Indian Premier League is the richest and popular cricket league. The last season the matches were played without spectators and in this season also, matches will be played behind doors. So, How IPL Franchise Owners make Money? and why there is a need to conduct the Indian Premier League in these difficult conditions?
During the pandemic period, All Team owners are ensuring that each player of their team will follow Covid related protocol announced by the Indian Premier League Governing Council. Franchise ensuring quarantine period of players by booking hotels and taking care of players in boi-bubble. IPL Team owners are spending a big money on securing Players’ safety from the Pandemic. Why are Franchise owners spending so much money on these things?? We will give you an answer to these questions. And we will also prove- Is owning an IPL team profitable?
How IPL Franchise Owners make Money
The franchise makes money through various modes in the Indian Premier League. We will discuss them one by one.
How IPL team Owners make Money- Broadcasting Rights
The constant and fixed income of source for All Franchise owners is Media Rights. The Team owners earn more than half of their revenue through this mode. This is the biggest revenue source for most of the Indian Premier League’s teams. In 2018, Star India owned by Global media signed a five-year contract with BCCI for broadcasting rights in India for a huge amount of Rs.16374.50 crore. The revenue collected from this contract will be distributed among All IPL Teams.
How IPL Franchise Owners make Money- Ticket Sales
Franchise owners hold a major portion of the income generated from selling match tickets. As per the report, team owners generate around 10% of their total revenue from Indian Premier League by Ticket sales. They have all rights regarding setting the price of the ticket. Each team is entitled to host a minimum of 7 home matches. However, this year games will be played without spectators and Team owners will not make money from this mode this time.
How IPL Franchise Owners make Money- Sponsorship
Through sponsorship IPL team owners also collect revenue. The revenue generated from the Title sponsor is divided among Teams. Currently, Vivo is the IPL title sponsor. Vivo had signed five years contract between 2018 to 2022 for a whopping amount of Rs.2199 crore. Apart from the Title sponsor, each IPL team tie-up with brands for sponsorship. All teams have sponsors for everything.
How IPL team Owners make Money- Merchandising
Over the years, Franchise owners earn a significant amount by selling Merchandise. The merchandise includes sports equipment, replica jersey, cap, wristwatches, etc. Apart from selling Merchandise, teams are tie-up for brands like Kolkata Knight Riders tie-up with Wrogn for their merchandise.
How IPL Franchise Owners make Money- Prize Money
Prize Money is also a source of income for teams. The team which wins the IPL title gets the largest share. The remaining amount is divided among other teams as per their standing in the points table. The Prize Money was reduced in the last season due to Covid-19. In IPL 2019, The team that team won the tournament got Rs.25 crore, the runner-up team got Rs.12.5 crore, the third-place team got Rs10.5 core and the 4th place team got Rs.8.5 crore as Prize Money. This is how IPL owners make money.
Is owning an IPL team profitable?
Indian Premier League is a hugely popular league and a good platform for sponsors to popularize their product via contract with teams. You have seen that players were brought by Franchise for a whopping amount and every year new record is created during the Auction. Many times we have seen that the IPL team that did make it playoffs, makes more money than the playoff teams because of their popularity. IPL Teams made a profit every year irrespective of their performance in the Indian Premier League. However, their brand value may vary with their performance in the Indian Premier League.
BCCI is planning to expand the number of IPL teams to 10 in the next year, Many big names in the country want to purchase a new teams in the Indian Premier League. (source)