Indian Premier League is a T20 cricket league, which is organized by the Board of Control for Cricket in India (BCCI). It started in 2008 with 8 teams. Later two more teams Kochi Tuskers Kerala and Sahara Pune Warriors were also attached to it, but due to different reasons dropped out of this league.
Gujarat Lions and Rising Pune Supergiants joined in 2016-17 when Rajasthan and Chennai were banned for two years. This year two new teams have been added in the form of Lucknow and Ahmedabad. That is, this time the number of teams is 10.
How do teams earn from IPL?
The entire game of IPL is a business. Every part of it generates huge revenue for both the BCCI and the team owners. Let’s have a look at the earnings from different sources from IPL:
The earnings from IPL can be divided into three parts:
- Central Revenue: This earning accounts for about 60-70% of the total earnings from IPL. There are two important sources of earning from central revenue – (i) media or broadcasting rights and (ii) title sponsorship.
- Advertisement and Promotional Revenue: The share of revenue from this is about 20-30%.
3.Local Revenue: About 10% of the total earning comes from this. This includes earnings from tickets and other things.
(i). Media or Broadcasting Rights:
-Since the beginning of IPL, the most important means of earning has been earning from its broadcasting or broadcasting rights.
-Broadcasting rights mean that IPL matches will be able to be shown only by the channel, which has the rights to it.
-From the beginning of IPL i.e. 2008 till the next 10 years i.e. 2017, its broadcasting rights were with Sony, which had given Rs 8,200 crore to BCCI for this.
-Broadcasting rights were bid again in 2018 and this time Star Sports won. Star bought IPL broadcasting rights for 5 years from 2018 to 2022 for Rs 16,347 crore.
-Media and sports experts believe that IPL media rights can be sold for 30 thousand crores for 2023-2028.
Now know how much money teams and BCCI earn from this?
Initially, BCCI used to keep 20% of the earnings from broadcasting rights and 80% of the money was received by the teams, but gradually it increased to 50%-50%. That is, now BCCI and teams get half-and-half of the money received from broadcasting rights.
In the first 10 seasons of IPL, the BCCI and the teams earned Rs 8,200 crore from broadcasting rights, i.e. 820 crores every year. In 2018, Star Sports bought media rights for 5 years for Rs 16,347 crore. That is, about Rs 3,270 crore every year.
(ii) Title Sponsorship
-Title sponsorship is also a huge source of income for IPL teams. Title sponsorship means getting your name added before IPL like- DLF IPL, Pepsi IPL, Vivo IPL and now Tata IPL.
- Brands spend a lot of money to get their name added in front of the title of IPL, because it gives a lot of benefit in the promotion of their brand.
DLF, one of the country’s largest real estate developers, bought the title sponsorship rights for Rs 200 crore for five seasons from IPL 2008 to 2012.
After this Pepsi spent Rs 397 crore for the next five seasons. However, Pepsi parted ways in 2015, two years before the completion of its deal.
After this BCCI sold these rights to Chinese smartphone company Vivo for two seasons (2016, 2017) for 200 crores.
Vivo then bought these rights for 2199 crores for five seasons from 2018 to 2022, but due to the India-China dispute, became the Dream11 title sponsor in 2020 and gave 222 crores for it.
In 2021, Vivo made a comeback and bought the title sponsorship for 439.8 crores. For two seasons in 2022, Tata won the title sponsorship and spent Rs 600 crore for it.
How much did IPL teams earn from Central Revenue during 2018-2021
The BCCI’s earnings from IPL’s central revenue i.e. broadcasting rights and title sponsorship from IPL 2008 to 2017 was Rs.8400 crores i.e. Rs.840 crores annually. At the same time, during 2018 to 2022, BCCI is estimated to earn about 18500 crores from this. That is, about Rs 3700 crore every year.
On distributing this earnings equally between the BCCI and the teams, the 8 teams earned about Rs 1156 crore annually, that is, each team would earn Rs 230-240 crore annually from the central revenue.
2.Advertising and Promotional Revenue
Teams earn a lot from advertising and promotion. Teams have their own business model of earning money. Under this, they enter into agreements with many companies.
Under teams advertising and promotion, companies also give money to teams for players and umpires’ jerseys, helmets, wickets, names and logos of companies appearing on the field and boundary line, etc.
Teams also get players to promote other brands i.e. ads. Many teams also get players to promote their own brands. For example, Mumbai Indians Jio’s ad, in which many players of Mumbai Indians including Rohit Sharma are seen.
Teams also make money by selling merchandise such as T-shirts, caps, globs, etc. bearing their names and logos. According to reports, teams like Mumbai Indians earn up to Rs 50 crore every year from advertising and brand promotion.
- Local Revenue: The third source of income for IPL teams is the tickets sold on the ground. Tickets sold in a match earn around Rs 4-5 crore. 80% of this money goes to the home team.
- Local Revenue: The third source of earning of IPL teams is the tickets sold on the ground. Tickets sold in a match earn around Rs 4-5 crore. 80% of this money goes to the home team. That is, from every match, the teams earn around Rs 3-4 crore from tickets. However, this earnings of teams has declined during Kovid-19.
How much IPL teams earn every year?
If we add the earnings from the central, advertising and local revenue of the teams, then in the last few years each team of IPL has earned about Rs 300 crores annually. However, a large part of this earning has to be spent by them.
IPL teams spend around Rs 90 crore of these on players’ fees every year.
Teams spend Rs 35-50 crore every year on the operation cost, which includes flight and hotel stay of the players.
That is, combining these two expenses, the teams spend 130-140 crores every year.
Also, for organizing every match, the teams have to pay Rs 50 lakh to the state association – that is, Rs 3.50 crore for 7 matches in every season.
Apart from this, teams have to give 20% of their total earnings to BCCI, which works out to about 25-30 crores according to the earnings of the teams.
How much profit do IPL teams make every year
Now if the IPL teams earn about 300 crores every year, if we remove the expenditure of about 160-165 crores, then the teams earn a profit of about 130-140 crores annually.
Prize money: IPL prize money is also a means of earning top-4 teams. In 2021, the winning team got Rs 20 crore, the runner up got Rs 12.5 crore. At the same time, the third and fourth ranked teams got Rs 8.75-8.75 crore respectively. The team owner gets 50% of the prize money, while the remaining half is distributed among the team.
If the prize money is also included, then the annual profit of the top-4 teams of IPL becomes Rs 140-150 crores.
