IPL value up 6.5% to $ 16 bn; CSK most valued franchise
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1 month ago 06:00:25am Television

IPL value up 6.5% to $ 16 bn; CSK most valued franchise

New Delhi,13-June-2024, By IBW Team

The value of the Indian Premier League (IPL) went up 6.5 per cent to $16.4 billion (approx. Rs 134,858 crore) in 2024, helped much by an increase in title sponsorship fee from the Tata group, according to a report by American investment bank Houlihan Lokey.

Besides, the brand value of the cash-rich T20 league has also increased 6.3 per cent to $3.4 billion (around Rs 28,000 crore) year-on-year, it added.

The increase in the value of IPL, according to a media statement put out by the investment bank, was helped by title sponsorship by salt-to-software Tata Group for a further five years (2024 to 2028) for approximately $300 million (Rs 2,500 crore), paying approximately 50 per cent more than the previous deal of Rs 335 crore per season.

Multiple times tournament winner Chennai Super Kings (CSK) continued to be the most valued franchise, while Shah Rukh Khan co-owned KKR witnessed the highest annual growth.

Houlihan Lokey, Inc. ‘s 2024 IPL Brand Valuation Study is a comprehensive report into the business enterprise and brand values of the IPL.

It said the title sponsorship for the IPL has been secured by the Tata Group for a further five-year period, from 2024 until 2028, for approximately US$300 million, paying approximately 50% more than the previous deal of INR 335 crores per season, which along with last year’s media rights auction, reinforces the IPL’s status as a “pivotal platform for esteemed brands seeking to enhance their value”.

The IPL has proved to be an advertisers’ delight and the most coveted asset in cricket. On average, a T20 match will have around 80 to 100 ad slots strategically placed between overs, innings break, timeouts, and after fall of wickets. Similar to the NFL’s Super Bowl, where new TV commercials are launched every year, the IPL is doing the same for sports advertising in India, the report said.

This year, advertisers ranging from fantasy apps, FMCG, fintech, banks, and electronics all took advantage of the widespread appeal of the IPL by releasing new TV commercials.

“The IPL has solidified its status as a premier sports league on the global stage, showcasing an exceptional blend of sportsmanship, entertainment, and commercial success,” commented Harsh Talikoti, Senior Vice President, Corporate Valuation Advisory Services at Houlihan Lokey.

“The league’s growth is not just in numbers but also in its innovative approach to engaging fans and leveraging digital platforms. This year’s increase in value underscores the IPL’s strategic initiatives and its robust fan base.

“The eight legacy teams that have been a part of the IPL for a long time are now able to reap substantial profits from both the central pool’s income distribution and their own franchisee revenues from sponsorships, gate receipts, and merchandise sales,” he added.

No wonder private equity investments have become increasingly prevalent in the IPL ecosystem in recent years with CVC Capital and Redbird Capital acquiring stakes in IPL franchisees.

There has been a significant increase in franchise revenue over the years, primarily driven by revenue from television rights, despite each team having sponsorship revenue ranging from $$5.0 million to $12.0 million. A major agreement was signed by Qatar Airways for around $9 million (INR 75 crores) for a three-year contract with Royal Challengers Bengaluru.

Manoj Badale, Lead Owner of Rajasthan Royals, speaking to Houlihan Lokey, added: “The IPL as a product has always been highly investible. Having been inspired by U.S. sports leagues, and particularly the model of the NFL, the IPL was always going to attract institutional investors. A closed league (no relegation) offers long-term security, a ‘hard’ salary cap ensures a level playing field and competitive parity, and an equitable commercial model—in which central income is split equally among franchises—secures contractual revenue for franchises.”

In terms of valuation, despite failing to make it to the playoffs in 2024, with a brand value of $231 million, CSK continues to be the most valued franchise, achieving a growth of 9 percent from the previous year. IPL 2024 winners, Kolkata Knight Riders, saw the highest growth, with a 19.30 percent rise from 2023.

Kolkata Knight Riders, winners of the TATA IPL 2024, has replaced Mumbai Indians to secure the third place in brand value with $216.0 million. KKR capitalises greatly on the brand equity of its renowned owner, Shahrukh Khan, along with standout players like Shreyas Iyer, Andre Russell, Sunil Narine, and the upcoming talent Rinku Singh, the report said.

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