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IPL 2020: The IPL faces short-term brand value erosion but recovery on cards

The IPL faces short-term brand value erosion but recovery on cards. The Covid 19 induced economic slowdown too will affect some sponsorship deals

Bengaluru, June 15: The IPL 2020 is facing some uncertain times after getting postponed due to the Coronavirus pandemic. Though the BCCI has been trying actively to find a window for the IPL 13, a final decision still looks far considering the global health scenario.

But amidst this turbulence, the IPL also faces some economical hurdles. The industry insiders believe that the value of IPL, which has increased double in the last five years, might see an erosion even to the tune of USD 1 billion this year if the tournament does not take place.

"This is a reality. It is inevitable that that business entities will take a hit this year. The IPL is no different. It is a big money spinner and could see an erosion in the value this year," a financial expert from Geojit told MyKhel.

But will the IPL recover from the blow and slowness induced by the pandemic? "Yes. As a business model the IPL has strong base and it is in existence from 2008. The value of the product has only gone up over the years. It has the capability to regain the lost ground. Even now, the IPL is the best platform for a product launch in India as you had seen it in the past. It is getting aired at the prime time where viewership is at its optimum and it is the right time to make people familiar with either new products or new brands," he said.

Manoj Badale, the Rajasthan Royals owner, expressed similar sentiments. "No question you are going to see short term sponsor and advertiser pressure. The IPL 2020, whenever it takes place, will face some heat from the advertising sector," he told Scoreboard. However, he had little doubt that the Brand IPL will continue to grow.

"If you want to launch a brand or a new product in India, there is no better advertising platform than the IPL, the growth of brand IPL will continue," said Badale.

"There is no immediate threat to IPL as a brand as the title sponsor, team-wise sponsors are on board and even the broadcasting agreements are in place for the next few years. It is a strong, familiar brand that everyone wishes to get associated with. I don't see any change in that trend. But yes, the economic slowdown will have an impact and perhaps one or two brands may go out of the tent but there is nothing that the IPL cannot survive at the moment," said another industry insider.

"Of course, if the IPL 2020 gets cancelled because of the pandemic then the net value might see small dip but that is true with any business model. We have seen some of the big corporate houses adopting cost-cutting measures to stay afloat and with right kind of measures I am sure IPL too will overcome this face," he said.

The official said if the IPL 2020 indeed takes place this year, then the brand image will get a boost and with sporting activities at a bare minimum this year, the tournament will attract even larger viewership.

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Story first published: Monday, June 15, 2020, 15:39 [IST]
Other articles published on Jun 15, 2020
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