Indian Premier League – The Entertainment Dose of The Country
The Indian Premier League (IPL) was inaugurated in the year 2008. Since then it has revolutionized the way sports leagues operate globally. Today it has become a multi-billion-dollar business. Since its inception, the IPL has become a huge financial enterprise generating massive returns. Today the entire enterprise is valued at $.10.7 billion.
How IPL makes money?
Let’s explore the various channels through which this enterprise and the franchises generate such high revenues
Broadcasting & Streaming rights
The broadcasting and streaming rights were auctioned in 2022 for a period of 5 years, that is from 2023 to 2027. These rights are considered the golden geese of the enterprise since they generate the highest revenue. The TV broadcasting rights were bought by Disney Star for a total price of Rs. 23,575 crores whereas the streaming rights were bought by Reliance-backed Viacom 18 (owner of Jio Cinema) for Rs. 23,758 crores. BCCI distributes a portion of these earnings to the franchises as well. This ensures that all the teams, irrespective of their individual earnings, receive a share of the overall revenue.
Title Sponsorships
The title sponsorship of IPL was auctioned in 2024. The bid was won by Tata Group for a whooping sum of Rs. 2500 crores. This deal is signed for a period of 5 years, from 2024 to 2028. A portion of the title sponsorship is also shared with the franchises.
Licensing deals
The enterprise also earns a good chunk from its licensing deals. Deals for making video games, fantasy leagues, and various other digital products.
Franchise Bids
The initial auctioning of franchises brought a significant amount to the BCCI. Big teams like Mumbai Indians, Chennai Super Kings, Royal Challengers Bangalore, and many others were sold for crores. BCCI also earns through franchise fees when new teams enter or the owners renew their existing franchises.
Team sponsorships
Apart from the tournament sponsor, each team has its own title sponsor, official partners, kit sponsors, and other brand endorsements. These sponsorships are the biggest source of revenue for the teams with deals ranging in crores. The amount totally depends on how good the team plays and how popular it is among its fans.
On-ground advertising
On-ground advertising generates a lot of revenue. There are many options available to the advertisers where they can have their brands displayed. They can advertise on giant digital screens, signage boards, rope branding, digital perimeters, digital sight screens, bats of the players, jerseys, stumps, and much more. The advertisers benefit a lot from these advertisements. This unique blend of in-game advertisements and strategic placements ensures maximum exposure during live telecasts and streaming.
Ticket sales and Gate revenue
The revenue generated by the sale of tickets might not be as much as the revenue generated by the advertisements but they still play a crucial role for the franchises. Almost all of the matches are houseful. The popularity of this tournament leads to the tickets being sold quickly. The prices of these tickets depend on various factors like how popular the teams playing are, the demand for tickets for a particular match, the viewpoint, and the seats the spectators desire to choose. Such in-stadium viewership also leads to good sales of food and beverages which is the gate revenue.
Merchandising
Every team has several merchandises that they offer to their fans. Merchandising is a good source of revenue for the teams. Teams offer products like t-shirts, replicas of jerseys with an option for the fans to print their name on the back, mobile phone covers, mugs, keychains, flags, caps, wristwatches, etc. The fans like to buy these merchandises to show their support for their teams.
Brand value
We already know that the IPL franchises make money through various sponsorships, partnerships, in-stadium advertisements, ticket sales, and the sale of merchandises. The revenue generated through these channels directly depends on the brand value of the franchise. The brand value of the franchises depends on the players and the team’s success in the tournament. Having world-renowned stars like Mahendra Singh Dhoni, Virat Kohli, Rohit Sharma etc. helps in attracting more sponsors with better deals. The number of times a team has won the tournament also plays a crucial role in attracting sponsors. This increases the brand value of the franchises. Bollywood stars like Shahrukh Khan, and Preity Zinta and business tycoons like Keshav Bansal and Neeta Ambani also increase the branch value of the franchise.
Prize money
The prize money also accounts for the income generated by the teams. The tournament’s winning team receives the largest share of the allotted prize money, which in turn goes to the team owners and the players.
Sale of players during auctions
The tournament’s player auctions take place every year before its commencement. Many times, owners tend to buy young rising talents. Since these players are new, they are available for a minimal base price. Based on these player’s performances their demands increase or decrease.
If the particular talent has exceptionally well then, their demand and the value increases for the next auction. Owners can then decide whether they want to retain the player or sell them. If they opt to sell them, they end up making a profit due to the increase in demand and value of the player. This income also contributes to the overall revenue generated.
Conclusion
The IPL’s financial model is a masterclass in the world of sports. It leverages various revenue streams to create a sustainable and highly profitable ecosystem. Profits are not just made by the Indian Premier League and its franchises, but also by the businesses that are located around the stadiums. Fans around the world travel from various countries to India to experience the in-stadium atmosphere. This in turn helps sectors like travel, tourism, and hospitality generate revenue during this tournament.
The tournament also generates revenue for the government in terms of taxes. Hence, the Indian Premier League (IPL) is not just limited to sports but is also a huge multi-billion-dollar business. For fans, it is like a festival that comes once every year spreading joy and happiness. This enterprise has also proven to be very beneficial for the sport in the country. It has provided a platform for upcoming players to showcase their talents and present them with an opportunity to represent the country at international levels.
As people say, “Cricket is not just a game in this country, it is a religion. A religion that unites people from all casts and races across the country.”