IPL stares at USD 1-billion value erosion on Covid-19 threat
Mar 20, 2020
MUMBAI: The prized BCCI cash-cow IPL may see a massive value erosion of USD 1 billion over its last year valuation if the game is called off this year due to the Covid-19 pandemic, says a report.
According to the global advisory firm Duff & Phelps, the brand Indian Premier League (season 12) was valued at USD 6.8 billion in 2019 and the same will see an erosion of USD 200-350 million if the BCCI goes in for a truncated tourney with empty galleries and USD 700-1,000 million if the season is cancelled.
The advisory agency as arrived at the numbers based on a two-scenario assessment of a truncated tourney with half the numbers of matches being played to empty galleries or no revenue from the gate sales and a complete washout of the 2020 season.
As of now, the BCCI has not taken a final call on the IPL season which is expected on April 15. If cancelled, India will not be the lone loser as dozens of much larger cash-flowing matches across the world have already been called off and the fate of the Tokyo Summer Olympics is hanging now. The last complete shuttering of sports events were during World War II when even the Olympics were called off.
"Overall, the IPL ecosystem will see value erosion of USD 200-350 million or 3-5 per cent if the BCCI goes for a truncated season. But the same would be much higher at 10-15 per cent or USD 700-1,000 million if the IPL season 13 is called off," says the report, adding "the analysis does not capture a financial recession like event that may further impact the IPL value."
The pandemic has seen that an unprecedented number of shutdowns of global sports leagues - while the last such shutdown was during World War-II when all major sporting events, including the Olympics in 1940 and 1944 were cancelled.
So far this year sports leagues including the EPL, La Liga, Seria A, the NBA, Champions League, and many a bilateral cricket tourney have been suspended till April as governments scramble to contain the spread of the pandemic.
The UEFA Euro 2020 and Copa America 2020, the two major football events scheduled for June have also been pushed to 2021. Even the Tokyo Olympics faces the threat of cancellation or postponement if the pandemic does not subside in the next couple of months.
Back home, the Indian Super League finals between ATK & Chennaiyin FC was played with empty galleries.