IPL 2024: The Indian Premier League (IPL) has emerged as one of the biggest brands in the Indian market, and even across the globe. Since its inception, the tournament has taken an upward route to gain massive numbers of cricket viewers from all corners of the world. Even in monetary terms, the IPL has made huge strides and has levelled to compete with the football giants from the West in a very short period of time. But the serious question is, how does IPL make money? or How do the IPL Teams make money? We will discuss more of this in this article.
Indian Premier League (IPL) began in 2008 with a masterstroke plan to bring out the best cricketing talent from all parts of India, and it has been successful in achieving its goal. While IPL exploded in the market in 2008, there were other cricket leagues as well across the globe, that had stepped into the arena.
However, one basic idea that kept IPL’s exclusivity untouched is the policy to not let Indian centrally contracted players participate in the overseas cricket leagues. The rule may look simple, but it did wonders in the Indian Premier League.
As a result, the Indian fans waited for a year-long to see their favourite players play against each other and with the overseas player as well.
With such exclusivity around the Indian players, the Indian Premier League (IPL) was bound to explode thereby attracting big money as well. Since the beginning of the tournament, it has had an upward growth in all aspects – performance, popularity, success and money.
It can now be said that IPL is probably one of the only businesses that is immune to the global pandemic and rising inflation. The massive cash flow involved in it makes it one of the wealthiest business affairs in the country, as well as outside the country.
The IPL’s stocks have soared over the years. After its inception in 2008, IPL quicky surged to a billion-dollor mark, making it to the elite list of India’s very few unicorns. As per the latest data, IPL is world’s second most valuable sporting league and is only behind the NFL.
Data shows that IPL was valued at $10.9 billion in 2023, which is 433% increase since 2008. From 2021 to 2023, IPL has doubled on its market value from $4.7 Billion to $10.9 Billion in 2023.
Notably only did the IPL made its mark and grown overs the years, the concerned partners of the tournament – its franchises – have also witnessed surge in their brand value.
As per a report published on India Today, Reliance Industries backed Mumbai Indians (MI) has emerged as top teams in the tournament with a valuation of $87 Million. MI is followed by Chennai Super Kings ($81 Million), Kolkata Knight Riders ($79 Million) and Royal Challengers Bangalore ($70 Million).
So far we have seen how IPL has evolved over the years and its insane growth story. But the big question ahead is how is IPL earning money or how an IPL team makes money? What’s the business model of IPL franchises? Let’s take a deep dive into it.
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How an IPL Team Makes Money
There are different channels from which the IPL teams earn money. The revenue of IPL teams/franchises can be roughly divided into six different streams. Each franchise has its different sponsorships, stakes, merchandise and other streams.
Below are a few major sources from which IPL teams earn money.
- Media Rights
- Ticket Sales,
- Merchandise,
- Selling Stakes
- Sponsorship
- Prize Money
Media Rights: The BCCI organises an auction for the sale of media rights of the IPL a specific time period. The media rights involve all the broadcasting rights as well as telecast rights which are awarded to different/same businesses. IPL teams get close to 40-50 percent of the media rights revenue from the BCCI.
For reference, BCCI’s latest media rights were sold at INR 48,390 Crores for combine TV and digital platforms.
Prize Money: The BCCI also rewards the top performing teams in the IPL. The winner of the tournament take home INR 20 Crore while the runner-up fetches INR 13 Crores. The third and fourth ranked teams get INR 7 and 6.5 Crores respectively from the cricket board.
Sponsorship: Besides the media revenue which the IPL teams get, it also gets a significant chunk of its revenue from the brand deals or sponsorships. The team jerseys have different areas where an sponsor’s logo is printed, which is chargeable.
IPL teams charge handsome sum from the brands to get featured in the team’s jersey’s during the IPL season. The bigger the logo, the more the revenue earned from it.
Ticket Sales: IPL teams also earn a sizeable amount from the sale of tickets in their home venue. While some portion of it goes to the sponsors and the BCCI, most of it rests with the home franchise.
Merchandise Sale: Another source of revenue for IPL teams is the sale of their official merchandise. Teams offer their limited edition official jerseys to the fans, which amounts to a significant sum in the team’s revenue sheet.
Selling Stakes: As the IPL teams gets bigger, their brand value will increase which will lure the big businesses across the world to invest in the tournament. One of the ways to invest in the IPL is by getting some stakes in the IPL franchises.
The big instance of it is when Jindal Steel bought 50 percent shares of the Delhi Capitals (DC) for a sum of INR 550 Crores from GMR group.
There are a few streams or channels from which the IPL teams make money in the Indian Premier League.
