A Billion Dollar Baby!

IPL is now a 4 billion dollar brand. Two new franchisees are brought for nearly 700 million dollars. IPL earns 3 million dollar per match. There is never ending media reporting on IPL from quite some time, you just can’t avoid it. Where is this mania marching to? How realistic are valuations and hype around IPL? Who is winning and who is losing? What does it mean for a growing economy like ours?

Indians are crazy about cricket. We eat, drink and sleep cricket. IPL is just a revelation. There is Cricket and Bollywood, staple diet of Indians. It’s a win-win proposition for everyone. IPL is bound to swell disproportionately. The big question is that how far and how long this is going to last? To answer this, we need to look at real bottom line, i.e. fan following. Yes this is what dictates revenues and valuations of top sporting leagues of the world. With the time, every franchisee is adding fans day by day. Also, with time, fans are getting more and more loyal to their home team which is a healthy sign. Current valuations are certainly way beyond any financial estimates which got to show that these associations with IPL are beyond numbers. Big business houses value IPL as a long term fast growing investment. Who’s winning? Sponsors are getting high visibility. Cricketers are getting paid handsomely. IPL and franchisees are at the centre of the storm, riding on high popularity of the business model and fan following. People see it as a rather cheap and unlimited source of entertainment. Cricket commentators, coaches, staff, media is just riding on the success story to get their share out. But, what does it mean for Indian economy? Are we going to see a big impact on actual GDP? Well, there has been some preliminary estimation done on this. IPL is still at a budding stage. There is already a lot of expenditure done in entertainment, food & beverage, travel & tourism and other miscellaneous services industries which will proliferate these sectors. Slowly, IPL is engulfing few other industries and services. Above all, there is general upbeat in the mood of investors and consumers. I believe that we are definitely going to see an upward GDP shift impact of IPL as the time progresses.