IPL Hit for USD460m in Brand Value Decrease

April 11, 2011

According to a Brand Finance India report the value of Brand Indian Premier League (IPL) has decreased from US$4.13bn last year to $3.67bn this, representing an erosion of $460m of its long-term value.

While the value of the IPL itself has dropped due to last year’s controversies, the value of individual franchises have gone up in the most part with the Mumbai Indians pipping last year’s champions the Chennai Super Kings as the most valued franchise.

The IPL franchises have been valued based on three pillars cricketing excellence, marketing excellence and corporate governance.

The brand value of Mumbai Indians is $57.13m, an increase of over $17m from last year, followed by Chennai Super Kings with $55.37m after an increase of $9m from 2010.

Vijay Mallya-owned franchise Royal Chalengers Bangalore is at third position with a brand value of $47.58m after an increase of almost $6m. The Deccan Chargers are the remaining club to have increased their value significantly over the last year, rising from 8th to 6th in this years valuations after an increase of over $4m.

The Kolkatta Knight Riders and Delhi Daredevils, 4th and 5th of the 8 teams from last year, have seen very little movement in their brand value while the teams two least valued clubs seen decreases.

The Kings XI Punjab (7th) has seen its valuation drop just under $500,000 while the Rajasthan Royals have dropped rapidly from the 4th highest valued to the least after a decrease in value of over $11m sees them worth $33.78m.

These bottom two clubs valuation demise may well be down, in some part, to the fact that both the franchises till last year embroiled in a legal battle with the Board of Control for Cricket in India (BCCI) after their franchise agreement’s were terminated last year.

Both the franchises were also under investigation by the central agencies on alleged foreign exchange violation and lack of transparency in ownership pattern.

Brand Finance India Managing Director M. Unni Krishnan stated: “The IPL juggernaut has hit a speed breaker with an erosion of $460 million of its long-term value. IPL’s sustainability will largely depend on infusing governance policies to align all the stakeholders towards win–win relationships and thereby preserving the value in the long run. As costs like players’ wages rise, the early commercial success of IPL will be tested and the honeymoon is well and truly over.”