IPL is worth a decacorn

Lalit Modi, the man behind the Indian Premier League (IPL), anticipated that the value of TV rights will reach $8 to $10 billion. While, the ultimate outcome from the rights sale, this year, fell short (6.2 billion), it nevertheless smashed records - quadruple the previous value in five years.

Sponsorships, ticket sales, and cash generated within the stadiums go above and beyond the media rights. According to the most recent round of IPL valuation reports created independently by D & P Advisory, the league's total value has increased to $ 10.9 billion. "The IPL has evolved into a Decacorn, a company worth more than $10 billion US. It's a 75% increase from 2020," the research claims. In the following cycle, Modi had anticipated that the rights value would quadruple, but the report is less optimistic. It predicts a minimal likelihood of any future large increase in media rights fees.

Media rights are the primary source of income for international sports leagues. But in the case of the IPL, TV revenue and new-age media rights carry the entire load. Half of the money is retained by the BCCI, the Indian cricket governing body, while the other half is divided among the ten teams. The research predicts that their media rights portion accounts for 70% of franchise earnings. "The sole publicly traded NFL team, the Green Bay Packers, received half of their revenue from broadcasting fees in 2012. This percentage ranges from 45% to 55% in the case of other significant leagues, according to publicly accessible information on the web," the report continues. Analysts cite merchandise sales and game-day revenue as two important targets for organisations looking to increase profitability.

"The central kitty's income in IPL has considerably decreased. You are referring to the first-ranked team receiving almost the same amount as the tenth-ranked club, possibly with a 10% difference. So, there isn't enough drive to do more. The teams still haven't figured out how to make money, according to Santosh N, managing partner at D & P Advisory.According to calculations based on per-match valuation (118 crores), the report downplays assertions that the IPL has been called "the second most valuable league in the world." Other leagues, as is often stated, have more games, teams, and a bigger playing window. It's not an easy exercise to rate it and put it up against leagues like the NFL, MLB, and the English Premier League. Any effort to accomplish so by using platitudes like "second most valuable league," etc., is just puffery. IPL has accomplished a lot in its 15 years of existence, but there is still much work to be done, according to an excerpt from the report.Even while linear TV is still a "prized asset" in the Indian market, the article applauds the increase in the value of the IPL's media rights and highlights the change in viewing to digital. The broadcasters, however, may not be laughing all the way to the bank. Advertisers are reportedly paying between 15 and 18 lakh rupees ($ 20,000) for a 10-second TV ad, and between 199 and 277 rupees ($3) per CPM (cost per mile) for a slot. In the NFL, the average unit cost for a 10-second advertisement spot in season two in 2021–22 was $ 160K, and for a 30-second Super Bowl spot, it was more than $6.5 million."The ad rates charged are a result of the viewer's potential for monetization, which in the case of IPL is mostly low due to the country of India's middle-class population. Thus, it is difficult for broadcasters in India to monetize media rights, which has an indirect impact on broadcasting, the paper notes.

It will start to alter gradually when 5G comes up and India's economy continues to expand, according to Santosh.