IPL 2018 the Annual Report on the Business Value of the Indian Premier League and the Most Valuable Franchise Brands
Total Page:16
File Type:pdf, Size:1020Kb
IPL 2018 The annual report on the business value of the Indian Premier League and the most valuable franchise brands June 2018 Foreword. Brand Finance has calculated the brand value of the Indian Premier League (IPL) and each of its teams annually since 2009. This research has helped decision makers to obtain a deep understanding of the value of the brands taking part in the world’s premier domestic cricket competition. With its exciting on-field action, packed stands, and hundreds of millions of viewers across the globe, the IPL is clearly the leading Twenty 20 league. The competition has proved a massive hit with fans, players, and sponsors, so it is not surprising that it is now at the forefront of the world of cricket with its innovative ways and huge crowds at stadiums. The world’s cricket superstars are all taking part, creating a league, which supported by a clear strategic vision, is unlikely to be challenged in the foreseeable future. Savio D'Souza Director, Brand Finance Rollercoaster Journey The past decade has been challenging for the IPL. It has been confronted by legal issues, by team instability, by venue problems, and by political interference. The flexibility of the IPL ecosystem to overcome these challenges and the tournament’s continued mass appeal to mainstream audiences demonstrate that the IPL brand continues to hold great strength in the eyes of its key stakeholders. In 2009, Brand Finance valued the IPL business as being worth US$2 billion, doubling the following year due to the tournament’s huge initial success. However, the IPL lost significant value in subsequent years as corruption and governance scandals engulfed the competition, while the Chennai and Rajasthan teams came under scrutiny for misbehaviour by their ownership. After 2013, the IPL was able to return to a period of strong value growth as it returned Ajimon Francis to a focus on cricket. The league exercised strategic discipline, reduced waste, and Managing Director focused on the quality of the core product. Of course, there are continuing challenges Brand Finance India like water scarcity, venues change, and other external issues, but the brands have built greater stability and are now more resilient than they formerly were. Valuing Brands Understanding the value of brands is key. As with any asset, it is important to have a clear valuation metric to ensure that your transactions are fairly priced. If you are paying for sponsorship, how do you know if you are getting value for money? If you are seeking sponsorship, how do you justify the prices you charge? Even players should take note. Few will be as commercially successful as Virat Kohli or MS Dhoni, but image rights can be lucrative and need to be part of contract negotiations. If you are intending to license your personal brand, how can you find a fair price? Brand Finance has conducted tens of thousands of brand valuations to help answer these questions. We have worked with companies of all shapes and sizes, from blue-chip internationals such as Vodafone and Shell, to local brands and sports franchises. Whether you are an owner, marketer, director, sponsor, or a player, we hope you obtain value from the Brand Finance IPL 2018 report and come away with a better understanding of brand valuation in this field. Cover Image, Executive Summary Image: www.facebook.com/TheChennaiSuperKings Brand Finance IPL June 2018 © 2018 Chennai Super Kings Cricket Ltd. All rights reserved. 3. About Brand Finance. Contents. Brand Finance is the world’s leading independent Foreword 3 brand valuation and strategy consultancy. About Brand Finance 4 Brand Finance was set up in 1996 with the aim of ‘bridging the gap between marketing and finance’. Contact Details 4 For more than 20 years, we have helped companies and organisations of all types to connect their brands Definitions 6 to the bottom line. IPL Business Value Analysis 8 We pride ourselves on four key strengths: • Independence Franchise Brands' Business Analysis 10 • Technical Credibility • Transparency Methodology 12 • Expertise. Sponsorship Services 13 Brand Finance puts thousands of the world’s biggest Sports Services 14 brands to the test every year, evaluating which are the strongest and most valuable. Sports Services Clients 15 For more information, please visit our website: Consulting Services 16 www.brandfinance.com Communications Services 17 Contact Details. For business enquiries, For further information on Brand Finance®’s services and valuation experience, please contact: please contact your local representative: Savio D'Souza Director Country Contact Email Address [email protected] Asia Pacific Samir Dixit [email protected] +65 906 98 651 Australia Mark Crowe [email protected] +61 282 498 320 Canada Charles Scarlett-Smith [email protected] +1 647 3437 266 For media enquiries, Caribbean Nigel Cooper [email protected] +1 876 8256 598 please contact: China Scott Chen [email protected] +86 1860 118 8821 East Africa Jawad Jaffer [email protected] +254 204 440 053 Konrad Jagodzinski Germany Holger Mühlbauer [email protected] +49 1515 474 9834 Communications Director India Savio D’Souza [email protected] +44 207 389 9400 [email protected] Indonesia Jimmy Halim [email protected] +62 215 3678 064 Ireland Simon Haigh [email protected] +353 087 6695 881 Italy Massimo Pizzo [email protected] +39 230 312 5105 For all other enquiries, Japan Jun Tanaka [email protected] +8190 7116 1881 please contact: Mexico & LatAm Laurence Newell [email protected] +52 1559 197 1925 [email protected] Middle East Andrew Campbell [email protected] +971 508 113 341 Nigeria Babatunde Odumeru [email protected] +234 012 911 988 +44 (0)207 389 9400 Romania Mihai Bogdan [email protected] +40 728 702 705 Spain Teresa de Lemus [email protected] +34 654 481 043 South Africa Jeremy Sampson [email protected] +27 828 857 300 linkedin.com/company/ Sri Lanka Ruchi Gunewardene [email protected] +94 114 941 670 brand-finance Turkey Muhterem Ilgüner [email protected] +90 216 3526 729 UK Richard Haigh [email protected] +44 207 389 9400 USA Laurence Newell [email protected] +1 917 794 3249 facebook.com/brandfinance Vietnam Lai Tien Manh [email protected] +84 473 004 468 twitter.com/brandfinance 4. Brand Finance IPL June 2018 Brand Finance IPL June 2018 5. Definitions. Definitions. Brand Value Brand Strength + Enterprise Value Brand Strength is the efficacy of a brand’s Each brand is assigned a Brand Strength Index (BSI) The value of the entire enterprise, made performance on intangible measures, relative to its score out of 100, which feeds into the brand value up of multiple branded businesses. competitors. calculation. Based on the score, each brand is assigned a [RCB World] corresponding rating up to AAA+ in a format similar to a Where a company has a purely mono- In order to determine the strength of a brand, we look at branded architecture, the ‘enterprise value’ credit rating. is the same as ‘branded business value’. Marketing Investment, Stakeholder Equity, and the impact Enterp of those on Business Performance. Analysing the three brand strength measures helps inform rise Va managers of a brand’s potential for future success. lue + Branded Business Value The value of a single branded business Bra operating under the subject brand. nded Bu si [RCB] A brand should be viewed in the context of Marketing Widely recognised factors deployed by marketers to create brand loyalty and ne ss the business in which it operates. Brand Investment market share. V a Finance always conducts a branded Bran lu d C e business valuation as part of any brand on tr valuation. We evaluate the full brand value ib u t chain in order to understand the links io n between marketing investment, brand- Stakeholder Perceptions of the brand among different stakeholder groups, with customers tracking data, and stakeholder behaviour. Equity being the most important. + Brand Contribution The overall uplift in shareholder value Brand Quantitative market and financial measures representing the success of the Value that the business derives from owning Business the brand rather than operating a Brand Strength Index Performance brand in achieving price and volume premium. [RCB] generic brand. The brand values contained in our league tables are those of the potentially transferable brand assets only, making ‘brand contribution’ a wider concept. An Marketing Investment assessment of overall ‘brand contribution’ to • A brand that has high Marketing Investment but low Stakeholder Equity may be on a path to growth. This high investment is likely to lead to future performance in Stakeholder a business provides additional insights to Equity which would in turn lead to better Business Performance in the future. help optimise performance. Investment • However, high Marketing Investment over an extended period with little improvement in Stakeholder Equity would imply that the brand is unable to shape customers’ preference. + Brand Value The value of the trade mark and Stakeholder Equity associated marketing IP within the • The same is true for Stakeholder Equity. If a company has high Stakeholder Equity, it is branded business. Equity likely that Business Performance will improve in the future. [RCB] • However, if the brand’s poor Business Performance persists, it would suggest that the Brand Finance helped to craft the brand is inefficient compared to its competitors in transferring stakeholder sentiment internationally recognised standard on to a volume or price premium. Brand Valuation – ISO 10668. It defines brand as a marketing-related intangible Performance Business Performance asset including, but not limited to, names, • Finally, if a brand has a strong Business Performance but scores poorly on Stakeholder terms, signs, symbols, logos, and designs, Equity, it would imply that, in the future, the brand’s ability to drive value will diminish.