The Ultimate Revelation Of Business Model Of IPL

Hello guys.

In today's post, we will discuss about the business model of IPL. We will see how BCCI and team players earn money from IPL - Indian Premier League. What is the meaning of Tata IpL, Vivo IPL, CEAT TYRE s STRATEGIC TIME OUT etc? How do these companies and the channel earn?

Let's begin,

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How does BCCI earn:

BCCI stands for Board of Control for Cricket in India. It is the only representative of the Indian Cricket Team. It is a private company, there is no control government over it.IPL is conducted by BCCI.

Sponsors:

There are two types of sponsors.

Title Sponsor
Official Sponsors

Title Sponsors:

You may have seen that there is always a company name before the IPL name like Pepsi IPL, Vivo IPL, TATA IPL etc. These companies give a lot of money to BCCI for their sponsorship. Like in VIVO IPL VIVO paid ₹440 crores in 2018-19 IPL and in 2022 TATA IPL TATA paid ₹330crores /year for two years.

The paid amount by title sponsors is shared by 50-50% by all teams and BCCI.

Official Sponsors :

Some companies have agreements with BCCI to sponsor their brands using specific methods.

For e.g. CRED is sponsored by CRED Powerplay.

UNACADEMY is Sponsored by UNACADEMY CRACKING SIX.

CEAT TYRE STRATEGIC TIME OUT. The company paid ₹30crores for this sponsorship.

The total amount paid by official sponsors is ₹210 crores.

Broadcasting Rights:

You know that IPL must be played on one single channel. The channel takes the right of Broadcasting IPL in exchange for money. From 2008 to 2017, the Broadcasting Rights of IPL were taken by Sony Channel for ₹820 crores /year and in 2018 Star Sports took the Broadcasting Right of IPL for the next five years at ₹3300cr/year.

If any company wants to run their ad on Star Sports in during an IPL match then the company has to pay ₹14.5 lakhs for running a 10sec ad on Star Sports Channel.

The amount paid by the channel is divided by BCCI and Teams in the ratio of 50-50%.

How Does An IPL Team Earn:

An IPL team can be owned by a private company or by individuals. On average, a Team spends ₹200crores for paying the salary of players, transportation, training and other expenses.

The team earn money from BCCI'S 50% revenue and this is not enough for the team.
Team also earns from sponsors, the brand logos placed on the jerseys of the players is an example of it. On average, there are 10 brand logos are placed on the jersey of the players. These brands pay to IPL team for their sponsorship.

Sponsorship money depends on the team's brand value.
The team takes 80% of the revenue from match tickets. This amount goes to the home team. (Home team:- for eg. the Match is played in Eden Gardens, Kolkata. This means that 80% of ticket revenue is taken by KOLKATA KNIGHT RIDERS). And rest 20% is taken by Home State Cricket Association. Approximately, 4 crores are earned by selling tickets per match.

Merchandises:

Team also earns from the merchandise. Means when you buy any thing of your favorite team for eg. Jersey, mobile cover, cap, wrist band etc. The profit generated by this process is taken by the IPL team.

Prize money:

Final Winner Of IPL=₹20 crores

Runner up team =₹13.5crores

Loser of qualifier 2=₹7crores

Loser of Eliminator =₹6.5crores

This revenue is shared 50-50% by owner and team players.

The brand value of any team increases when:

Team performs good .
Team wins final or qualify for playoffs.
When a famous personality (player) plays for that team.

Benefits of Good Brand value:

More sponsors will be given to the company which leads to good revenue for the team and its owner.
High amount if money is charged from the companies for sponsorship.

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