For the first time in the recent past, the IPL’s business enterprise value dropped to $9.9 billion from $11.2 billion last year. This marks a decrease of approximately 11.7%. D & P Advisory has released a report called ‘Beyond 22 Yards – IPL’s Legacy and WPL’s Vision’. This is an IPL and WPL Valuation Report for the year 2024’.
The decline in value results from a reassessment of media rights. D&P Advisory’s prior report had factored in certain assumptions on the media rights valuation when it gets renewed (post the current cycle), but recent developments in the Media and Entertainment industry and expected reduced competitors / bidders in the next IPL auction have led to a downward revision of the estimates. This downturn in the IPL’s valuation comes despite the league’s unyielding allure, which continues to attract audiences across television and digital platforms.
Medianews4u.com caught up with Santosh N, Managing Partner – D&P Advisory
1. With Disney-Star and Viacom18 set to merge what impact will this have on sports rights prices in general?
The merger between Disney-Star and Viacom18 could create a monopolistic entity in the sports broadcasting space, significantly increasing their bargaining power. Thus, the future growth in media rights prices may not be as steep as seen historically.
2. Zeel is actively cutting costs and restructuring. Does that make the situation more difficult when it comes to sports rights prices beyond just cricket?
Zeel’s cost-cutting and restructuring could make it more conservative in its bidding approach, potentially putting downward pressure on sports rights prices, as they may be less willing to spend aggressively.
3. On a standalone basis do you think that sports broadcasting is unprofitable given the high prices paid for the IPL and ICC rights?
On a standalone basis, sports broadcasting can be unprofitable due to the high costs of acquiring rights like IPL and ICC. Profitability often depends on a combination of high viewership, strong advertising revenue, and other monetisation strategies.
4. Disney-Star is said to be asking for a reduction on ICC rights prices citing things like the washout of the India Canada match. Do you think it has a valid case? Will it be able to seek a reduction on the entire deal?
Disney-Star has a valid point if they can prove that external factors, like match washouts, significantly impact the viewership and associated revenues. However, securing a reduction on the entire deal might be challenging unless such disruptions are frequent and substantial.
5. The report noted that digital players are not bidding for high profile cricket rights. How will segmentation of rights help them participate?
Segmenting rights could allow digital players to focus on specific, less costly packages, enabling them to participate without having to bid for comprehensive, high-value rights. This can increase their participation and innovation in the market.
6. How has the move to make sports properties mostly free on digital changed the game when it comes to growing viewership, using tech to create immersive experiences, allowing for targeted advertising?
Making sports properties mostly free on digital platforms has broadened access, growing viewership. It also leverages technology to create immersive experiences and allows for more targeted advertising, enhancing overall engagement
7. To what extent does on the field performance help boost local revenue of IPL franchises?
On-field performance can significantly boost local revenue for IPL franchises through increased ticket sales, merchandise, and team sponsorships. However, brand value and fan engagement also play crucial roles.
8. RCB has not yet won a title and yet its fan engagement level is high. Is this due to sharp marketing activities and brand building?
RCB’s high fan engagement is likely due to sharp marketing and the popularity of key players, showing that consistent branding and fan interaction can sustain loyalty even without title success.
9. How confident is D&P Advisory that a change in leadership at Mumbai Indians and CSK will not adversely impact their brand value?
For MI, a change in leadership is unlikely to adversely impact their brand value. This confidence stems from MI’s strong branding, effective marketing strategies, the presence of marquee players and a well-respected support staff, a large and loyal fan base, and a rich history of success. These factors help maintain brand strength and fan loyalty, even with leadership changes.
However, for CSK, the situation is different. CSK is synonymous with “Brand Dhoni,” and any change in leadership, especially if it involves MS Dhoni retiring, carries the risk of diluting the brand. Dhoni’s leadership, charisma, and long-standing association with the team have been integral to CSK’s identity and fan loyalty. Therefore, while the franchise’s strong legacy and fan base provide some buffer, a leadership change could impact their brand value more significantly than it would for MI.
10. Are we seeing a trend where brands are associating with multiple IPL franchises?
Yes. For the last few years, brands have become innovative. Instead of paying a large sponsorship fees and associating with one brand for a larger asset (like team sponsor or a jersey sponsor, etc), they are taking a smaller asset (like branding on the sleeves, kits, etc) from multiple franchises. Jio and Kingfisher among many other brands have taken this route for the last few years.
11. After 10 years merchandising in the IPL is still not growing. Is lack of disposable income a key reason?
The lack of growth in IPL merchandising could be due to the presence of a counterfeit market and weak IP protection laws in the country. Additionally, limited disposable income among fans contribute to this challenge.
12. How do you see the WPL helping grow viewership and interest for women’s cricket? Should stakeholders take a five year or a 10 year viewpoint when looking at ROI?
The WPL could significantly boost viewership and interest in women’s cricket. Stakeholders should consider a 5 to 10-year horizon for ROI, focussing on building a sustainable fan base and market presence.
13. Will Test Cricket still be around in five years time?
In my opinion Test Cricket will be there for the foreseeable future. But many smaller nations outside the big four cricket teams may play lesser and lesser Test Cricket as commercial interest might not be there.
14. In terms of non-cricket properties and leagues are they showing signs of improvement in terms of viewership and revenue? Or will India stay a one sport country?
Non-cricket properties and leagues are showing gradual improvement in viewership and revenue, but cricket still dominates. Sustained investment and strategic marketing are needed for other sports to gain a stronger foothold in India.
