The biggest cricket league in the world IPL has started. The super action of cricket will continue for the next two months. Players across the world yearn to play the tournament due to its opulence. IPL is known for raining money. Since the first season in 2008, both the popularity and earnings of IPL have been increasing continuously. The huge money involved in this tournament baffles minds of many. In this article, we will see how much money is involved in the grand tournament.
Earnings in IPL:
The entire game of IPL is synonymous with money. Every part of it generates huge revenue for both the BCCI and the team owners. There are three brackets under which earnings can be classified.
- The Central Revenue component accounts for about 60-70 percent of the total earnings from IPL. There are two important sources of earning from central revenue which include media or broadcasting rights and title sponsorship.
- Advertisement and Promotional Revenue makes a share of about 20-30 percent.
- The remaining 10% of the total earnings come from local revenue. This includes earnings from tickets and other things.
From above, we have understood the share from different sources. Now, let’s delve deeper and see how much this amount is.
Media or Broadcasting Rights:
Since the beginning of IPL, the most important means of earning has been earning from its broadcasting or broadcasting rights. Broadcasting rights mean that IPL matches will broadcasted only by the channel, which has the rights to it. From the beginning of IPL i.e. 2008 till the next 10 years i.e. 2017, its broadcasting rights were with Sony, which had given Rs 8,200 crore to BCCI for this.
In 2018 Star Sports won the bid. Star bought IPL broadcasting rights for 5 years from 2018 to 2022 for Rs 16,347 crore. Media and sports experts believe that IPL media rights can be sold for 30 thousand crores for 2023-2028.
Out of this broadcast revenue share, BCCI used to keep 20% of the earnings from broadcasting rights, and 80% of the money was received by the teams, but gradually it increased to 50%-50%.
Title sponsorship is also a huge source of income for IPL teams. Title sponsorship means getting your name added before IPL like- DLF IPL, Pepsi IPL, Vivo IPL, and now Tata IPL. Brands spend a lot of money to get their name added in front of the title of IPL, because it gives a lot of benefit in the promotion of their brand.
DLF, one of the country’s largest real estate developers, bought the title sponsorship rights for Rs 200 crore for five seasons from IPL 2008 to 2012. After this Pepsi spent Rs 397 crore for the next five seasons. However, Pepsi parted ways in 2015, two years before the completion of its deal. Later, BCCI sold these rights to Chinese smartphone company Vivo for two seasons for 200 crores. Vivo then bought these rights for 2199 crores for five seasons from 2018 to 2022, but due to the India-China dispute, Dream11 became the title sponsor in 2020 and gave 222 crores for it. In 2021, Vivo made a comeback and bought the title sponsorship for 439.8 crores. For two seasons in 2022, Tata won the title sponsorship and spent Rs 600 crore for it.
If we conclude the maths of central revenue, on distributing these earnings equally between the BCCI and the teams, the 8 teams earned about Rs 1156 crore annually, that is, each team would earn Rs 230-240 crore annually from the central revenue.
Advertising and Promotional Revenue:
Teams earn a lot from advertising and promotion. Teams have their own business model of earning money. Under this, they enter into agreements with many companies. For advertising and promotion, companies offer money to teams for players and umpires’ jerseys, helmets, wickets, names, and logos of companies appearing on the field and boundary line, etc.
Teams also make money by selling merchandise such as T-shirts, caps, globs, etc. Bearing their names and logos. According to reports, teams like Mumbai Indians earn up to Rs 50 crore every year from advertising and brand promotion.
The third source of income for IPL teams is the tickets sold on the ground. Tickets sold in a match earn around Rs 4-5 crore. 80% of this money goes to the home team. That is, from every match, the teams earn around Rs 3-4 crore from tickets.
How much do teams spend?
IPL teams spend around Rs 90 to 100 crore on players’ fees every year. Besides, teams spend Rs 35-50 crore every year on the operation cost, which includes flight and hotel stay of the players. Combining these two expenses, the teams spend 130-140 crores every year.
Also, for organizing every match, the teams have to pay Rs 50 lakh to the state association. Apart from this, teams have to give 20% of their total earnings to BCCI, which works out to about 25-30 crores according to the earnings of the teams.
Profits made by teams:
As we have seen above, IPL teams earn about 300 crores every year, if we deduct the expenditure of about 160-165 crores, then teams earn a profit of about 130-140 crores annually.
IPL prize money is also a means of earning top-4 teams. In 2021, the winning team got Rs 20 crores, the runner-up got Rs 12.5 crores. At the same time, the third and fourth-ranked teams got Rs 8.75 crores each. The team owner gets 50% of the prize money, while the remaining half is distributed among the team.