As per a 2021 Duff & Phelps report, IPL was valued at `45,800 crore in 2020, after a drop of 3.6% due to pandemic-related curbs.
Tata Indian Premier League, which kicks off on Saturday, has grown from strength to strength in the 15 years since its inception. The annual cricketing extravaganza, which generates revenue from advertising, sponsorships for teams, ticket sales, merchandising, in-stadia promotions, food and beverage sales, and other related events, continues to be an advertiser’s delight. The numbers tell the story: in the last five years, the advertising revenue that Star Sports, which has the broadcasting rights, earns from IPL has almost doubled from `2,000 crore in 2018 to an estimated `4,000 crore in 2022.
Media analysts estimate that the IPL ecosystem grew in the range of 7-9% year-on-year in 2021, despite the league being held partly in the UAE, after a break induced by the second wave of Covid-19 last year. This year, the ecosystem is likely to grow further with the addition of two new teams, a greater number of matches, and in-stadium audiences returning for this season.
As per a 2021 Duff & Phelps report, IPL was valued at `45,800 crore in 2020, after a drop of 3.6% due to pandemic-related curbs. In 2017, when Star India won the broadcasting rights for IPL for the five-year period of 2018-2022, the ecosystem was worth `34,400 crore. In that year, Star India’s winning bid for the broadcasting rights was `16,348 crore. Five years ago, this was the biggest such television deal for cricket, and it was double what Sony had paid for the first 10 years ― `8,200 crore.
gIn comparison to sports like football, cricket offers significantly higher airtime for advertisers. The broadcaster can easily insert two-three ads between overs and that happens 20 times in each innings. In addition, there are opportunities like strategic time out, super fours, super sixes, etc,” says Santosh N, managing partner, D and P Advisory.
IPL’s entertainment quotient also makes it an audience favourite. Jehil Thakkar, partner, Deloitte India, points out that IPL offers family entertainment and envelopes the whole country irrespective of gender, age and location. “There are very few such avenues available at scale that advertisers can leverage to reach consumers,” he says. According to Broadcast Audience Research Council (BARC) India, IPL 2021 ad volume was 1,680 thousand seconds, with 119 advertisers and 228 brands leveraging the media event.
The annual tournament was almost immune to the Covid-19 pandemic. Ajimon Francis, managing director, Brand Finance India, says that Brand IPL stayed resilient during 2020 and 2021 for two main reasons ― accelerated consumption of content on Disney+ Hotstar and the IPL governing council’s decision to conduct the league despite the challenges posed by the pandemic.
The total reach of IPL on Disney+ Hotstar stood at 300 million in 2021, and on TV it reached 404.95 million viewers. About 37% of Disney+ paying subscribers are from India and this is primarily because IPL is streamed on the Disney+ Hotstar platform.
Broadcast media rights, advertising revenue, and ancillary media revenue form the backbone of IPL’s valuation. Currently, the broadcasting rights fee per IPL match stands at $8.50 million. In comparison, the National Football League’s per match broadcasting rights fee amounts to $17.36 billion. Analysts say that IPL has a long way to go in terms of the scale that it can achieve.
One such growth avenue is teams. IPL 2022 has 10 teams, of which two are new ― Gujarat Titans and Lucknow Super Giants. Thakkar says, “In other leagues in the world, it is not uncommon to have one or two teams from the same city. In India, we are yet to have a team per state. There is a lot of headroom to grow.”
Star Sports’ broadcast rights expire this year, and the Board of Control for Cricket in India (BCCI) will auction the rights for the period of 2023-2027 this year. Players that are likely to bid include the likes of Amazon Prime Video, Viacom18, Netflix, Meta and the Zee-Sony combine, in addition to Star bidding for retaining the rights. With the likelihood of more teams being added, Thakkar expects that by 2026 IPL would have about 94 matches per season.
The IPL’s growing size and appeal mean that its broadcast rights could fetch the BCCI a tidy sum. BCCI is expecting IPL rights to be sold at Rs 40,000 crore ― this is more than double what Star India bid in 2017.
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