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With IPL back in India, gate revenues expected to boost franchise value

After two years, IPL stadiums will again feature crowds, cheerleaders, stars and hospitality boxes. Entry will be capped but ticket prices will be higher and more games will be played with two more teams in the mix.

March 08, 2022 / 09:50 AM IST
The TATA Indian Premier League 2022 Mega Auction saw some of the surprise picks winning huge bids from franchises but also saw some of the big players went unsold. The two-day auction saw the ten franchises spend a huge amount of Rs 551.7 crore to buy a total of 204 cricketers. Here’s a list of some of the unsold players who went under hammer in IPL Auction 2022. (Image: IPL)

The TATA Indian Premier League 2022 Mega Auction saw some of the surprise picks winning huge bids from franchises but also saw some of the big players went unsold. The two-day auction saw the ten franchises spend a huge amount of Rs 551.7 crore to buy a total of 204 cricketers. Here’s a list of some of the unsold players who went under hammer in IPL Auction 2022. (Image: IPL)

The return of the Indian Premier League (IPL) T20 cricket tournament after two years spells good news for league as well as franchise revenues, as gate revenues will make a comeback, albeit with a sharply reduced spectator intake, this season.

Ajimon Francis, Managing Director, Brand Finance India, said the return of gate revenues will result in an 8-10 percent jump in the brand value of franchises over the previous year.

Francis noted that more matches will be played this year due to the addition of two new teams – Gujarat Titans and Lucknow Super Giants – and this will add to overall gate revenues.

Due to the coronavirus outbreak, the league not only had to move to the UAE but was also held behind closed doors, sans spectators. After two years, the IPL will play to its full strength with crowds in stadiums, cheerleaders, stars in the stands, and hospitality boxes, said Lloyd Mathias, Business Strategist, Angel Investor and former Asia-Pacific marketing head of HP.

“The on-ground component adds a whole layer of excitement and lets sponsors leverage the matches for their key guests. So, this should help the IPL’s brand value,” he added.

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All matches in Mumbai and Pune

On March 6, the Board of Control for Cricket in India (BCCI) announced the schedule for the upcoming TATA IPL 2022, which will be held in Mumbai and Pune starting March 26, marking the complete return of the league.

All the matches will be played in Maharashtra, at the Wankhede stadium, DY Patil stadium and Brabourne stadium in Mumbai, as well as the MCA stadium in Pune. Spectator intake will be capped at 25 percent of a  stadium’s capacity.

A total of 70 league matches and four playoff games will be played over 65 days against 60 matches previously.

“There will be a marginal increase in gate revenues due to the incremental games given the higher number of matches with the two new teams. Also, gate revenues are a small part of the overall franchise revenue pool, but quite critical as the franchisees make reasonable revenues from ground rights, food & beverage and merchandising," said Mathias.

On average, IPL franchisees’ earnings from match-day revenue, including ticket prices, merchandising, food and beverages, account for around 20 percent of their overall revenue.

Franchises earn around Rs 400 crore from the sale of tickets through the league. A match is estimated to generate Rs 3-5 crore in ticket sales. However, due to the IPL being held in the UAE in 2020 and partly being held there in 2021, franchisees were unable to derive the same benefit.

Impact of spectator cap

In all, 20 matches each will be held at the Wankhede stadium and DY Patil stadium, and 15 matches each at the Brabourne stadium and MCA International stadium, Pune.

While Maharashtra is allowing spectators in stadiums, it will have a cap on crowds. On March 2, the State government announced that as Covid-19 cases are on the decline, spectators would be allowed, but limited to 25 percent of the capacity. Moreover, only those who are fully vaccinated will be allowed in.

So, will the cap on spectators impact gate revenues?

Mathias noted that while some part of gate revenues would be lost given the crowd cap, “ticket rates will be increased knowing the hunger for live IPL action”.

Francis felt there would be no drop in gate revenues because of capacity constraints as tickets for the IPL will be sold at a premium. There will also be more games because of two more teams being added to the league.

While the ticket prices are yet to be announced, rates normally start at Rs 400 and can go up to the thousands in India.​

On-ground activation revenue

IPL teams also earn Rs 15-20 crore from on-ground activations. which the franchises had to let go of in 2020 due to there being no spectators in the stadium.

Mathias sees a definite lift in ground activations this year. "Many brands will unleash their full brand arsenal in the hope that the worst of the pandemic is behind us and also to kickstart their campaigns in style. So, franchise revenues from activations will go up for sure."

Francis concurred that revenue from on-ground activations will be higher this year. Due to there being more games and also because fintech and crypto players are now jumping on ad sales, there will be more money from on-ground activations, he added. While locations will be limited, Mumbai and Pune are high revenue potential locations," Francis noted.



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Maryam Farooqui
first published: Mar 8, 2022 09:50 am
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