Though the revenue earning capacity seems to have got a bit dented, Goyal still maintains that since IPL is the best possible window for festive sales, Star has the potential to make ad revenues of around Rs 2,500 crore, if the rate of infection from the virus stabilises and there are no further lockdowns.
The eagerly awaited Indian Premier League (IPL) is now slated to start from September 19 in the UAE, but closed-door matches with no stadium attendance are likely to hit revenues of official broadcaster Star India. Another factor which may dampen the revenues is the likelihood of Chinese brands keeping away from big-time advertising due to the geopolitical tensions. Earlier, 80% of the mobile advertising came from the Chinese brands which may choose to be quieter this year, Sandeep Goyal, chairman at Mogae Media, said.
Star India was earlier estimated to earn advertising revenues in the range of Rs 2,800-Rs 3,000 crore (when the matches were to start from March 29) but now may be able to rake in only around Rs 2,000 crore, senior media expert Anita Nayyar told FE. Star India had shelled out a whopping `16,347 crore to acquire the broadcasting rights.
Apart from absence of stadium attendance, the hit that businesses like beverages have taken due to the pandemic, is likely to keep their manufacturers away from becoming sponsors and may restrict themselves to spot buys. Further, Nayar said instead of premium, Star may have to resort to some amount of discounting to sell slots. Still, the broadcaster will try to reorganise packages to entice new clients that are not usually IPL spenders. The event will be an opportunity for new brands to advertise and translate them into sales. “The fact that IPL is happening is a big relief,” Nayyar added.
Though the revenue earning capacity seems to have got a bit dented, Goyal still maintains that since IPL is the best possible window for festive sales, Star has the potential to make ad revenues of around Rs 2,500 crore, if the rate of infection from the virus stabilises and there are no further lockdowns. “There are to be 60 matches over 44 days. So, at least 16 matches will be double headers. Normally, afternoon matches suffer but this time if work from home continues, audiences will watch the action,” Goyal said.
Experts said e-commerce and tech/digital companies are likely to be big advertisers, offsetting the adverse impact on ad revenues from traditional companies. “While automobile companies’ ability to spend may be limited, industries fairly cushioned against Covid will want to spend the extra money on IPL,” Santosh N, managing partner, Duff and Phelps India Advisory, said.
As far as franchises are concerned, they would incur revenue loss from ticket sales and on-ground activities like F&B. “A franchise typically earns around Rs 2 crore in ticket sales per match on an average while other on-ground revenues come in at around Rs 1-2 crore,” Santosh said. The bulk of franchises’ revenues are generated from their share of broadcasting rights.
Manish Desai, partner at Deloitte, had earlier told FE that in the event of the IPL being a closed-door affair, it may be estimated that approximately 10% of a franchisee owner’s total revenues are likely to get impacted. According to Duff & Phelps, the IPL ecosystem was estimated to be worth Rs 47,500 crore in 2019, registering a growth of 13.5% over 2018. As many as 462 million viewers watched the 12th edition of IPL on Star network channels last year, about 12% higher compared with the previous season, Barc data showed.