The Indian Premier League (IPL) is the most lucrative franchise-based T20 cricket league and one of the most revenue-generating sports leagues in the world. Since 2008, star cricketers from all over the world as well as Indian national cricketers have participated in the tournament. 13 successful seasons of the IPL have been hosted to date by the BCCI.
Since 2020, IPL matches have taken place behind closed doors. It makes you wonder how franchises are making money now without any tickets being sold. In fact, the IPL’s business model is not entirely dependent on ticket sales. Only 10 percent of teams’ income comes from it.
IPL franchises have developed as valuable business properties and they make sure they don’t have to depend on ticket sales to support themselves. There are several other outlets that they can generate money from. The franchise rights were sold at very high prices to private companies. Investment firms, aware of the potential for financial profit, invest in IPL.
IPL has always been a mixture of cricket and entertainment. Investors are aware that the tournament is a major source of entertainment for millions of people and that is why there is no shortage of investments.
BCCI also earns a lot of revenue by selling IPL media rights. About 60 to 70 percent of the revenues generated by IPL are generated by media rights. Networks like Star Sports, Sony Pictures Network pay huge sums to the BCCI for the acquisition of broadcasting rights. The board, after deducting its share, distributes the income between the teams. The team that wins the tournament, of course, gets the higher amount.
The teams participating in the IPL generate a substantial share of the revenues thanks to the sponsorship of the brand. Franchises sign contracts with brands, agreeing to endorse brand logos on their kits. About a quarter of revenue comes from brand sponsorship.
When a team wins the tournament, it earns additional income. 50 percent of the cash prizes go to the players and the remainder to the owners. Teams also sell merchandise such as t-shirts, caps, jerseys, etc. which also add to franchise revenue.
The BCCI, being the legal owner of the IPL, holds the excess profits of the league. Profits are used to modernize cricket infrastructure, organize national cricket, pay national cricketers, etc.
The board contributes INR 12 billion to the GDP of the Indian economy and it goes without saying that most of it comes from the IPL.