Mumbai, Maharashtra, India
American Appraisal has come out with a concise report on brand values in the Indian Premier League (IPL). The report is based on a survey of 300 key participants of the IPL ecosystem – team managements, sponsors, advertisers, advertising agencies and broadcasters.
The report incorporates a thorough analysis of the entire stream of cash flows available to franchises, and breaks it down into two parts – those cash flows that are attributable to brand strength (team sponsorship, merchandising, etc.) and those that are not brand related (share of central pool sponsorship, broadcasting, etc.). Brand value has been estimated only on the basis of the cash flows that are attributable to brand strength.
Chennai Super Kings and Mumbai Indians have emerged as the most powerful brands (valued at USD 72 million each) with Kolkata Knight Riders following closely behind (at USD 69 million). Royal Challengers Bangalore (USD 51 million), Rajasthan Royals (USD 45 million) and Delhi Daredevils (USD 40 million) are in the middle, with Kings XI Punjab (USD 32 million) and Sunrisers Hyderabad (USD 25 million) at the bottom of the barrel.
The report highlights the increasing importance of merchandising in the growth and realization of brand value of the franchises. It draws the readers’ attention towards the huge difference between the merchandizing markets for say, the La Liga of Spain (USD 2 billion) versus the IPL (USD 40 million). In other words, despite a population that is 25 times larger, and an economy that is at least 25% larger (and growing much faster), India’s IPL is only 2% of Spain’s La Liga. Clearly, there is massive potential for growing the merchandizing market.
American Appraisal expects the franchises to come out with innovative business models over the next few years to monetize this massive opportunity. Accordingly, it expects the merchandizing market to grow ten-fold by 2020, from USD 40 million to USD 400 million.
In terms of the survey results, the report claims that according to most respondents, the popularity of the IPL has either increased or stayed the same over the last 6 years. Advertisers and sponsors continue to want to associate with the IPL, with 57% respondents claiming to have increased their advertising spend on the IPL over the last six years.
Also, highlighting the sheer importance of IPL as a platform for advertisers to reach out to their target customers, as many as 57% of the respondents mentioned that they spend 2-10% of their annual advertising budget on the IPL.
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