IPL could see rev loss of upto $1000 mn due to COVID19

The loss depends on a truncated IPL with fewer matches or complete cancellation

MUMBAI: The postponement of Indian Premier League due to coronavirus pandemic will lead to a confirm loss in terms of revenue under two scenarios, according to a prediction by Duff and Phelps. In order to stop the spread of the virus in India, the BCCI has suspended IPL till 15 April.

Duff & Phelps, a global advisor that helps clients protect, restore and maximise value, has undertaken a study to analyse the impact of COVID19 on the value of the IPL ecosystem. In its report IPL Brand Valuation Report 2019, it has considered two scenarios: 1) Truncated IPL with the number of matches reduced to half, a high possibility as per BCCI; 2) The entire IPL 13 season getting cancelled.

The report says, “Under scenario one, the IPL ecosystem value estimated by the Duff and Phelps last year is expected to reduce by $200-350 million range (3-5 per cent). Whereas, in the second scenario IPL ecosystem value to reduce by $700-1,000 million range (around 10-15 per cent).”

The global advisor on brand value says, “Our impact analysis has been carried out on the IPL ecosystem value calculated by Duff & Phelps last year, which was $6.8 billion in 2019. The analysis doesn’t reflect the current value of the IPL ecosystem, which would have been estimated after considering the factors available post completion of IPL 2020.”

The report citing the first scenario says, “According to BCCI officials, in case the IPL season commences on 15 April, it will be truncated as more than 15 days would have been lost by that time. It predicted that in a truncated season, each team will play against the other only once, instead of the home & away format, thus reducing the number of league matches by half.”

The report further adds, “Scenario one also gives two possibilities: one where the spectators are allowed inside the stadium and another where the matches are played behind closed doors, effectively impacting the in-stadia revenues including gate receipts and food and beverages.”

“The second possibility in the first scenario is that it will have a negligible impact on IPL in terms of revenue, giving an upper hand to the official broadcaster. However, none of the stakeholders including the broadcasters prefer this option,” mentions the report. It further factors that the loss of revenue under this scenario will be low, as broadcast partners and sponsors will renegotiate the contracts based on the number of matches being played.

Under the second scenario, Duff and Phelps have assumed the possibility of the entire IPL 13 getting cancelled, a high possibility if the current situation persists. This scenario will have a massive impact on the IPL ecosystem value, considering larger economic and financial consequences.

The second scenario will also an economic impact due to the one year set back, where the global advisor anticipated that the sponsorship revenues might not grow at desired levels next year due to the current disruption.

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