The Indian Premier League (IPL), which kickstarted in 2008, has now become a Decacorn with a $10.9 billion valuation, states D and P Advisory in a report released on Thursday.
Since inception in 2008, the league’s value has seen a 90 percent growth and currently stands at $10.9 billion (Rs 87 crore), according to a report titled ‘Beyond 22 Yards’, The IPL Valuation Report 2022 by D and P India Advisory.
To analyse IPL’s estimated value in 2008, 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 to predict the ecosystem’s value every year from inception.
Sponsorship money steered IPL growth
The report reveals that the media rights have emerged as the most significant source of revenue for the IPL. The league’s ability to attract large viewership and engage fans has helped 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.
For the first time, media rights were spread among different broadcasters, breaking the monopoly of one company. The league has sold media rights at $6.2 billion, registering a three-fold jump compared to the previous five-year cycle in 2017. This pushed the growth of the league manifolds.
Other forms of sponsorships 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. Things have evolved significantly over the years.
For instance, the 2023 edition of IPL the title and associate sponsorship rights has fetched Rs 577 crore and Rs 414 crore, respectively. This is a significant jump reinstating sponsor confidence in the league.
With two new teams (Gujarat Titans and Lucknow SuperGiants) getting bought last year at a combined staggering value of $1.6 billion, the average price tag of a team has also seen a 16-fold jump from its inception. These two factors were instrumental in boosting the valuation of IPL to become a Decacorn. The digital rights being sold separately from TV rights would also result in greater engagement on the digital platforms. Further, the impending introduction of 5G services, greater penetration of the internet and increased smartphone usage will add to the rise in viewership.
Santosh N, managing partner of D & P Advisory highlights that this unicorn (IPL) is the most profitable of all the startups in the country.
“The IPL has been a game-changer for the Indian sports industry, and our analysis highlights its incredible success from the very beginning. The findings of our report demonstrate the tremendous potential of the Indian market, and we believe that it will encourage further investment in the Indian sports industry,” he notes.
Valuation of WPL and IPL
To add to the momentum, the Board of Control for Cricket in India (BCCI) launched the women’s Indian Premier League with a base price for a franchise at Rs 400 crores ($ 50 million). This price is higher than most other cricket leagues globally, and will add immense value to the overall IPL Ecosystem.
However, the report states it is unfair to compare the two leagues.
Santosh N believes that comparing the WPL 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 played with only five teams, whereas the IPL had eight teams initially.
“Also, the media rights and title rights for WPL are lower than the equivalent numbers for IPL at inception. However, the WPL is expected to show steady growth in terms of viewership and fan engagement, and with the right strategies and investments, it could become a significantly more valuable property in the future,” he adds.
Future prospects
Though a big property in India, on a broader scale, D and P Advisory 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 at 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 future provided broadcasters are able to monetise the content well.