The great Indian Premier League is a big business venture across the globe. It has been a successful business model in the sports arena so far after the Soccer league, and very soon will reach that level of investment and returns. Many Investors and enterprises are keen to invest and buy big-performing players for their teams at a high cost due to the popularity and multiple-income resource-based models of IPL.
We wonder mostly, because if all tickets are not sold, how has it run successfully for years?
Let us briefly explain how IPL business investments, big budgets, deals, and profits go in this blog article.
IPL Business Model
IPL has a very durable business model to invest in and have profitable deals. It is quite sustainable even during conditions like the COVID-19 pandemic. Many businesses can advertise, and promote their business brands via IPL and have millions of profit.
The model invites private groups and business ventures to a franchise. The deal closes at a very high price. This indicates the standard and prospect of handsome profit figures encouraging many business empires to go for franchises and acquire the deal for business branding, status, and assured profit. It has stiff and healthy competition out there for this Franchise business segment.
Every investor and franchise owner thinks IPL is a profitable venture because of its high-rising cricket entertainment value. It will grow in any condition for years. IPL has done a mixture of Cricket and Bollywood, which is a favorite among Indian audiences. The team and the valuable player, every franchise invests or spends to make a perfect team per their choice. This is a costly affair of some billions.
The benefits are enormous for the Franchise owner. He can utilize his star cricketers to raise the team’s brand value for every season of the IPL. This does not require any extra fees to spend for the branding and team promotion by players -they own. They can promote their team on any media platform without any extra high fee.
Also, a Franchise can earn by promoting other brands via his teammates or players. This is a commercial way of earning revenue from the same resources.
The Franchise can earn from the partial stake in IPL live Broadcasting rights. Franchises can sell them for some other locations to earn extra fees. Also, extra revenue from TV Advertisement spots to various other sponsors or businesses, who likes to prefer such advt.during their matches.
Apart from this Media Rights of IPL Broadcasting on leading sports channels and OTT platforms for live streaming are sold by BCCI at great pricing. Even the IPL teams have a stake in this. After getting their stake from these world rights sale deals, IPL distributes the price to all leading or trending teams as their share in the same. Many top teams get their revenue more than 60 % with this deal. This is a revenue generation for the IPL teams or their owners.
The teams get around 10 % of profit from ticket sales.
Another income of IPL teams comes from merchandise sales. Items like Team jerseys, Key chains, caps, etc earn good revenue for the team owners/ franchise. Franchises earn around 20 to 30 % of their revenue out of sponsorship logos. The more a sponsor wants his brand logo to be visible, the more money he needs to offer the franchise/owner of the team. This is a very profitable business deal for both sides.
Above all, is the winning price for the IPL team. A very heavy price is reserved for the IPL winner. The prize is distributed among the winning team players up to 50 %.
Earning Resources for IPL
1. Franchises earn via-
- Bids
- Franchise Rights
2. Sponsors earn via-
- Title
- Licensing
3. Broadcasters earn via-
- Media Rights
- Advertising
IPL earns money via below resources:
- Sponsors
- Tickets Sale
IPL is a group of Sponsors. These Sponsors are for everything that helps to conduct and make the IPL season in full swing. Not only from team Jerseys and other Merchandising items but also from Ball to Bat, all things are sponsored and come with sponsor’s logos. There are main Sponsors, Jersey Sponsors, and Sleeve Sponsors available for All IPL teams.
IPL ticket sales are an important income resource for the IPL. Every IPL match comes up with a good amount of price. It is a large amount of gain for the teams from this resource. As all of us know, every team has half of its matches at their home pitch. So, there is a fair chance of earning for the home teams.
Other than this, IPL has got the best combination of overseas and Indian players in every franchise team. These players are highly performing and have great potential. They really play well and change match results single-handedly, these things make them earnable and sellable resources for every team in many ways.
Players get big fat rewards in terms of money and brand value for their IPL franchise. This brand value brings in many prospectus financial gains for all -players, teams, and franchises as well as sponsors.
Summarising It!
So, One can think about the most successful business model of the IPL for years. This model also encourages the game and players. It has transformed many local cricket institutions across India with many Tier 2 cricket destinations. IPL has promoted the game in all parts of the nation for millions of youngsters. It has become a ray of hope to earn a good amount of money for upcoming players, as well as giving them timely international exposure in the quick cricket format.
IPL, due to its best business model, has been a favorite global sports event from its beginning. Every channel involved in it has satisfied returns for the investment in a most decent and promising way.
This is ever rising with every year, IPL is becoming more popular with the upgradation of many required elements, justifying it for the great financial status today.