Afaqs: The game has just got bigger by having two more teams added namely Pune and Kochi. The brand value for IPL is just getting higher. On Sunday, two teams were auctioned for the 2011 season and made IPL richer by $ 703 million.
IPL’s branded business value has been doubled by $ 4.13 billion this season where last year it was $ 2.01 billion. This year Chennai Super Kings is ranked as the most valuable franchise of the season at $48.4 million.
A media analysis by India Infoline states that the gross profits of the team owners is expected to be between Rs 19 and Rs 43 crore this year. IPL as a business model has been proved successful. According to the report, Deccan Chronicle, India Cements, United Spirits and GMR are expected to contribute five-10 per cent of the total profits of these companies.
IPL is only getting bigger with each season as the ad-spend during the telecast is expected to rise from Rs 500 crore in 2009 to Rs 700 crore this year. IPL has signed partnership deals with 90 companies and the number is expected to rise next year.
Speaking about the valuation that the two new teams commanded on Sunday, Raghu Iyer, CEO, Rajasthan Royals, said, “We bought our team for $67 million and it now seems we got it at a bargain price. Now, all the teams would be valued at similar prices, because the product remains the same. Already, our team valuation has gone up some three times of what we bought it for, according to some independent research data in the public domain. As the new teams become more valuable, at least during the auction process, the experienced teams’ valuation would automatically go up.”
Sources among the Mumbai Indians’ sponsors told Business Standard, “We bought the team at $111.9 million, which was the most expensive team in the first IPL season. We knew, then, that the new teams that would come up after us would be even more expensive. It reflects the success of the property and that of the individual franchisees.”
A spokesperson of Kolkata Knight Riders said, “The value of IPL itself has doubled, so the auction price was expected to be high. However, the good news for us is that these valuations will also push the brand value of existing teams.”