One of the richest leagues to ever exist and one of the most popular sports leagues on viewer count the IPL has branded itself in a glitz and glamour unlike anywhere. Dubbed as the only true festival of the Indian populace it has acquired an acceptability unlike anything in the country. Over the years it’s popularity has acquired a tremendous status and so has the financials of BCCI it has skyrocketed on account of the league. The commercial nature of the league is to be noted here where broadcasting companies, digital companies and sponsorship deals all play a part in the sport’s organisation and conduct. We will lay stress upon this very factor of the sport analysing thus its networks, its funding and the total revenue acquired as a result of its happening.
IPL’s History and Financials
ICL or Indian Cricket League was founded in 2007 with funding provided by Zee Entertainment Enterprises. On 13th September 2007, on the back of India’s victory at the 2007 T20 World Cup, BCCI announced a Franchise-based T20 cricket competition. When the IPL began in 2008, some of India Inc. and Bollywood’s biggest names spent a total of $723.59 million to buy 8 city based franchises. A decade and a half later, the IPL has grown manifold in popularity and commercial value. In 2021 for example CVC Capital, a British equity firm that formerly owned Formula 1, paid $740 million for Gujarat Titans. These along with various other sponsorships and rights has created a system suited for a robust commercial environment.
Central Pool of Funding
Broadcasting rights and central sponsorship deals make up about (70-80)% of the overall revenue of teams. BCCI has the right to 50% of the overall Central Revenue. The other 45% is distributed equally among franchises; the remainder is bagged by the 4 teams that make it to the playoffs. As per the regulations Franchises annually give the BCCI 20% of their overall revenue (from all sources except ticket sales) as fees. Total revenues from the Central Pool it’s been estimated in the 5 year cycle may touch up to $7.6 billion. Whereas half the share being divided among franchises it could secure them an annual income of $76.9 million or ₹600 crore which was more than double the estimated income of each team in the 2022 season (₹275 crores). Many other streams of revenue can be deduced from the workings of the league that greatly profit the BCCI. Tata for instance paid a total of ₹335 crores for being the title sponsor. Chinese company Vivo had to pay a total of about ₹1124 crores for its abrupt exit plan. IPL also got upwards of ₹300 crore through associate sponsorship deals from official partners, strategic time out partners, on-ground partners among others.
Other Revenue Streams of BCCI
- Team Sponsorships- These are not exclusive sponsors of the franchise and not the tournament. These include shirt sponsors, radio and digital partners among others.
- Ticket Sales- With 7-8 home matches every season, the ‘domicile’ franchise owners take home an estimated 80% of the revenue from ticket sales with the remaining 20% divided between the BCCI and sponsors.
- Revenue from Ticket sales- 10-15% of a team’s revenue comes from this. Teams also earn from match day food and beverage sales in home stadiums.
- Franchise auction- In 2021, the RP Sanjiv Goenka group shelled out around $940 million (₹7,090 crore) to buy the new LSG franchise. In this way huge amounts of payments are handed out to the BCCI in this way. Some moreover expect the BCCI to increase the number of teams from 10 to 12 by 2027.
- Earnings from the Broadcasters- Broadcasters earn from huge advertisements for example Star India (Disney Star) had paid more than ₹16,300 crores for the broadcasting rights of 5 seasons from 2018-2022.
- Advertising and TV rights- Advertisers paid the broadcasters as much as ₹14 lakh for a 10 second ad slot during a match. Total Revenue generated from TV and digital (streaming) ad sales in IPL 2021 was almost ₹3,500 crore. Subscriptions also drive revenue from digital streaming rights. (Disney+Hot star) derived close to 60% of its subscriber base in India with the help of IPL.
Star India had said in 2021 that IPL was on track to cross the 400 million viewership mark for the 4th year in a row that season. In comparison, the NFL recorded an average viewership of 17.1 million per game (TV+Digital) in 2021 which was an increase of 9% year on year. As for EPL or English Premier League, a total of 26.8 million in the UK watched the coverage in 2020-21. Only the NFL as a league is more valuable than the IPL. As a matter of fact IPL’ brand value is $4.7 billion as has been estimated by Brand Finance and it has recorded a 7% increase in its valuation as and according to the data available in Feb, 2022. Viewership of IPL in 2021 reached the 367 million viewer mark and watched more than 188 billion minutes. The BCCI media rights auction stands at INR 6032 crores and amounts to INR 59.10 crores/ match.
Sponsorship – From players bat to the nails on the stumps everything within the stadium has a price tag. The sponsors are the real source of income in the Indian Premier League. There is the main sponsor, a jersey sponsor and even a sleeve sponsor, which hugely contributes to the overall income. The promotion is done in two forms, through print media, and through advertorials. The player’s jerseys are a valuable marketing tool. IPL outfit has an average of 10 brand logos, 6 on the Jersey’s, 2 on the pants and another couple on the cap. Moreover they also create ad content for the promotion of the brand’s products.
So these aforementioned revenue streams lay bare the various facets of this commercial enterprise and how big the entire operation is. The entertainment factor of cricket comes on full display in IPL and this certainly has lowered the value of the sport albeit has increased its commercial aspect. The giants of the sport have condemned it at various times for its commercial links and an Uncricket attitude that the league represents. The 20-20 for sure has lessened the sport’s uniqueness and dexterity and various skills that are demanded from a cricketer.
Conclusion- The impact that IPL has on the popular culture of India is huge and at the same time the diminishing spirit of Cricket as a sport and a true game culture cannot be denied. The commerce and all its various aspects have in a way downgraded the game but IPL’s effect on the economy of India cannot be downplayed either. The money making aspect is huge and that is what makes the game valuable if at all. It is important to understand how the system works so that a more beneficial culture commercial and otherwise can come into being.