Indian Premier League chairman Lalit Modi's outing Sunday off the stakeholding in the Kochi franchise on microblogging site Twitter, which has snowballed into a raging controversy - one which involves lack of transparency and conflict of interest - could well take a toll on the brand IPL if the BCCI does not take corrective measures.

According to a valuation conducted by Brand Finance ahead of this season's tournament, the IPL brand had achieved a phenomenal valuation of $ 4 billion within less than three years of its coming into being.

However, the present controversy, still spinning further afield of anything Modi could have possible imagined when he first tweeted his "concerns" over the make-up of Rendezvous Sports, which owns the Kochi franchise, will take a toll on the brand value of IPL and its franchises as well, reckons Brand Finance India MD Unni Krishnan.

Discussing the issue he explained, “In our report we had explicitly stated two months back that IPL and the IPL branded eco system are heading rapidly towards an inflection point and we said that the inflection is a moment of great opportunity as well as a moment of great risk to the IPL. The reason is that simply because of four-five key factors that the risk is increasing on a day-to-day basis almost - which is that there is complete lack of transparency, governance mechanisms, alignment of stakeholders for long-term value and system procedures to put those things into place.”

Krishnan feels that the controversy is the first sign of those risks running out of control and these risks could well cause fracture in value, “We have been observing these things from the outside. If this is anything is to go by, this controversy is the first sign of danger that the risk is slowly becoming uncontrolled. Accelerating value creation will depend on whether the systemic risks which are in the IPL are brought under control. We don’t see any tangible evidence that these risks are being controlled and due to which there is a possibility of fracture in value going forward,” he affirmed.

However, Krishnan feels that the IPL governing council needs to intervene in the matter. “The governing council needs to take radical steps to bring these risks under control that will prevent any fracture or sudden fracture in value of IPL going forward. This is just the first wind of controversy. Maybe many more are likely to blow and this just the beginning of the opening of the Pandora’s Box.”

Another senior media agency executive who did not wished to be quoted agreed that the brand IPL could well be affected due to the recent controversy, “It would definitely impact because all kinds of allegations are being made. Whether right or wrong it will impact the brand IPL,” the executive stated.

The executive believes that the question of whether franchises takes a hit or not depends upon on the outcome of the controversy, “It’s too early to comment on that, it depends on what the outcome of the controversy is.”

Krishnan on the other hand believes that the franchises would take a hit because IPL is the mother brand. “Indeed, if the mother brand gets destroyed the franchise brands will also take a hit. Perhaps, they will take a greater hit.”

So how will they take a hit? To this Krishnan explains, “There are two sets of brands that are involved in this. We have the IPL brand, which is the umbrella brand and we have the franchise brands, which are deriving their strength from the IPL brand. If the IPL brand gets damaged because of the size of revenues that they have embarked upon, there will be financial resources in reserves to hold it together going forward in the short term but no such luxury is available to any of the franchises, who are anyway struggling for oxygen (not making profits).”

Intangible Business director Richard Yoxon offers a far more hopeful outlook though, and believes that the brand IPL is too big to take a significant hit. It will be the reputations of the central characters in this sordid saga - IPL commissioner Lalit Modi and external affairs minister Shashi Tharoor - that would be more damaged, Yoxon feels. Intangible Business had also carried a brand valuation excercise of the IPL and its franchises last year .

Yoxon said: “My perception from the UK is that this unsavory dispute will damage the reputations of the individuals involved rather than the IPL. It appears that both parties could have handled the situation more graciously rather than engaging in a public bout of mudslinging. Until the truth comes out and the dust settles we will not know who is most at fault and the extent of the damage caused.

"The IPL brand is bigger than any individual, even the charismatic Lalit Modi.”

Will this controversy also affect the brands sponsoring IPL? "Unlikely, but it will depend on how the truth unfolds," says Yoxon. As for the franchises, Yoxon says, "Doubt it will affect the existing franchises. The Kochi franchise will probably be affected depending on how the dust settles."

Lodestar Universal chairman Shashi Sinha too feels that brand IPL will weather the storm and people would forget the controversy in some time, “I don’t think it will affect brand IPL. People watch the game and entertainment there. This is outside that. People will forget what happened. So this external factor won’t change that (brand value),” Sinha states.