The real will be valued less and the virtual will be valued more. What kind of a statement is that? I guess I am making a harsh statement about the times we live in. We are living through ‘Kalyuga’, hopefully its last few decades. It’s an age where impressions matter more than fact. That is the truth. And perception is more important. Can this be denied?
I work in the realm of brands and brand-valuation today is a science all on its own. The brand, for a start, is a perception. One that is created and nurtured to fruition. It begins as a small seed of thought that is strengthened year on year. That small seed grows into a mighty tree. A brand-tree that gives birth to more and more thoughts.
Is all this sounding a bit too surreal? Let me bring it back to our real lives and go straight to that one piece of virtual-estate created exactly 19 years ago—the Indian Premier League. This is the crown jewel of the Indian cricket board and, today, represents a startup ecosystem of its own. One that has a standalone brand value of $3.9 billion, with each team commanding significant a valuation of its own. In 2025, the total business valuation of the IPL reportedly reached $18.5 billion. That’s eighteen-and-a-half unicorns in startup language. IPL’s first season commenced in 2008 and it has taken all these years to cobble together this $18-billion valuation. A billion a year. Not bad at all.
The IPL is therefore this brand, a thought and a valuation. A piece of virtual-estate that today captures the imagination of literally every Indian (at least 51.5 crore living in India). The IPL is a physical sport that comes alive for 9 weeks in a year and is a virtual brand that captivates the imagination of the cricket lover all year round. And somewhere in the imagination of its fans lies its valuation.
Just about two weeks ago, two of the IPL franchises announced a proposed sale. Royal Challengers Bengaluru (RCB) and Rajasthan Royals (RR) announced the first monetisation of an IPL franchise. What was till today only the thought of a valuation is a reality. The RCB cobbled together for its owners $1.78 billion, while RR brought in $1.63 billion. The going price for an IPL franchise has all of a sudden hit the $1.7 billion level. Imagine then the collective enterprise value of all teams put together.
Vijay Mallya bought the RCB franchise in 2008 at $112 million. Diageo, its current owner, sold it at $1.78 billion. In 18 years, this investment has a return multiple of nearly 16. Such is the dizzying value of IPL, its franchise and the collective imagination of the spectators of this sport. The entire Indian cricket ecosystem of the cricket board, the individual franchisees, broadcasters, sponsors, stadiums and venue managements, digital partners and six more involved entities are excited. Very excited. The IPL has hit top-dollar valuations for now.
What is this valuation all about then? And how is it done at all? As someone involved in the valuation of some of the teams every now and then (managements keep assessing their real value), let me put it simply. A team is only as valuable as its fans think it to be. My ethos of valuing a team is totally based on the end-consumer of the league: the fan. Valuation can either be done top-down or bottom-up. You can do both as well, and conveniently pick any of the valuation numbers or arrive at a negotiated average. Valuation top-down is what all the intelligent people in team-management think is the value of their team. It is investment led. How much have I spent on the team to date? What is the size of the fan base? How do global teams benchmark their value basis investment? What must my value be?
Valuation bottom-up, though, is a different process altogether. This is the terrain of hard work. This is the terrain of fandom research. This is a space that looks at numbers a wee bit differently. It looks at the number of fans of the team in a slightly more granular manner. We use a total of 11 different methods to arrive at a bottom-up valuation of an IPL team. I will mention just one as an illustration.
I make three pyramids for IPL teams and their fans. Pyramid One is the fandom in India. This is the prime kingdom of the team at large. Pyramid Two is the diaspora audience that is passionate about a team. A guy from Patiala living in Ottawa is at times more passionate about the Punjab Kings than a guy living in Patiala itself. Pyramid Three is the non-Indian audience all across the world.
Remember, IPL is watched in many countries today and non-Indians like to track their cricketers as they sweat in the scorching Indian summer. The largest of these pyramids, needless to state, is the Indian Pyramid One (69 in size). The second largest is the diaspora Pyramid Two (30 in size) and the smallest is the non-indian Pyramid Three (one in size). Remember, this is just gross-sizing of the market and dividing it into three pyramids of the audience by numbers. One needs to then check the sizes of the audience across the top-of-the-pyramid, the middle-of-the-pyramid and the bottom-of-the-pyramid in each.
Suddenly, these numbers reveal monetise-able valuation ‘truths’ across the various pyramids. In terms of sheer money-flow to teams and to the entire IPL enterprise itself, it is quite likely that top-of-the-pyramid and the middle-of-the-pyramid audiences are the only true-blue money-contributor audience segments today as opposed to the noise and bluster of the bottom-of-the-pyramid fandom of the IPL team in question.
Valuation numbers are then pegged on the basis of what is being monetised today, what can be monetised tomorrow and what will never be monetised into the medium-term future. The key questions to ask: Who is my audience? What is their spend-value in the consumer market today? What is my brand-chemistry with this key audience? How is my fan relationship? Is it transactional? Or is it a real relationship?
That then is a peek into the science of brand valuation. Just one tool of the 11 we use. Would not want to bore you with the other ten for now. Am sure you will agree.
Harish Bijoor | Brand guru and Founder, Harish Bijoor Consults Inc
(Views are personal)
(harishbijoor@hotmail.com)