IPL 2022: HOW IPL FRANCHISES MAKE MONEY

Here we discuss how IPL franchises/team owners make money

The team owners of the IPL 2021 teams spend a lot of money to buy the team and players. These team owners are big corporates who bank their money on IPL teams. A lot of money is involved in raising an IPL team. It is very important to know how IPL franchises make money. There are multiple ways by which they do so.

The team owners of the 8 VIVO IPL 2021 teams spend a lot of money to buy the team and players. These team owners are big corporates who bank their money on IPL teams. A lot of money is involved in raising an IPL team. It is very important to know how IPL franchises make money. There are multiple ways by which they do so.

1. MEDIA RIGHTS

BCCI earns a lot of revenue from the media rights which it sells to the broadcasters. If we remember in 2017, Star India brought IPL broadcasting rights for 5 years by spending 16,347 crores. This translates to roughly 60 crores per IPL match. BCCI shares these media rights with all 8 teams. (now they will share with 10 teams)

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2.TITLE SPONSORSHIP

The total amount collected by the IPL commission or the BCCI from the sponsorships of the IPL, for example, the VIVO or Dream 11. Then this amount has to go to a central pool, and then a mutually agreed percentage gets divided among all the franchises. Then 80 percent of the amount is given to the team franchise, and the left 20 percent goes to the IPL committee.

3. Ticket sales/gate revenue

The revenue from ticket sales is one of the most important sources of how IPL franchises make money. It is estimated that ticket sales contribute to 15% of the total revenue for IPL franchises. They depend a lot on this income source.

4. MERCHANDISING

This is a very fruitful resource for the IPL team owners also. They get a significant amount of income from this as well. The merchandising includes the sale of jersey copies, some of the sports mementos, kits, caps, T-shirts of all the teams! They are genuinely sold in a very wide range.

The stall rentals which are there in the IPL matches also give their rents to the BCCI. It is a fixed amount that is collected from all the stalls. These are the stalls that are indulged in selling their food as well as beverages to the people. People buy them to enjoy their matches while eating and drinking. So this thing also plays a major part in having a great income for the IPL.

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5. IPL PRIZE MONEY

IPL prize money is also another way by which the IPL franchises earn money. The teams are given prize money according to the rank they get in the points table. In VIVO IPL 2021, CSK won the IPL title, and they received 20 crores.

Similarly, KKR got 12.5 crores for being the runner-up. This way, the IPL prize money is distributed to the teams.

6. BRAND VALUE

The brand value of IPL teams also plays a major role in how IPL franchises make money. The team which has a lot of star players attracts a lot of brand value.

Players like Virat Kohli, Glenn Maxwell, AB de Villiers, etc bring in a lot of brand image to RCB. Recently in 2020, Mumbai Indians was ranked as the most valuable IPL team with a brand value of 761 crores. A few days back CSK surpassed MI in terms of brand value, they became the first IPL franchise to cross one-billion-dollar valuation. The IPL team which performs better gets more brand value compared to others.

7. SELLING STAKE

The IPL franchises also make a lot of money by just selling stakes in the team. A very recent example is Delhi Capitals. This IPL franchise was formed in the year 2008 for 84 million USD by the GMR group. In the year 2018, Jindal South West (JSW) brought a 50% stake in the team for 77 million USD.

These are the few ways by which IPL franchises make money.

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