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How Does an IPL Franchise Make Money: A Dive into the Cricket Carnival!

Here's a look at how the franchises make money and why owning a franchise is profitable.

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The IPL management has roped in some of the best businessmen in the country as the owners of their franchises.

The Indian Premier League has set the stage for fire from the day of its inception. This league is the brainchild of an “Economic Artist” in the form of Lalit Modi. From the heroics of Brendon McCullum in the very first game of the IPL to the carnage of Andre Russell in the recent, the league has risen to new heights. But why does an engrosser invest in or own an IPL team? How is it beneficial for them? Or in other words, does an IPL team make money?  

At several occurrences, we have come across businessmen owning an IPL team. Be it Ness Wadia for the Punjab Kings, Parth Jindal for the Capitals, or our very own Mukeshbhai for Mumbai! It seems likewise businessmen have entered into this glamorous and fascinating world of sport. So here are discrete ways in which an IPL franchise makes money: –  

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Media Rights: –  

The management of Star TV India is seeking to retain the rights after 2022 as well!

Media Rights make up most of the income of an IPL franchise. To broadcast the games, each broadcaster has to bid a certain amount. From 2008-2017 it was Sony Networks and Entertainment who had taken the rights for a whopping 8200 crores. Making it 820 crores per year. But this is just the beginning. For the next 5 years, Star TV Network bagged the rights for a humongous 16347 crores. The amount now skyrockets to a jaw-dropping, heart-stopping 3269 crores. Of these 20-30% are raked in by BCCI while the other is distributed equally to the franchises.   

Sponsorships: –  

Sponsors are the heart of a sports club. A jersey without the tag of the sponsor seems meaningless! While cherishing the fact that Chennai won the IPL for 2 consecutive years we also come across “Aircel” being their sponsor for those years, isn’t it? Mumbai promotes Jio while Delhi promotes JSW! Both the teams promote the corporations of their owners because these sagacious businessmen know that marketing via a sports team will turn the paychecks in! But sponsorship also depends on the team’s performance. One can’t forget the fact that the Deccan Chargers couldn’t find a sponsor in the second season of IPL after they just managed to win 1 game in the first season!   

Ticket Sales: –  

Mumbai Indians and their “Sea of Blue” is famous for their passion!

Matchday Ticket Sales are another significant source of income. Our countrymen are supremely passionate about this game and never miss an opportunity to visit the stadiums! Even if the ticket prices are as high as 3000-4000, the layman will make sure to be present in the stands to support his beloved cricket star! Simultaneously sales of food items and beverages also add to emolument. Of the total amount 40%-50% is handed over to the local cricket association and the rest goes to the franchise.   

Player Trade, Merchandise and Prize Money: –  

How amazing is it to buy the latest jersey with the name of your beloved cricketer and flex in front of your friends? “Tendulkar 10”, “Dhoni 7”, “Virat 18”, etc the list goes on. Be it caps or cell phone covers the franchises earn a noticeable sum of cash from merch sales. Player trade is the next most valued asset. Mumbai Indians had bought Hardik Pandya for 10 lakhs and currently, his market value is 11 Crores!! They also bought 2018-star leggie “Mayank Markande” for 20 lakhs and sold him to Delhi for 2 crores. Such smart deals help in contributing to the economic arsenal. And last but not least is prize money. For the team that wins the league, the prize money is 20 crores. While for the runners-up it is 12.5 crores.  

To conclude I would say that to be a successful IPL franchise you do not need to be supremely successful on the field. For instance, of all the franchises, it is Kolkata Knight Riders that earn the most profit of approximately 22 crores a year. And last but not least we need to realize that behind the closed doors of this electrifying, compelling, and gripping cricket extravaganza is a big economic framework that forms its strong foundation!   

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