Indian Premier League
IPL
Business
Model
INTRODUCTION
The first season of IPL has commenced on the 18 April 2008 with final
match held on 1 June 2008 so far 14 seasons have been completed.
IPL is regulated by Board of Control for Cricket in India (BCCI).
It was initiated by Lalit Modi who Served as the league’s first chairman.
Initially there were 8 teams but the recent addition of LSG and GT has
made it to 10
It has became the biggest competitor of multiplex in India
SIMPLE BUSINESS MODEL
Expenses the Franchises have to bear:
•Franchise fee to IPL
Highest fee: LSG-7090Cr LOWEST: RR-503Cr
•Player Acquisition Cost (120Cr/per year)
•Stadium Hire Charges.
• (DC:- Arun Jaitley Stadium, RCB:-Chinnuswamy, MI:- Wankhede,KKR:-Eden Garden,
CSK:- chepauk,)
• Team Costs (coach, travel, insurance, office, other expenses)
•Marketing/ Promotion cost .
MAJOR SOURCES OF
REVENUE
Broadcasting/ Share in sale of
01 Media Rights 03
tickets/ Gate Money
Share in sponsorship
02 04 Merchandise Money
money
05 Other Revenues:
Revenue from in stadium advertising
Revenue from own sponsorship
Sale of players to other franchises
MEDIA RIGHTS (20:80)
•Money earned from media rights will be
divided among BCCI and IPL franchises in
the ratio of 20:80.
•There are two types of media rights one
is digital and another is television
broadcasting.
•2008-16 : SET Max
•2017-22 : Star Sports, Disney Hotstar
•2023-27 : Star Sports, Viacom 18
2. Share in Sponsorship in Money(40:60)
Title Sponsor
3.Revenue from sale of tickets
The earnings here depends upon the sitting capacity of the stadium hired by
franchise ( GT : 130000, RR: 30000)
The ticket prices of ipl is between 500-9000INR
While some special tickets may cost 25000 to 30000INR
Apart from these all the food stalls , jersey stalls were setup on contracts with the
franchises
For example KKR franchise reportedly earned around 70cr INR from ticket sales
alone . It hires Eden Gardens of Kolkata which has a capacity of over 60000
spectators.
4.Merchandise Money
Every franchise sells it’s merchandise This includes official jersey, T shirts,
Caps, Wristwatch, Bat and Ball signed by players.
All of these sales happens online.
This merchandise market has a valuation of 30 million dollars.
Merchandising is a huge opportunity for Ipl and franchises to monetize their
brands.
5. Trading of players
A Trading window set-up by IPL allows the franchises to trade the player
among themselves.
Trading can take place in two ways. A franchise can offer to sell a player via
trade or express an interest to acquire a player but before trading player’s
consent must be obtained.
Negotiation between the franchises should only be with regards to fee payable
to player other factors will remain same
(For example trade of SHIKAR DHAWAN from DC to PBKS where DC got three
players in cost of a single player).
6.Revenue from own sponsorship
Many companies takes IPL as an opportunity to endorse their brand
they pays Lakhs and crores together to advertise their products and
brands on the jerseys of the team.
The franchise gets paid to add the logos of companies on Caps, Shirts,
sleeves, Back, and they are charged for it accordingly.
7.Prize Money
The winning team in ipl gets a prize of 20cr.
The runners-up in ipl will be awarded with 13cr.
The prize money awarded to best batsman and the bowler of the
season also belongs to the franchise.
There are several awards in every match such as Man of the Match,
Best Catch of the Match, Fastest Ball of the Match, all the money
won by this also belongs to franchises.
Conclusion :
Indian premier league is a money making business and festival for
cricket fans all over the world. Cricket fans around the world travel
across seven countries and seven continents to watch ipl in India. All
credit goes to the credit league as it has created a bigger impact on the
life of cricket fans. It’s a money making league where money is
generated from all the sources. The money is generated from
advertisement, sponsors, stadium tickets, merchandise, Tv and media.
