollar terms, the franchisee saw an 8.7% dip at $6.2 billion.
IPL 2020 matches were played behind closed doors, effectively impacting the in-stadia revenues, including gate receipts and food and beverages, the report said. That, coupled with reduced franchisee-related sponsorship revenue and certain teams’ on-field performances and off-the-field issues, hurt the brand values of individual teams as well.
Chennai Super Kings saw its brand value fall the most, by 16.5% year-on-year, to Rs 611 crore in 2020, while that of Delhi Capitals’ dropped the least, by 1%, to Rs 370 crore, the report said.
“The standalone franchisee brands have seen their brand values decrease as the pre-Covid-19 sponsorship deals were reduced by 15-20% before the start of the tournament, predominantly because there were no more ‘meet and greet’ events with players; and there were no free tickets in stadiums,” Santosh N, external advisor at Duff & Phelps India. Pvt., was quoted as saying in the report.
Worst ever on-field performance and concerns of an ageing roster, according to the report, have negatively impacted the brand credibility of Chennai Super Kings, and a correction was inevitable. After MS Dhoni’s retirement, the team will need to find marquee players to attract sponsors post, maintain its brand value or else could see a further value correction, it said.
Mumbai Indians held the top spot for the fifth straight year despite a decline in brand value.
“With the opening of the economy and decreasing Covid-19 cases in India, we expect sponsorship deals to be back to pre-Covid-19 levels. We have now entered a more stable phase in terms of the value of the IPL ecosystem, as the value appreciation is not expected at the rate compared to previous years,” Santosh N said. An increase in the number of teams in 2022 and the renewal of media rights in 2023, according to him, would enhance the IPL ecosystem value in the future.
Besides, this season, Dream11, Unacademy and CRED joined the top league as title sponsors and official partners.