IPL plagued with low ad rates

Despite being labelled as one of the most valuable sporting leagues in the world, monetisation continues to be a challenge for the Indian Premier League (IPL), according to a report by the valuation service provider D&P Advisory.

Ad rates for IPL are five to ten times lower than that of top premier sporting leagues such as Major League Baseball (MLB), English Premier League (EPL) and the National Football League (NFL), said the report.

It was a significant accomplishment for the Board of Control for Cricket in India (BCCI) when the broadcasting rights of the IPL fetched huge sums in the recent auctions. The BCCI sold the media rights of the next five-year cycle (2023-2027) of the league for a whopping ₹48,390 crore (₹143.34 crore per match).

On a per-match basis, the media rights auctions have made IPL the second most expensive league in the world ($15 million), surpassing major names such as EPL ($11 million).

However, the ad rates for a per ten-second slot for IPL is nearly 6 times lesser than the EPL, according to the D&P report. The gap widens further when IPL is compared to the NFL, whose ten-second ad slot is almost ten times more expensive than that of IPL.

“During IPL 2022, advertisers paid between ₹15-18 lakh ($20,000) for a 10-second slot. For digital, it ranged between ₹199-277 per CPM (cost per mille) for a slot ($3). These rates appeared to be significantly higher for playoff games and finals. In NFL, the average unit cost for a 10-second ad spot was $1,60,000 in the 2021-22 season,” the report noted.

The report observed that IPL’s advertising rates that are on the lower-end, even after considering purchasing power parity. The ad rates charged are a function of the monetisation potential of the viewers which in the case of IPL is largely the low to the middle-income population of India. The Hindu BusinessLine