IPL 2024 is rumored to be Former Indian Cricket Team Captain Mahendra Singh Dhoni’s last tournament as a cricketer, after which he will retire. It is said that to ease the transition next year, CSK named Ruturaj Gaikwad to be the captain for this IPL season.
Since 2007, when IPL was first launched, Dhoni has been the backbone of Chennai Super Kings (CSK). It is extremely evident that the team is synonymous with and loved by the fans because of MSD. That’s why the question remains: What will happen to CSK after Dhoni’s retirement? Especially for the investors, will CSK's unlisted share valuation decrease after Dhoni's retirement?
Let’s understand this closely.
How do IPL team owners make money? What is their revenue model?
IPL has a franchise system where the teams playing the tournament are owned and operate on a revenue-sharing model. IPL teams have various sources of income. They are:
- Sponsorship Deals with companies where team players also make ads, and add their logos to the team jerseys.
- Revenue Sharing: The Board of Control for Cricket in India (BCCI) sells viewership rights to broadcasters, and the revenue is shared between the BCCI and the franchises.
- Merchandise Sales: The franchises sell team jerseys, hats, and other accessories, contributing to their earnings. The popularity of the IPL has resulted in a significant demand for merchandise, and the franchises are cashing in on it.
- Player Auctions: Each year, before the start of the league, there is an auction where teams can buy players. The team owners bid for the players they want to include. The price of the players depends on their performance and popularity. The team owners can make a profit by selling the players they bought at a higher price than they paid.
- Player Endorsements: The players in the IPL are some of the most popular players in the world. They are highly sought after by brands for endorsements. The franchises can make a commission by arranging endorsements for their players. The more popular the player, the higher the endorsement fee, and this translates into more money for the franchises.
- Naming Rights: The IPL franchises can also sell the naming rights of their team to a sponsor. This has been a significant source of revenue for many IPL teams. For example, the Delhi Daredevils changed their name to Delhi Capitals after signing a deal with JSW Group. Kings XI Punjab changed its name to Punjab Kings after signing a deal with a digital entertainment company.
How will CSK Share Price move if Dhoni retires?
CSK is IPL’s second most valuable team following Mumbai Indians. It is closely followed by Shah Rukh Khan’s Kolkata Knight Riders.
CSK’s revenue saw a sharp turn in 2020 when MS Dhoni announced retirement from international cricket. In 2022, it saw a spike when MS Dhoni assured his fans that it was “definitely not” his last year playing.
Source: https://stockify.net.in/companies/chennai-super-kings-unlisted-shares/
However, the former Indian cricket team captain is 42 now, and speculations that this year will be his last are probably true. So, what effect will his retirement have on CSK?
- Dhoni’s play has always seen a huge viewership spike in IPL. For example: In one of the most awaited matches of IPL, between MI and CSK, attracted 6.3 crore concurrent viewers on TV during MS Dhoni’s batting (20 runs off 4 balls). Similar spikes have always been recorded whenever MSD comes to bat. This 6.3cr viewership has also been the highest concurrency for any league game across the current and previous seasons. If Dhoni were to retire, the revenue from the viewership would drop drastically.
- Dhoni has been a huge draw for sponsors due to his immense popularity and on-field success. Dhoni endorses brands such as Lay’s, WinZo, Indigo Paints, Gulf Oil, Orient Electric, Asian Footwear, etc. A few of these brands have sponsored CSK because of Dhoni’s “dependability”. Given Dhoni’s retirement, CSK should expect a drop in sponsorship deals as well.
- Fans often purchase jerseys, caps, and other merchandise featuring Dhoni's name and number. For example, after Dhoni's retirement from international cricket, there was a noticeable decline in sales of merchandise featuring his name and number. CSK may need to focus on promoting other star players or innovative marketing strategies to maintain merchandise revenue.
These are a few of the most immediate effects that CSK should expect after Dhoni’s retirement. So, it is pretty evident that CSK should expect a drop in CSK stock price in unlisted markets.
But overall, if CSK can make a good marquee of cricketers that can replace the Dhoni void, and win IPL this season, then CSK unlisted shares should rise even this year. CSK has been one of the top performers this season, which is why fans are expecting to see them in the finals this year as well. This is one of the reasons why there has been active movement in csk unlisted share price in Stockify since IPL started.
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