Cricket Business: CSK shares dip further in grey market as uncertainty on IPL 2020 continues

Cricket Business,IPL 2020,Chennai Super Kings,Sports Business,CSK

The sporting world is suffering from Coronavirus pandemic. The scheduled tournaments are getting cancelled or postponed indefinitely. The Indian cricket’s annual event Indian Premier League (IPL) is getting uncertain by the day. The players, BCCI and all the other stakeholders are staring at big loses but the most marquee team of the league, Chennai Super Kings has already feeling the pinch because of the uncertainty over IPL 2020 season.

Further erosion for CSK shares in grey market  

At the start of the year 2020, the shares for CSK were being traded at Rs. 30 in the grey market. The day it was announced that IPL 2020 is being suspended till 15th April 2020, the shares of CSK dipped to Rs. 24 according to a report published in Economic Times.

InsideSport.co is now gathering from its sources that the share value of CSK in the grey market has dipped further. The growing uncertainty is leading to dip in the values and as per the info available with InsideSport the shares are now being traded at Rs. 21 level per share in the grey market. It is worth noting that in year 2018 the shares of the team led by Mahender Singh Dhoni were traded at Rs. 13-14 price band @ a face value of 10 paisa.

Also Read: IPL 2020: Cummins willing to play IPL behind closed doors

Backed by extremely loyal fan base, CSK has been able to monetize its commercial assets much better than most of the other IPL teams. CSK’S revenues in 2019 stood at 418 Crore with a profit of 110 Crore. In 2018 had reported a loss of 52 crore for the same period. This had led to the increase in the share price and valuations of CSK. But the IPL 2020 uncertainty is hitting CSK hard.

Experts predicts value Erosion for Brand IPL and IPL teams

According to the 2019 IPL Brand Valuation report by Duffs and Phelps, IPL carried a valuation of Rs. 48,000 Crore (USD 6.8 Billion). Most of the teams including CSK improved its brand value. CSK was valued at 732 crores according to the report, increase of 13.1% from 647 crore. Mumbai Indians was the only IPL team ahead than CSK in brand valuation at 809 crores, up 8.5% from 746 crores in 2018

The industry experts believe that in case IPL 2020 gets cancelled, this valuation may take minimum 10 to 15% hit.

“We feel the situation is precarious for brand IPL and the franchises. IPL or its franchises does not have any other source of revenues than what they make through the 60-day season. All of its revenues are dependent on cricket being played. If the season does not happen, the balance sheets will have nothing to show. This will lead to erosion in the brand value of IPL and its biggest stakeholders i.e. franchises” say one of the brand valuation experts on the condition of anonymity.

Under the current circumstances it is unlikely IPL 2020 will start anytime soon. And the value erosion for brand IPL and the franchises is more or less certain.