Indian Premier League is the biggest T20 cricket league in the world. When IPL had started in 2008, none could have thought that the tournament will end up growing to this extent. The biggest players in the cricketing world crave to play in the tournament. Just to get picked in the auction is a big thing for many overseas cricketers.
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Not just the biggest, but IPL is the richest league as well. It has to be admitted that the financial aspect of the IPL plays a huge part in attracting overseas players. Recently, we saw how the players skipped the Big Bash League in Australia to take part in ILT20 in the UAE and SA20 in South Africa due to the higher pay scale.
Former Indian captain MS Dhoni was the most expensive player of the IPL 2008 auction. Dhoni was bought for a price of INR 9.5 crores that season. England all-rounder Sam Curran became the most expensive player in IPL history after Punjab Kings bought him for an opulent price of INR 18.5 crore during the latest IPL auction. This difference, in itself, tells a huge story.
How IPL Teams Earn Money?
Broadcasting rights
Broadcasting rights contribute to a major chunk of how the IPL teams and BCCI (Board of Control for Cricket in India) make money. In the last e-auction for the rights, all records were broken.
For the next five years, BCCI will be getting a whopping INR 48,390 crores from Star Sports Network and Viacom18. For the first time, television and digital rights were sold differently. Readers must note that there has been a 3x growth in broadcasting revenue from the last cycle.
Star Network retained the television broadcast rights for a price of INR 23,575 crore. On the other hand, Viacom 18 won digital rights for INR 23,750 crores. Additionally, Viacom 18 will collaborate with Times Internet to broadcast the tournament in overseas countries. Around 50% of the revenue is kept by BCCI, and the rest gets divided among all the franchises.
According to a financial advisory firm Elara Capital, each franchise will undergo around 2x growth in their average revenues in the span of the next five years. BCCI will earn around INR 107.5 crore per game (combined deals), which is the second most in the sports leagues around the world. National Football League (NFL) tops the list with media rights of around INR 136 crore per game.
Sponsorship deals
TATA is the title sponsor of the Indian Premier League. For two seasons, TATA will pay BCCI a sum of INR 335 crore. A part of the central sponsorship deals is kept by BCCI, and the rest gets distributed among the franchises. Same with the other central sponsorship deals as well.
Apart from the central sponsorship, each franchise has its individual sponsors as well. From title sponsors to associate sponsors to media partners to social media and radio partners, there are a plethora of sponsors linked with an IPL team.
Around 20-30 percent of the team’s revenue comes from sponsorship only. From jerseys to caps to trousers, a sponsor can be found everywhere on the kit. The sponsorship of teams like Mumbai Indians, Chennai Super Kings and Royal Challengers Bangalore is said to be a comparatively expensive than the rest of the teams.
All three mentioned teams have a huge fan-following and their social media numbers provide further validation. The bigger the logo, the bigger the amount a sponsor needs to pay to the franchise.
Ticket Sales
After three long seasons, the tournament is returning to the regular home-away format. Each team has its own home ground(s), and the revenue of ticket sales goes directly to the franchises. A part of the money is distributed to the State Cricket Associations as well. For example, if Rajasthan Royals are playing at the Sawai Mansingh Stadium, Jaipur, Rajasthan Cricket Association will also get a little share.
It is certain that the franchises with bigger stadiums have an edge in this aspect. Ahmedabad’s Narendra Modi Stadium is the biggest stadium in terms of capacity, and ticket sales will definitely be more here.
Merchandise Sales
Fans love wearing the merchandise of their favourite teams, and the franchises are aware of it as well. Each IPL team has its own merchandise partner, and they earn a good amount of money from it as well. It is due to the same reason why franchises try to sign a player with a bigger brand value which is helpful in selling the jersey of that particular player.
Apart from the clothing, there are a lot of different types of merchandise such as wristbands, pens, mobile phone covers, etc. Along with all the mentioned factors, the prize money of the tournament also plays a part in the revenue of the teams.
