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Mumbai Indians, Chennai Super Kings top IPL brand value

MUMBAI: Chennai Super Kings and Mumbai Indians have emerged as the most powerful Indian Premier League (IPL) franchise brands pegged at $72 million each, according to consulting firm American Appraisal. Kolkata Knight Riders closely follows with a value tag of $69 million.

In the middle are Royal Challengers Bangalore ($51 million), Rajasthan Royals ($ 45 million) and Delhi Daredevils ($40 million), while Kings XI Punjab ($32 million) and Sunrisers Hyderabad ($25 million) are at the bottom of the barrel.

The report is based on a survey of 300 key participants of the IPL ecosystem—team managements, sponsors, advertisers, advertising agencies and broadcasters.

Incorporating a thorough analysis of the entire stream of cash flows available to franchises, the report breaks it down into two parts—cash flows that are attributable to brand strength (team sponsorship, merchandising, etc.) and those that are not brand related (share of central pool sponsorship, broadcasting, etc.). The brand value has been estimated only on the basis of the cash flows that are attributable to brand strength.

The report highlights the increasing importance of merchandising in the growth and realisation of brand value of the franchises. It draws attention to the huge difference between the merchandising markets for say, the La Liga of Spain ($2 billion) versus the IPL ($40 million). In other words, despite a population that is 25 times larger and an economy that is at least 25 per cent larger (and growing much faster), India’s IPL is only two per cent of Spain’s La Liga. Clearly, there is massive potential for growing the merchandising market.

American Appraisal expects the franchises to come out with innovative business models over the next few years to monetise this massive opportunity. Accordingly, it expects the merchandising market to grow tenfold by 2020, from $40 million to $400 million.

Based on the survey results, the report claims that the popularity of the IPL has either increased or stayed the same over the past six years. Advertisers and sponsors continue to want to associate with the IPL, with 57 per cent respondents claiming to have increased their advertising spend on the IPL over the years.

Moreover, highlighting the sheer importance of IPL as a platform for advertisers to reach out to their target customers, as many as 57 per cent of the respondents mentioned that they spend 2–10 per cent of their annual advertising budget on the IPL.