Screaming Skull
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Like gladiators, cricketing stars from across the globe are battling it out for their respective Indian Premier League teams in the IPL T20 Cricket Tournament. The competition is on the cricket field today, but the day is not far away when it might move to the stock markets.
The huge success of the IPL has heralded a new innings in the history of Indian cricket. A huge money spinner, the two-year-old IPL is worth a whopping $2 billion, according the United Kingdom-based brand valuation consultancy Brand Finance.
"The IPL brand alone has a value of over $311 million. The brand can certainly create long-term value with its strong intrinsic strength and foundation. The IPL is just like any company today and it holds a long-term shareholder value. In 2-3 years, the IPL clubs may get listed on the bourses just like the popular English Premier League football teams," says Unni Krishnan, Country Manager, Brand Finance India.
This innovative form of the cricket has attracted a huge fan following across the globe. The IPL is a now a product with a 'made in India' tag and a huge brand value.
An iconic global brand
The brand valuation is done on the basis of the team's ability to generate sponsorship, secure licensing, sponsorship and merchandising deals, besides the team members' performance and the ability to manage the club.
"The IPL is no longer an Indian brand. It is a global iconic brand exported from India. The team is not run according to the whims and fancies of one person. It is professionally managed making value creation a reality," Unni Krishnan points out.
It is Chennai Super Kings who currently are the top team this IPL season that is being hosted in South Africa. However, according to the Brand Finance study based on last year's performance, Kolkata Knight Riders owned by Bollywood superstar Shah Rukh Khan tops the list as the most-valued team with a brand value of $42.1 million.
KKR is commercially astute
"KKR is very commercially astute and has the upper hand in terms of brand promotion. Our study is based on last year's performance and these rankings are set to change in the coming years. The big losers and the big winners will be demarcated by a huge margin in the coming years," explains Unni Krishnan.
A lot of money is riding on the players as well. "Some of the top players, like English team members Kevin Pietersen and Andrew Flintoff, have not yet demonstrated top quality performance in the T20 format, while the not-so-famous cricketers have done exceedingly well.
Going to South Africa
The moving of the IPL tournament away from India does not have a negative impact. It helps the league get a huge fan following abroad.
The Bollywood connection in IPL has certainly added to its value with stars like Shah Rukh Khan, Preity Zinta and Shilpa Shetty as the team owners. "It is a cocktail of entertainment and excitement. Bollywood has a mass connection and it helps in brand building."
Brand Finance has treated IPL as a single commercial entity in order to evaluate its worth. This means they have aggregated the income that both the Board of Control for Cricket in India (BCCI) and the franchisees will achieve, and the expenditure that each will incur. All cross-charged income/expenditure has therefore been ignored. Brand Finance calls this concept the 'IPL System'.
Tough competition
Money, fame and glory. . . the IPL teams have it all, but the days ahead will not be easy for them.
"There will be tough competition for IPL, with other countries like South Africa and England planning similar cricket leagues," says Unni Krishnan.
"IPL cannot afford to rest on its laurels. It has to improve the quality of the game and strive to win a larger fan following and boost its brand loyalty. IPL has to leverage its fan following to get more revenues," he says.
A good marketing strategy is a must for a platform like the IPL. "The success of Manchester United shows how well one can market a game. Manchester United is truly a marketing machine," he adds.
IPL needs to keep its competitive edge and be innovative with modern formats and architecture in the way the game is played to remain competitive.
Money spinner
A big share of the revenue comes from broadcasting rights, commercial sponsorship, gate receipts and merchandising of goods.
"The clubs must initiate sport marketing activities, maintain their standards, rigour and discipline to go up the value chain," says Unni Krishnan.
Many people in the UK who had given up watching cricket have begun to get interested in the game again. In today's world when people are hard pressed for time, the T20 format and the excitement it brings are refreshing. However, the challenge is to retain its vigour and popularity, explains Unni Krishnan.
The rankings
Here's how the 8 IPL teams rank in terms of valuation:
1. Kolkata Knight Riders top the charts with a brand value of $42.1 million, the highest among the eight franchises. Their franchise fee is $75.1 million.
2. Mumbai Indians follow the KKR team is followed with a value of $41.6 million. Their franchise fee is $111.9 million.
3. Rajasthan Royals are at the third spot with a value of $39.5 million. Their franchise fee is $67 million.
4. Chennai Super Kings, currently scorching the IPL tournament, are in the fourth position with a value of $39.4 million. Their franchise fee is $91.9 million.
5. Delhi Dare Devils are at the fifth spot with a value of $39.2 million. Their franchise fee is $84 million.
6. Royal Challengers are at the 6th place with a value of $37.4 million. Their franchise fee is $111.6 million.
7. Kings IX Punjab are at the 7th place with a value of $36.3 million. Their franchise fee is $76 million.
8. Deccan Chargers are at the 8th position with a value of $34.8 million. Their franchise fee is $107 million.