UK-based Brand Finance had valued the IPL enterprise at $2.01 billion (Rs 9,200 crore at current rates) for Season-II; sources indicate this valuation could increase by 50 per cent. With two new teams, a base price of $225 million for the teams ($113 million higher than the most expensive team at present) and over 300 players set to go under the hammer in October 2010, IPL 4 is sure to get bigger.
It's All About the Money
The cash-spewing innovations have already started: Apart from TV rights, IPL will also rake in the moolah from theatrical rights. This year, IPL Chairman and Commissioner Lalit Modi has raked in almost $70 million (Rs 330 crore) by selling theatre-screening rights of the tournament to Entertainment Sports Direct, which, in turn, has partnered with UFO Moviez to screen IPL matches in HD quality in 800 screens across the country. Sanjay Gaikwad, CEO, UFO Moviez, expects box office collections from the IPL matches to touch Rs 30 crore in season-III. Says Gaikwad: "This is probably the first time that any sports league is leveraging this aspect of the business." The semi-finals and finals will be screened in 3D, a first for sporting events.
Rohit Gupta, President, Network Sales, Licensing and Telephony, Multi Screen Media, the holding company of broadcaster SET Max, says, "With IPL back in India, we started sales in mid-2009 so that marketers have enough time to create and plan extensive creative or marketing communication." SET Max is commanding a premium of 20 per cent on advertisements over last year's edition. The broadcaster is commanding Rs 5 lakh for a 10-second ad spot for the matches. Last year, the average cost of a 10-second ad spot was about Rs 3.75 lakh. While 80 per cent inventory has been sold, the balance has been kept aside to be sold at a premium when the tournament is at its peak.
Vedam Jaishankar, Bangalorebased cricket analyst and author of Rahul Dravid's biography, says Modi has played a masterstroke this year. "The tickets for hospitality boxes will be sold at a minimum of Rs 50,000 each. Besides getting hospitality during the match, these people will be invited to the after-match parties," says he. The financial success of IPL 3 even before the matches start in February is luring new business into the league.
Signs of IPL's growing net worth were evident as early as February 2009 when Rajasthan Royals, the IPL champions in Season-I, sold a 12 per cent stake in their franchise for around Rs 70 crore, valuing the franchise at a shade less than Rs 600 crore , or nearly double the $67.5 million paid a year ago to acquire the franchise.
For Season-IV, the auctions for two new teams will be held by the end of February (eight months before the October auction for 300 players) with a base price of $225 million (Rs 1,035 crore) each. This is more than double the value of the costliest team currently— Mumbai Indians at $111.9 million (Rs 514 crore). All eight franchises will be given the choice of retaining any six players (four Indians and two foreigners) they want. IPL boss Modi, however, remains tightlipped when asked if a base price had been fixed for the players. "Nothing has been decided yet. The modalities for Season-IV auction are still being worked out," he says.