IPL 2020 certainly isn't as lacklustre as it was feared to be. Broadcaster Disney-Star, claim media planners, has managed to sell over 85 per cent of its inventory (at the 2019 price) and is looking at selling the leftover inventory at a premium. Its inventory on Hotstar is known to be sold out and the network, say experts, could be well on its way of earning as much it did last year (Rs 2,000 crore). Though the franchises did take a steep beating in advertising revenue, they managed to sell most of their inventory. However, the 2021 edition of the IPL is expected to be staged as per schedule in March next year, which means there would barely be a gap of four months between the two seasons. Will the broadcaster, Disney-Star and the franchises be able to pull it off in such a short gap?
Considering the tough economic situation and the advertisers' overall hesitance to loosen their purse strings, it does seem to be a difficult task for the IPL stakeholders. But a large section of the industry actually believes that staging IPL 2021 barely a few months after the 2020 season may not be as bad for the broadcaster or the franchises. The biggest advantage for Disney-Star, according to former CEO of Neo Sports, Harish Thawani, is that none of the sports networks has any original content of significance in the next few months. "The T20 World Cup has been cancelled, the domestic schedule has also been scrapped, which means IPL will be the only live event that advertisers can invest on. Star will be delighted as no one else has programming. Even the general entertainment channels are gasping as content creation is frequently getting disrupted due to COVID challenges." In fact, Thawani says that Disney-Star should have taken advantage of the situation and actually sold IPL at a premium this year instead of selling at last year's price. "If I were Star, I would have sold IPL at double the price of last year."
The next season of IPL being staged within four months of the current season can be a huge positive for the brands investing on the property, as it would help them to stay relevant, points out Siddharth Raman, Chief Business Officer, Sportz Interactive. "The premium for IPL will go up too," he says. Komal Mehra, Head, Sports Initiatives and Associations, Usha International agrees with Raman. "If brands can afford it, they should step forward and continue their association as it helps to improve brand recall," says Mehra.
Santosh N, Managing Partner, D and P Advisory LLP and external advisor, Duff & Phelps, which has valued the IPL ecosystem as a $6.3 billion asset also agrees that staging two seasons of IPL at short intervals will neither impact advertising revenue nor valuation. "The English Premier League happens for 8-10 months and has enough advertisers, a 4-5 month gap is good enough for IPL," he explains.
The major negative for IPL valuation this year has been VIVO pulling out as title sponsor and the coming in of Dream 11 at less than half the price of what VIVO paid. "The positive is the fact that despite the economic crisis, IPL has been able to find sponsors. It did find a title sponsor at a short notice and the broadcaster was also able to sell a large part of its inventory, which means that the fundamentals of this asset are intact," says Santosh. He expects a slight dip in the IPL valuation in 2020. "We expect a flattish value return, it won't be significantly lower than last year."
IPL, according to Thawani, needs one normal financial quarter to get all its big-ticket advertisers back. "During the global financial meltdown in 2008-09, advertising went down by 60 per cent, but by the time the 2010 season began, advertising had normalised. Only if COVID goes out of control, the broadcaster and franchises may find it difficult, as BCCI will not be able to stage the league in India," Thawani further explains.
The other big question is where will IPL 2021 be staged? Considering the surge of COVID cases in India, many believe that the UAE could be the venue for the next season too.
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