The Indian Premier League (IPL) has smashed yet another record, as a recent report reveals that the world's richest cricket league has now become a decacorn with a valuation of $10.9 billion!
The IPL has become a cultural phenomenon since its inception in 2008, and its meteoric rise in value is a testament to its continued success and popularity.
The report titled 'Beyond 22 Yards', the IPL Valuation Report 2022 by D and P India Advisory, sheds light on the league's impressive financial growth and highlights its dominant position in the global sports industry. Let's delve deeper into the details of this extraordinary achievement.
The recent valuation represents a growth of 90% since the league's inception in 2008. To predict the ecosystem's value every year from inception, D&P used IPL’s recent ecosystem values, including those reported by third-party valuation firms, and benchmarked the key metrics spread across multiple years.
What has led to IPL's meteoric growth?
The report highlights that media rights have emerged as the most significant source of revenue for the IPL, with the league's ability to attract large viewership and engage fans helping it to command premium prices for its media rights. As the number of matches has increased over the years, the total value of media rights has also gone up significantly.
Other forms of sponsorships have further fuelled this growth. D&P noted that the IPL's broadcast rights fetched Rs 486 crore in 2008, while the title and associate sponsorship rights brought in another Rs 36 crore and Rs 48 crore, respectively. In contrast, the title and associate sponsorship rights for the 2023 edition of IPL have fetched Rs 577 crore and Rs 414 crore, respectively, representing a significant increase and reinstating sponsor confidence in the league.
The addition of two new teams, Gujarat Titans and Lucknow SuperGiants, which were bought last year at a combined value of $1.6 billion, has also contributed to the league's growth. The average price tag of a team has seen a 16-fold jump since its inception, which has been instrumental in boosting the valuation of IPL to become a ‘Decacorn’. The digital rights being sold separately from TV rights would also result in greater engagement on the digital platforms.
The report states that the Board of Control for Cricket in India (BCCI) launched the women's Indian Premier League with a base price for a franchise at Rs 400 crores ($ 50 million), which is higher than most other cricket leagues globally and will add immense value to the overall IPL Ecosystem. However, the report notes that it is unfair to compare the two leagues. Santosh N, the managing partner of D&P Advisory, believes that comparing WPL's current valuation with the value of the IPL in 2007-08 would make more sense. But it should be noted that the WPL is currently playing with only five teams, whereas the IPL had eight teams initially.
How does the IPL compare to other major sports leagues?
The report also notes that the IPL is still significantly behind in terms of ad rates when compared with some of the other global sporting leagues. For example, a 10-second slot for an ad during IPL 2022 cost nearly $20,000, whereas the ad rates for the same time slots in National Football League, English Premier League, and Major League Baseball were over $1,00,000. Drawing this comparison, the report mentions how IPL has a lot more space to grow in the future provided broadcasters can monetize the content well.
In conclusion, the IPL has been a game-changer for the Indian sports industry, and the findings of the report demonstrate the tremendous potential of the Indian market. The league's growth has been fuelled by its ability to attract large viewership and engage fans, along with media rights and sponsorships. With the impending introduction of 5G services, greater penetration of the internet, and increased smartphone usage, the league's growth is set to continue in the future.