How does an IPL team earn money

How does IPL franchise earn money? IPL’s Business Model Exposed 2022 

The prize for the winner of the last IPL season was ₹200 million. For most people, that’s a lot of money. For a team in the IPL, though? What does it mean? Think about it. According to the last season, even the least expensive IPL team, the Rajasthan Royal, has a brand value of almost ₹2.5 billion. The brand value of teams like the Chennai Super Kings is ₹27 billion. How does IPL franchise earn money? The IPL games you see on TV are, of course, just the tip of the iceberg. Behind the scenes, real money changes hands.

How to buy an IPL Team?

There are two choices for someone who wants to buy an IPL team. Only in these ways can he buy IPL teams.

  1. The first thing to do is talk to the owner of the team that is already there. And buy their shares like LIC has done. The insurance company LIC bought 6% of Chennai Super Kings.
  2. The second way is to wait for BCCI to say that a new team is starting up. Because going there with money won’t make your team. When BCCI wants to add a team, it goes through the process. When BCCI asks people to buy the team, only firms whose value is at least 3000 crores can apply. Revenue and profit are used to decide how much something is worth.

So, when the BCCI invites, the companies that qualify must buy ITT, which stands for “Invitation To Tender.” The price is Rs 10 lakhs plus GST. This is a fee that can’t be taken back. All of the rules that are written in this. People who make it to the short list can take part in the bidding process. In the bidding process, each team has a starting price, which is usually between 1700 and 1900 crores. The team won’t be sold for less than this.

After this, the bidding is over, and the team goes to the person who bids the most. Like, Lucknow was sold for 7,000 crores and Ahmedabad was sold for more than 5,000 crores. You have to buy players after you buy a team. But to be able to buy more players, you need money, and initially franchise invest their money, but what about doing it every season? They should earn something from IPL, so How does IPL franchise earn money? But before understanding that let’s just understand How to play for IPL.

How to play for IPL?

Players have to sign up to do this. So, if I play cricket, am I able to sign up? That’s not the case. There are three ways for players to sign up.

The first is a “capped player.” A “capped player” is any player who has played even one match for Team India.

The second is players from other countries.

The third is players without caps. They are sent by the state association. There are between 1100 and 1500 people who play. From those, 500 or 600 are chosen. Hardik Pandya, who had never played for India before, is the best example of this. He came to India on the recommendation of the state.

When a player signs up, he or she sets their base price. This price can be anywhere between 20 lakhs and 2 crores. After this, the players have no more say in how things go. One team spent a lot of money to buy all the good players and make the World11. IPL will no longer be fun. Because of this, there are rules about how to bid. There can’t be less than 18 or more than 25 people on one team. And it can’t have more than 8 players from outside the country.

How does an IPL team earn money?

How does IPL franchise earn money?

How do they make money after putting in so much? Buying a team, paying the salaries of support staff and player’s fees, administrative and operation costs, hotel and flight tickets because matches are held in different places.
It takes a lot of money. Also, 20% of what a team makes has to go to the BCCI. Even though they put in so much, the winning team only gets 20 crores.

So IPL’s way of making money is very different. The 20 crores prize money is not important to any team. So, How does IPL franchise earn money?

IPL Team and their Sponsors
IPL Team and their Sponsors, credits: the sports news

Broadcasting rights are the first and biggest source of income for an IPL team. From 2008 to 2017, Sony owned the rights to broadcast. Sony paid 8200 crores for 10 years for this. After that, there were no more bids. For 16347 crores, Star India bought the rights to air the show from 2018 to 2022. Half of this money goes to BCCI, and the other half is split between the IPL teams. Before, BCCI took 20% of this amount and gave the other 80% to the teams. Over time, the share has grown to 50%. This is How does IPL franchise earn money in one way. What are others?

Title sponsorship is the second source of income. You might have noticed that IPL isn’t just called IPL. It has been called the DLF IPL, the Vivo IPL, and the Pepsi IPL. It will now be called the TATA IPL. Because of this, people bid on what is called the title sponsorship. From 2008 to 2012, DLF paid 200 crores to change the name of the tournament to DLF IPL instead of IPL.

After that, Pepsi gave 396 crores over the next three years. After that, Vivo gave 2199 crores from 2018 to 2022. Because of problems between China and India, this thing was given to TATA for 300 crores per year. The BCCI keeps 60% of the money made, and the other 40% is split between the teams. This is the second way How does IPL franchise earn money.

Brands pay money if their logo or name is on the T-shirts that team members wear. That’s how does IPL franchise earn money. During the game and while inside the lines If you see the name of any brand anywhere, like on boundary roads, wickets, helmets, bats, or an umpire’s T-shirt, that’s where you’ll find it. All of this makes money for the teams. Lastly, the amount of the prize is taken into account. The team that wins gets 20 crores.

And the runner-up gets 12.5 crores. Out of which 50% is kept by the owner of the team. And the remaining 50% is divided among the players. Even though in some arrangements, BCCI takes the share in revenue. But the final amount that the team earns, has to give 20% of that to the BCCI.

People who are against this deal said that these teams make most of their money by fixing games. In the first case, CSK and Rajasthan were banned from playing for two years. Aside from that, I didn’t find any evidence that spot-fixing had been caught. Is it done now or not? It’s up for discussion.

Congratulations, you just learned about “How does IPL franchise earn money?” and it’s Business Model. For those who wants to understand more, consider reading this.

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