The Indian Premier League is undoubtedly the biggest cricketing league in the world. Biggest in terms of crowd engagement, revenue, sponsorship, and budget. What makes it such a massive and huge league is dependent on many factors. Firstly, if we talk about is the population size in India. With a 1.4 billion population, India is the second-highest populous country in the world, after China, and its ever-growing at a fast pace. A second big reason is the madness of cricket in India. Cricket is not just a “sport” in India, it is a religion in India, people are so crazy about this game that they worship players as gods. And lastly, the history. India has always had a very rich history in two sports, one is hockey and another is cricket. Even though hockey is the National Sport of India, it is not even as closely followed as cricket.
The Indian Premier League is not just a sport, it is a business. The IPL brings in massive revenue for the Board of Cricket Control in India. When the IPL was inaugurated in 2008, no one thought it would become such a big event, everyone knew about its potential but none forecasted its success.
It’s not as if there are no other cricket league in the world. The likes of Australian Big Bash, Pakistan’s Pakistan Super League, Bangladesh’s Bangladesh Premier League, England’s NatWest T20 Blast, and many other such leagues, but none come even close to the revenue and viewership that the IPL generates. Not just fans and cricket lovers, but also the players all from all across the globe are mad about the IPL. The reason is simple, Money and Fame. Foreign players are handsomely paid and some are paid so much that even their national board wouldn’t be able to afford the wages which they earn in IPL.
Let’s begin with the various forms of revenue from which the IPL generates money.
IPL Title Sponsorships:
Title Sponsorship is one of the major revue sources for any event in the world and they play a crucial role in the success of the event. For the IPL too, title sponsorships have played a vital role in their success. Major brands not only from India but also throughout the globe who wants to have a market presence in India, target IPL for marketing. In 2008, when it first started, DLF, India’s one of the biggest real estate company was the title sponsor. DLF had a contract for 5 years, in which they had to pay 40 crores per annum, which equals to 200cr for the first 5 years. The first 5 years were also know as the DLF IPL. Then in 2013, came Pepsico, one of the world, largest soft drink and beverage makers.
After 5 seasons, IPL already became a common name in the world of cricket. Pepsico, considering India as its biggest market due to India’s population, won the bid as IPL’s new title sponsor for 397crore rupees and the contract was for 5 years too. This amounts to around 80 crores a season, just double of what DLF was paying. However, just after three years, Pepsico decided to terminate the contract citing the banning of Chennai Super Kings and Rajasthan Royals because of suspicion of match-fixing. The remaining two seasons sponsorship was transferred to the Chinese smartphone market VIVO for 200 crores.
After the expiry of the contract in 2017, VIVO decided to retain the sponsorship as India was going to be the biggest smartphone user in the coming years. VIVO retained the sponsorship for the next five years 2018-2022 for a staggering amount of 2,199 crores. Sponsorship of such amount was never seen before. Just to make things in perspective, it was more than the then-largest sponsorship, the Barclays Premier League 2013-2016 contract. VIVO retained the sponsorship for 440crores a season. From 40 crores a season to 440 crores a season, exactly 11 folds in just 10 years. Such was the magnitude of IPL.
In 2020, as the world came to a halt because of coronavirus, and IPL had to be shifted out of India, VIVO decided to pull back from the sponsorship also because of the rising Anti-China sentiments in India and Dream 11, Indians largest sports fantasy and entertainment company decided to buy the sponsorship for the year 2020 for just 222 crores, half of what VIVO was paying. An absolute bargain. Dream 11 was already a sponsor of the IPL and had roped in many famous players such as MS Dhoni as its Brand Ambassador. The IPL’s title sponsorship just gave a feather to their caps. VIVO hasn’t taken a decision for the 2021 season but we hope that they will return back for the remainder of the contract.
IPL Media Rights:
As with every sporting event, Media rights play a massive role in the success of the event. Not only because they contribute financially, but also because it brings the sport assessable to the people. Not only does the BCCI benefit from the media rights, but the franchises too. For some of the franchise, revenue from media rights are almost 60% of the total revenue earned. The process is simple for the buying of media rights. Media companies bid for the rights, the highest bidder is chosen, then BCCI, after keeping its stake, distributes the rights to the respective teams. There have only been 2 major players in this. The first one was SONY ENTERTAINMENT NETWORK, which won the rights for the seasons 2008 – 2017 for a staggering 8,200 crores, which is 820 crores per season.
The second big player was STAR INDIA, who purchased the rights for the seasons 2018 – 2022, for an amount of 16,347 crores. This comes down to 3,269 crores a season, almost three times of what SONY paid.
IPL Brand Sponsorships:
These are personal brand sponsorships that every team receives. The logos which are seen on the team’s T-shirts and helmets are sold for a huge sum of monies. The team which markets itself well, such as CSK, KKR, RCB, and MI, tends to receive hefty sum compared to the less popular teams such as SRH, RR, DC, and KXIP. Nokia who was the first major shirt sponsor of KKR paid a handsome amount to get that spot. Aircel who was the first major sponsor for the CSK paid 8.5 crores for three years. The BCCI does not earn too much from brand sponsorships of teams, but it’s healthy for them as more and more sponsorships attract newer teams to be added in the future.
IPL Ticket Sales
Ticket sales too play an important role in financing the teams. Franchise is guaranteed a minimum of 8 games on their home ground and teams whose home ground has a massive capacity like the Eden Gardens in Kolkata and the Rajiv Gandhi Stadium in Hyderabad tend to benefit more than teams with lesser capacity. Ticketing sales are shared between the teams and the local cricket association. KKR shares its revenue of ticket sales with the Cricket Association of Bengal and vice versa.
IPL Merchandise Sales
Apart from other forms of revenues, teams also indulge in merchandise sales. Merchandise sales play a small role in financing the teams. Merchandises like team shirts, caps, wrist bands and etc are some of the examples of merchandise the teams sell. And again like brand sponsorships, the team who markets well, attracts a good amount from merchandising. KKR, MI, RCB, and RCB are some of the teams who have the most sales from merchandising.
IPL Prize Money:
Prize money often do not add much in terms of finances, but it shows how well the teams are performing over the years, and better performances lead to higher market value. The winner of the 2019 season, Mumbai Indians received 20 crores and runners-up Chennai Super Kings received 12.5 crores. Mumbai Indian is the most successful team in the Indian Premier League with 5 titles won followed by Chennai Super Kings with 4 and Kolkata Knight Riders with 2. Winning the IPL trophy also adds to the brand value of the teams which in turn helps to attract brands for sponsorships. Currently, the Kolkata Knight Riders are the most valuable team in the IPL mainly because of the association of their owner Sharukh Khan and because of his personality and his personal involvement with the team, KKR attracts big brands. Same is the case with Mumbai Indians. Apart from being the most successful team, Mumbai Indians also has a flamboyant owner in Mukesh Ambani. One exception of this theory is Royal Challengers Bangalore. Previously owned by the then flamboyant owner Mr Vijay Malya, RCB have always managed to attract big names from the market even after being one of the most unsuccessful teams in the tournament.
Everything is not as green as it looks. With big earnings comes bigger spending too. IPL is still believed to be in growing stages with much bigger potential ahead of them. The BCCI is planning to add two more teams for the season of 2022 which will make the tournament bigger than before. For the 2020 season, the BCCI managed to earn a hefty 4000 crore rupees even after the tournament being held outside India and during the pandemic hit year. “The Board managed to cut nearly 35 percent of the cost as compared to the last IPL. We earned Rs 4,000 crore during the pandemic time. Our TV viewership went about 25 percent higher, we got the highest-ever opening game (Mumbai Indians versus Chennai Super Kings) viewership. Those who doubted us came and thanked us for hosting the IPL. Had this IPL not happened, cricketers would have lost one year,” Dhumal said as quoted by the Indian Express.
Let’s hope for the tournament to get bigger and more popular because not only does it bring in financial benefits but also generates employment for a lot of people.