On April 14, according to the United Nations, India's population may reach 1.425 billion on this day, officially surpassing China to become the world's most populous country.
In the context of becoming the most populous country, India's national sports league, the Indian Premier League (hereinafter referred to as "IPL"), has also become the second most valuable event in the world. As a rough estimate, IPL's revenue far exceeds the sum of the revenue of the Super League and CBA, and the overall revenue of the latter two is not even half of the copyright price of the former.
So, why does IPL have so much business value and brand value? It is said that its overall revenue crushes whether the Super League + CBA has corresponding data support.
How did IPL explode?
Cricket is the ancestor of baseball, which originated in England in the 13th century, first as an aristocratic sport, and later spread to the world with the colonial movement. In the Commonwealth countries, cricket is very popular, and in India, which has a large population, it has finally become the first sport for the whole people.
According to consultancy YouGov seven years ago, 85% of India's 1.3 billion people follow cricket, and 750 million people play cricket at least four times a year, including 400 million die-hard fans. This level of participation is much crazier than table tennis on the mainland, football in the United States, and baseball in Japan.
Despite its strong base, it was 2008 that cricket established a professional league in India. For a long time, traditional cricket has been known for its many rounds and long schedules, and a match often has to be played for 6 hours a day for 5 consecutive days to determine the winner. As a result, the Indian Cricket Board (BCCI) streamlined the format and adopted the 2020 rule, which limits the number of pitching rounds to 120 balls in 20 rounds, regardless of whether ten players are out, and the game ends after 20 rounds. As a result, the race time was reduced to 3 hours. In addition, BCCI followed the NBA's example by franchising participating teams. In 2008, after three months of public auction of participating teams, the first Indian Premier League was officially launched, with 8 teams, 2 months and 60 matches, which is a bit shabby compared to the old professional leagues.
However, IPL went into run wild mode as soon as it was born. In its first year of league, Sony won the ten-year global television rights from 2008 to 2017 for 82 billion rupees ($1.27 billion). The main sponsor of the league is Delhi Property & Finance, whose title cost from 2008 to 2012 was 400 million rupees (about $6.21 million) a year.
The IPL quickly caught the attention of hundreds of millions of cricket fans, with more than 60,000 fans watching the inaugural season finals live and around 3 billion people worldwide watching on television. With so many fans, the value of the IPL brand soared, and in 2010, Brand Finance, a British brand consulting firm, valued the IPL brand to $4.13 billion, surpassing the NBA, the Olympic Games and the World Cup, and second only to the NFL.
In 2015, Novi Digital acquired the 3-year digital rights for 3022 million rupees ($47 million). According to BCCI, IPL TV viewers surpassed 100 million in 2016, making it one of the most watched leagues in the world. Forbes magazine ranked the IPL as the hottest league in the world. The first contract for television rights expired and the price more than doubled. In the five-year global broadcast rights auction from 2018 to 2022, more than 24 companies from around the world participated in the bidding, and 21st Century Fox's Star India won with a whopping 16,3475 crore rupees (about US$2.55 billion). In June 2022, its broadcast rights from 2023 to 2027 were sold for Rs 483.9 billion ($6.1 billion), with an average copyright price of $1.2 billion per season.
Chinese companies send "divine assistance"
On March 31, the IPL season of 2023 kicked off. The Chinese mobile phone brand, which is in a mess in India, is no longer its title sponsor, but there is still no lack of Chinese companies inside and outside the arena.
Although India is still a low-income country, the huge mass base still allows the Indian Premier League to quickly rush to the top of the world, and from March to May every year, countless cricket fans go crazy and even stampede to grab tickets. Global capital has entered the game, and even Internet bigwigs like Facebook have lost in the high copyright bid.
Chinese companies have become the most beautiful cubs. At the historical node where smartphones gradually replaced feature phones, vivo ran all the way, they began to layout overseas markets in 2014, and grabbed the title seat of IPL in 2016. After PepsiCo's three-year contract expired, Vivo, a mobile phone brand from China, became the title sponsor of IPL for the 2016 and 2017 seasons, with sponsorships of 1 billion rupees ($15.53 million) a year, $3.2 million more. After the two-year contract expired, Vivo doubled to renew it, and in the 2018, 2019 and 2021 seasons, Vivo quadrupled its annual title amount to a staggering 4.4 billion rupees (about US$68.3 million).
In between Vivo's five-year sponsorship of the IPL, it was joined by Indian game company Dream11, which became the title sponsor of the IPL in 2020. Dream11 is inseparable from the shadow of Chinese capital, and Tencent is its major shareholder, which led Dream11's $100 million Series D financing in 2018.
Interestingly, in IPL's title auction in those years, vivo's number one competitor was none other than OPPO, a smartphone brand that also came from China. Failing to conquer the IPL super-IPL, OPPO defeated vivo in another cricket battlefield, and they became sponsors of the Indian national cricket team on a five-year, $150 million contract, and the equipment and jerseys of the Indian cricket men's, women's and youth teams are printed with the OPPO logo.
Chinese mobile phone brands staged a "Chinese derby" in the Indian cricket marketing arena, and their huge investment has paid off, vivo once occupied 10% of the Indian market, ranked second in India, and OPPO's market share is also about 8%. Given India's huge population base, they are making a lot of money.
In addition, TCL, a home appliance brand from China, has also been eyeing Indian cricket. In addition to its long-term sponsorship of the Chinese men's basketball team, TCL also sponsored the Indian cricket team in 2019, a marketing act that made them famous and rich, and TCL color TV sales in India that year increased by 151% year-on-year, and the total sales entered the top five in India. After tasting the sweetness, TCL entered the IPL league the following year and became a sponsor of 2016 champion Chaoyang Hyderabad. When Bhuvneshwar Kumar, the team's number one star, national team member and social media fans over 100 million, appeared at the press conference wearing a jersey with the TCL logo, it immediately caused a sensation throughout India.
For the 2023 season, TCL remains one of the sponsors of Chaoyang Hyderabad. The names of Chinese mobile phone brands are missing from the sidelines and stands, but the bright red color TV logo still shines on the arms of the players.
Indian Premier League revenue crushes Chinese Super League + CBA
If you compare the revenue of IPL with the Chinese Super League and CBA, you will find that the gap between the two sides is getting bigger and bigger. The combined revenue of the Chinese Super League and CBA is also difficult to match.
In 2015 and 2016, IPL's revenue has exceeded 10 billion yuan. Relevant media disclosed that its revenue in 2016 was 6 times that of the Chinese Super League that season. You know, at that time, IPL's copyright fee was 47 million US dollars (about 330 million yuan), and the Chinese Super League was in the golden yuan era, and the copyright fee for a season was as high as 1.6 billion yuan.
Today, IPL's royalties have reached a staggering $1.2 billion a season, while the Chinese Super League's royalties have fallen back to about 100 million yuan. IPL's royalty income alone exceeded 8 billion RMB. Combined with commercial sponsorship and team revenue (including ticket revenue), its revenue is estimated to be far more than 20 billion yuan.
Let's look at the revenue of the Chinese Super League and CBA League. The "White Paper on the Commercial Value of the Chinese Super League in the 2020 Season" released by the official Chinese Super League and Deloitte revealed that the sponsorship amount of the Chinese Super League that season was 308 million yuan. The copyright fee for that season was about 110 million yuan, and at that time, in addition to Tencent Sports, Zhiqiu also obtained the live broadcast rights of 4 games per round.
Considering the impact of the epidemic, China Super has been empty for most of the last three seasons, which does not accurately reflect the revenue of the Chinese Super League. We use the 2023 season as a model for our estimates. In the new season, the sponsors of the Chinese Super League have shrunk to a certain extent, with Mengniu, DHL, SAIC, Baisuishan, and new Yibao and Chevron lubricants added. The overall sponsorship amount of less than 300 million yuan should be expected.
In terms of copyright, Tencent Sports' three-year contract with the Chinese Super League has entered its final year, with an amount of about 90 million. Since no new players have entered the game, Tencent Sports substantially enjoys the exclusive copyright of new media in a non-exclusive capacity. CCTV Sports and local stations still broadcast corresponding performances, and the copyright fees they paid are estimated at 20 million yuan, and the copyright of the Chinese Super League is still maintained at around 110 million yuan.
Revenue at the club level is based on Guoan, which is the most optimistic about business operations and ticket revenue. After JD.com becomes its chest advertising sponsor, Guoan's new season business revenue is likely to exceed 70 million, and ticket revenue may be close to 50 million. With full calculation, Guoan's revenue in the new season may exceed 120 million. This is already the ceiling of the revenue of the all-league club, and I am afraid that only Shenhua can compete with Guoan. The other 14 teams are estimated at an average of 60 million (which is already ideal because most clubs do not have chest sponsors), plus Guoan and Shenhua (each estimated at 120 million), the club's overall revenue can reach 1.08 billion under the ideal situation. This means that the ceiling of the Chinese Super League's revenue is approaching 1.5 billion yuan (excluding the club's share of the Super League, which is included in the Super League's revenue).
The situation in the CBA is more optimistic than in the Chinese Super League. This is evident in the club's revenue share. Nanjing Tongxi is a listed company, and according to the data disclosed in its financial report, Tongxi Club received nearly 30 million dividends from CBA companies in the 21-22 season. Considering that Tongxi was at the bottom of the league in previous seasons, 20 clubs received dividends from the league conservatively 600 million.
Based on the information disclosed by various media, the title sponsorship fee of Chinese Life is 350 million yuan / year (the "sports big business" estimates the cooperation cycle of the 2017-20 season), and the official strategic partner Li Ning's sponsorship amount is 200 million / year (including physical equipment, estimated according to 100 million cash). The overall cost of China Mobile and its Migu is about 300 million yuan (including 250 million yuan in copyright fees, 35 million yuan per year as an official partner of China Mobile, and 15 million yuan per year as an official sponsor of Migu Coffee, and the data is also derived from "sports business").
"Sports Big Business" also disclosed that the entry threshold for CBA official partner levels may start at 30 million yuan per year, with a floating range of 30-40 million yuan per year, while the entry threshold for official sponsors may start at 15 million or 20 million, and the official supplier is 10 million yuan (goods or services offset most of the sponsorship). In addition to China Mobile, CBA has 9 official partners; In addition to Migu Coffee, CBA has 4 official sponsors. Considering the impact of the epidemic, schedule and other aspects, the minimum income of official partners (not counting China Mobile) + official sponsors (not counting Migu Coffee) is still more than 200 million yuan. Coupled with the official announcement of the total revenue of CBA licensed goods of 34.48 million, the overall revenue of CBA last season may reach 980 million.
On the club side, due to the conference system for the past three years, we use the revenue of the 2019 season as the estimated standard. Nanjing Tongxi's revenue in 2019 was 57.9 million yuan, of which 33 million yuan was received from CBA Company, and the remaining income was close to 25 million. This is obviously the lowest value of club revenue, and we estimate that the revenue of the 20 CBA clubs is about 1 billion yuan based on the average of 50 million. In a relatively optimistic scenario, CBA's overall revenue next season may be close to 2 billion.
The above estimates do not take into account the significant decline in the amount of sponsors, the arrears of some sponsors, and the fact that most of the sponsorships are offset in kind, and the relatively optimistic forecast for the market is already the most ideal model. In other words, the ceiling of the current revenue of Super League + CBA is 3.5 billion yuan, which is not even half of the IPL copyright fee.
This is the reality facing Chinese sports IP. They really can't be compared to the IPL, which has long since become a golden event.