Sunday, February 21, 2010
The swagger of IPL commissioner Lalit Modi at the venues where he is a regular is in keeping with the staggering opulence of the annual T20
cricket tournament he created. By wrapping his tournament in a multi-billion dollar money-spinning cocoon, Mr Modi has been able fend off all the controversies, twists and turns thrown at IPL every season since its inception in 2008.
A new study carried out by a UK-based brand valuation consultancy, exclusively for ET, affirms the IPL’s cash-cow prowess, so much so that it threatens to eclipse the English Premier League, the copybook used by Mr Modi to launch the event. As an enterprise, IPL’s overall brand value has more than doubled to $ 4.1 billion, or Rs 18,998 crore, in 2010 from a year ago, says Brand Finance. The only such comprehensive analysis of the IPL puts the combined brand value of all franchises at $333 million, or Rs 1,542 crore.
IPL’s sweeping popularity in a cricket-crazy nation has unlocked unprecedented value for its owner, BCCI, and the eight team franchises. With two more teams in from 2011, Brand IPL is set for another big commercial leap. The Brand Finance study has treated IPL as a single commercial entity, aggregating the income that BCCI and the franchises will generate, and their expenditure. All cross-charged income and expenditures have been ignored to arrive at the total worth, which it terms as the IPL Branded System (see graphic for methodology).
“IPL can be seen as a precursor to emerging global brands out of developing nations and will definitely enjoy a first-mover advantage,” says Brand Finance India MD Unni Krishnan. Mr Modi is understandably elated at the success of his brainchild. “This is just the beginning and there’s huge value to be unlocked still.”
According to the study, Chennai Super Kings (CSK) has emerged as this year’s most valuable team with a brand value of $ 48.4 million, or Rs 224 crore, replacing Kolkata Knight Riders (KKR) at $ 46 million, or Rs 213 crore.
Rajasthan Royals at $ 45.2 million, or Rs 209 crore, is third in the pecking order. Much of CSK’s rise on the brand graph is being attributed to MS Dhoni, who has led by example. “With IPL’s ratings and royalties on the rise, it doesn’t come as a surprise to me,” says N Srinivasan, MD of India Cements, the owner of CSK.
The astronomical leap in brand value by IPL ingests its emerging revenue potential too. “Other global benchmarks such as the EPL may be valued at $12 billion, but IPL has a better potential in value creation as there are no limits in audience and sponsors,” says Mr Krishnan.
Still, there are some gathering clouds. Sustaining the brand commercially will be a challenge, notes Brand Finance. Mr Modi is unperturbed. “I see the value of IPL doubling each year for the next few years.” Though franchises may not be in dire need for funds, he says sooner or later they’ll look to list on the stock market. “I know that some are already toying with the idea.”
Thanks to Economictimes