The 17th edition of the Indian Premium League (IPL) is starting now in 2024, and naturally, the religious fans of the game are all excited and waiting for their favorite matches. At the same time, the franchise owners and other businessmen anticipated huge returns. The Twenty20 Cricket League allows the best, most talented cricket players around the world and gives them a chance to showcase their skills.
The core business plan of the IPL is to invite private companies to buy cricket franchises. The Franchise builds its team with its own choice of players available across the IPL Auction of the available Indian and Overseas players in the T20 format. Only 4 overseas cricketers are allowed to play in the final squad of each IPL team for a match.
This requires a strategic approach and a business mindset with investment risk on many big players, as one never knows who will play well in the coming season or not.This is an assured business model with multiple income sources inside it.
The franchises are available for huge prices, so the corporates are largely attracted to invest in various other major components of IPL. When it comes to the Indian Premium League auctions, teams spend crores of investment just to get the desired players. With such money involved in the league, it is important to focus on the financial aspects of the game. The IPL brand value was calculated to be around $5 billion, as per the reports of the leading valuation consultancy Brand Finance. The Indian Premier League has noticed a 7% increase in its valuation recently.
Apart from its cricket matches & glamour, we might have often thought about how IPL tries to spend crores of money on the players in the auction. Moreover, how IPL gives away a mega cash price to the IPL winner. We must know, that in the 2019 IPL season, The Mumbai Indians team took home the prize money of Rs. 25 crores! So the secret is here.
Source of IPL Income
1. Media Rights
This is one of the major sources of Income for IPL teams is media rights for broadcasting IPL. At the beginning of the IPL, Sony grabbed broadcasting rights for 10 years for Rs. 820 crores every year. But, the rights were given to the Star channel for five years for Rs. 16,347 crores (from 2018-2022). It is Rs. 3,269 crores p.a, which is almost four times the earlier price.
The rise in the price is due to the multiplying demand for IPL. Other than this, the advertisement income during IPL matches is important in the overall income. In between IPL matches, The channel charges Rs. 6 lakhs-8 Lakhs for a 10-second ad.
2. Sponsorship
Sponsorship plays a crucial role in the overall IPL income. The team’s tie-up with various companies to promote the brands in return for the high amount of money. Normally, promotion is done in two types, through print media and advertorials.
The player’s jersey is an important marketing tool, it is full of colorful brand logos. During the IPL match, various company logos & names are printed on the jerseys, bats, umpire dresses, helmets, boundary lines, and on the screen. All these are modes of income.
Here are some sponsors of the Indian Premier League right from the IPL start:
Sponsorers Period Fee Per Annum
DLF 2008-2012 Rs. 40 crore
Pepsi 2013-2015 Rs. 95 crore
Vivo 2016-17 Rs. 95 crore
Vivo 2018-2022 Rs. 440 crore
3. Merchandising
The sale of merchandise is another important part of the IPL income. The merchandise has inclusion of jerseys, sportswear and other sports equipment. Each year IPL is becoming big and it has a lot of potential in merchandising. It is the best chance for the IPL and the franchises to the brand monetization.
Currently, IPL is going as per the global sporting events and getting success in monetizing brands through merchandising.
4. Prize Money
Prize money is one of the major sources of income for the franchises. In 2019, the prize money for the winning team was Rs. 25 crores and for the runner-ups, it was half of it i.e. Rs. 12.5 crores. Best performance in the IPL will not only affect in winning prizes but also enhance the brand value. The IPL team’s valuation summary for the year 2019 is as follows:
Team Brand Value
Mumbai Indians Rs. 8.09 billion
Chennai Super Kings Rs. 7.32 billion
Kolkata Knight Riders Rs. 6.29 billion
Royal Challengers Bangalore Rs. 5.95 billion
Sunrisers Hyderabad Rs. 4.83 billion
Delhi Capitals Rs. 3.74 billion
Kings XI Punjab Rs. 3.58 billion
Rajasthan Royals Rs. 2.71 billion
5. Revenue from Tickets
Each IPL match has some revenue from the sale of tickets adds to the income source of IPL. Each franchise is permissible up to a minimum of 8 matches and the franchises have the full right to the income from the tickets and the gate passes. This income may rise if there are matches between two tough teams. The revenue is good enough as another big source of income for the IPL.
Conclusion
As discussed above, they are major income resources for the IPL. The teams earn handsome returns and prices depending upon their performances and brand values. The more the brand value and the success ratio of any IPL team for the season, will increase their effective income by some crores, but obviously. Apart from that, the team sponsors and brand endorsement gives additional rewarding opportunities. So, the overall IPL income and the IPL team’s income have multiple ways to rise every year. Well, IPL is a proven business model of instant cricket format with an international level of exposure for all its elements in the long run. The money involved with the talent of cricket and never never-ending spirit of team fans and followers made it a more and more successful brand over the years.