Million dollar mismatch: Why high IPL auction prices don't guarantee big brand deals

The IPL auctions are abuzz with Shreyas Iyer securing Rs 26.75 crore. But Rishabh Pant's brand value surpasses Iyer's, while Virat Kohli, who was retained, holds the highest brand value. This highlights the complex dynamics between auction prices and brand value.

“The brand endorsement value of Rishabh Pant, who became the most expensive player in IPL history, is expected to increase by at least 30% to 40% after his record IPL price tag of Rs 27 crore. Also, Pant is likely to see his endorsement fees zoom in the next six to 12 months,” said a source closer to BestMediaInfo.com. 

To add, “Pant’s brand value is estimated to be $15 - $17 million,” the source added. 

Currently, Pant endorses more than 15 brands, including Thums Up and Dream11, and the number of brands sponsoring him is only set to increase.

So, how do IPL auction prices impact the brand value of athletes?

Weighing in on the discussion, Abhishek Tiwari, Global Business Head, NetSetGo Media said,  “An athlete who secures a high price in an auction can experience a temporary increase of about 20%-30% in the value of their brand deals. However, a sustained increase in brand value depends on the player's performance during the season and their ability to maintain a positive public image.

While such high figures bidding for an athlete may capture the attention and interest of brands it does not reflect the worth of the brand itself. This is because brands are qualitative and quantitative. Brands are concerned with enduring factors such as level of consistency, perception, and reach. Off-field attraction of the athlete is not considered in the auction price which is often more based on franchise requirements and the team aspects of the athlete.”

Deleise Ross, Senior Vice President, Mudramax, is of the view that athletes’ performance in the earlier games is what drives their popularity. 

“This is irrespective of the cost being paid for them during actions. Brands normally associate with brands that stand for their brand values and propositions. Thus, proving that they may not splurge just basis auctions,” she said.

According to the Brand Endorser Report 2024 released by Hansa Research last week, Virat Kohli takes the top spot as the No. 1 celebrity, followed by MS Dhoni in second place and Sachin Tendulkar in third. These cricket legends have outperformed some of the biggest names in Bollywood, including Shah Rukh Khan (4th), Akshay Kumar (5th), Amitabh Bachchan (6th), and Salman Khan (8th). 

Harikrishnan Pillai, CEO, and Co-Founder, TheSmallBigIdea, said, “It is important to understand that the IPL auction prices are determined by the team's need, and the player's prowess on the field. However, there are also brand-level decisions that might pip the pricing. Some players tend to have a positive brand rub-off on the team at large.

Virat Kohli’s unmatched brand value and enduring relevance make him a top choice for brands.

Brands look at emerging players very differently they would look at a player like Shreyas Iyer to grow with stature, as a long-term investment.”

Talking about how brands prioritise one cricketer over the other, Ross of Mudramax said, “Each of them has a different audience base to cater to. For example, Kohli has a massive fan following, is seasoned and consistent. And is perceived as a leadership persona, be it his discipline or resilience. He is best suited for brands which stand for lifestyle & fitness. This also helps cut through various age groups and majorly to reach out to the masses. On the other hand, Iyer is an emerging talent and is a stylish persona. This suits best for youth-centric products, emerging startups and fresh fashion brands.”

Pillai of TheSmallBigIdea said, “Players like Shubman Gill and Rishabh Pant exemplify the intersection of talent and marketability, with their rising prominence in cricket naturally boosting their brand value. For brands, such players represent a compelling mix of performance and persona, making them highly attractive. On the other hand, not all players commanding high IPL auction prices may secure fabulous endorsements, because their appeal might be more niche.”

So, do high prices in auctions mean nothing for brand deals?

Sharing his thoughts, Tiwari said, “High auction prices can create interest from brands in the short term but follow with disappointments as other partners tend to look at such metrics. Brands tend to take a broader perspective where they look at the consistency of the performance, engagement, and persona. Auction dynamics are relatively less important in such scenarios.

It all depends on who the brands want to target. Virat Kohli has proven to be a better brand even when he has not put himself for auction. This is so because in the auction win or lose this famous brand is always performing, has millions of fans, and has a strong brand identity. Shreyas Iyer may have been purchased at higher crores, however, he has more offers from companies that are trying to market to a younger audience. He is also the perfect brand throughout the process of his career.”

Although higher auction prices indicate greater brand interest, they do not always ensure a better brand fit. The dynamics of auctions and the athlete's popularity both play roles, but a high price tag alone doesn't guarantee a successful brand partnership. 

According to Tiwari, “There are some cases in the past where athletic performance is being underperformed despite the high price put on the auction causing no success on the field and the brand having a low return on investment. The effectiveness of such investments can be further eroded by a lack of continued impact and disconnect with target audiences. 

IPL auction fees allow both the fans and the athlete to enjoy a short-term boost in recognition; however, brands need to remember that one’s overall consistency, marketability, and ability to connect with the fans is what drives effective returns on investment in the long-term.”