How Does IPL Team Earn Money? This Will Blow Your Mind
By Space Coast Daily // July 19, 2024
The IPL has become very popular in recent years and it has changed people’s perspective about cricket. Each year it raises the bar for adventure, and fans can’t get enough of it.
The league is undoubtedly very entertaining but it has far more than just playing on the field. The most discussed part of the IPL is its financial funding. If you are also one of those who wants to know the source of money for IPL teams then you are at the right place.
What Is The Business Model of IPL?
The IPL’s economic model is founded on a unique blend of cricket, entertainment, and marketing initiatives. The league operates on a franchise structure, with ten clubs representing various locations in India competing against one another.
The franchisees are privately owned and follow a revenue-sharing model. The league makes money from a variety of sources, including broadcasting rights, sponsorship agreements, merchandise sales, player auctions, and player endorsements.
- Media Rights
Over the last few years, Sony India has served as the official media sponsor of IPL and then followed by Dream 11. At present, the TATA group is the title sponsor of the game.
Disney+ Hotstar is the official broadcaster of the IPL 2022. The tournament has added additional sponsors, like Zomato, Pristyn Care, Ather Energy, Parle Agro, Livspace, Niyo, Spotify, L’Oreal, and Spinny.
IPL is very famous for its money distribution strategy. Each year BCCI get a huge amount of revenue that comes from online streamers and broadcasters. Even after deducing the fees the leftover amount is huge and it is distributed among all the IPL teams. It is based on their team rating and ability to earn money.
Media rights are another way for IPL franchises to earn money. We can say that they are the largest contributor to IPL. Star India reportedly spent a huge amount back in 2023 to purchase IPL broadcasting rights for a massive INR 23,575 crore.
Each IPL matches nearly makes INR 60.18 crores for the BCCI, but the latest bid in the BCCI media rights auction is INR 23,758 crores, or INR 59.10 crores per match.
- Merchandising
One of the main earnings of IPL teams is from the sale of official IPL products. IPL products involve official jersey production, sports equipment, sports moments, and other things. Merchandising is a big thing for IPL and teams to monetize their brand, and the IPL has begun imitating worldwide athletic events.
The whole of this pattern is about to change because more IPL teams are moving to top-level product promotions. The merchandise market of India is growing at a massive hundred per cent rate per annum. The market is huge 30 million dollars. Each team sells their own products like T-shirts, caps, bats, wristwatches, and other items.
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- Selling Stake
IPL teams are generating a high profit by selling stakes at the right time. For instance, Delhi Capitals which were earlier known as Delhi Daredevils. Jindal Steel Works holds a whopping 50% share in the IPL team with a revenue of 550 crores.
The group has shown a desire to increase its stake in the team from 50 to 100 per cent. So, there is nothing wrong in saying that they have almost doubled the investment in the team. Most recently there were rumors that another team Rajasthan Royal’s owners sold fifty per cent of their ownership to the organization.
Even though such large agreements do not happen every day, it’s not Dhankesari. Selling stakes is no doubt one of the best methods for making money for IPL.
- Sponsorship
Another contribution to the team’s earnings is the brand sponsorships. Each IPL teams work with the brands by wearing their logo on the t-shirts, jerseys or in sports gear. Teams work with brands to increase their reach and in return, brands pay a huge amount of money to the team.
In both ways both parties get benefits. Teams also make lots of money with the help of multiple tournament-related marketing efforts. Sponsorship revenue typically ranges from 20-30% of an IPL team’s total revenue.
- Brand Value
Brand value adds significantly to the IPL franchise. If a club has star players on its roster, such as Mahendra Singh Dhoni, AB de Villiers, Virat Kohli, or Chris Gayle, it is more likely to attract top sponsors and investors.
When an IPL franchise wins the title or simply makes the playoffs, its brand value skyrockets. When it comes to brand value, IPL champions like CSK, MI, and KKR lead the way.
- Ticket Sales
The global epidemic impacted India’s greatest athletic event in 2020 and 2021. However, it returned with a bang this year. Now that the stadiums are full of fans, a tiny amount of ticket sales will be distributed to sponsors and the BCCI, with the remainder going to the team’s budget.
The stadium’s seating capacity, the excitement around the event, the city’s standard of living, and other factors all influence ticket costs. According to reports, ticket money accounts for approximately 10% of IPL clubs’ revenue.
- Unlisted Shares
Unlisted shares and securities would be novel for Indian sports franchises, however, many European football clubs provide pre-IPO stocks. In India, the Chennai Super Kings are one of the sports franchises whose unlisted shares can be sold.
The franchises produce a significant amount of wealth from their pre-IPO stocks. If you want to earn some money, you can try your luck in morning teer game.
Conclusion
The Indian Premier League (IPL) is a lucrative company and a popular event among cricket lovers all around the world. Cricket enthusiasts from all around the world go from seven different nations and continents to witness the IPL in India.
The cricket league deserves full credit for having a greater impact on the lives of cricket enthusiasts. It is a money-making league that generates revenue from a variety of sources. Advertisements, sponsors, stadium tickets, merchandise, TV, and media all help to create revenue.
