Teams do not play for prize money in IPL: Earning crores even if they do not reach the playoffs…But 20% must be given to BCCI

10 teams, 70+ matches and 52 days of epic… IPL 2023. The fair of applause and dazzle of money is over now.

Out of the 10 participating teams, one champion got a prize of 20 crores. Three more teams that reached the playoffs also received cash prizes.

But the remaining 6 teams returned empty handed!!!

No, actually it is not. Prize money is only a small part of the earnings for the teams participating in the IPL.

Every team participating in IPL which has crossed the brand value of 70 thousand crores is getting rich.

Today we will tell you how these IPL teams are formed, what needs to be done to become a team owner? And then what is the math of earning?

Know, the complete economics of the IPL franchise…

First understand, how the IPL teams are formed

The owner of the team is decided in the auction… A valuation of 3000 crores is also necessary to participate in the auction.

BCCI decides when to add new team in IPL. The ownership of the team is decided through auction. But not everyone can participate in this auction.

The first condition for participating in the auction is that the valuation of that person or group should be Rs 3000 crore or more.

Those who fulfill these conditions send the application to BCCI through e-mail. It is the BCCI that decides who among the applicants should be allowed to sit in the auction.

8 teams were formed in 2008… 2 more added in 2022

In the first season of IPL i.e. in 2008, teams were announced in the name of a total of 8 cities. Then different companies bought the teams by bidding.

In 2008, the BCCI had kept the base price for the auction of the teams at Rs 379 crore. Maximum Rs 850 crore for Mumbai.

In between, the BCCI started Pune and Kochi teams after Rajasthan and Chennai teams were banned. But later these teams were disbanded and Rajasthan and Chennai returned to the league.

In 2021, it was announced to add two new teams to IPL. The auction for these teams named after Gujarat and Lucknow was held in Dubai. Adani Group, Torrent and Manchester United also participated in it.

The Gujarat team was bought by the CVC Capital Group, while the Lucknow team was taken over by the RP Sanjiv Goenka Group. BCCI got a total of 12 thousand crore rupees in exchange of two franchises.

The condition of the franchise was not always good… Deccan Chargers was unable to pay even the players

The initial years were not very good for the team owners. The cost was high and the profit was very less. The condition of Deccan Chargers, a team named after Hyderabad, had become such that there was no money even to pay the players.

After this, BCCI auctioned Deccan Chargers again and it came as a new team in the form of Sunrisers Hyderabad with Rs 450 crores.

Now money is pouring in, Mumbai’s brand valuation is more than 10 thousand crores

The brand value of IPL teams doubles every year. Mumbai Indians, having won the IPL title 5 times, is the most successful franchise of this league. This is the reason why the brand value of the team is also more than Rs 10,000 crore.

Actually, the scale of increasing the brand value of any team is its best performance in the league here. This is the reason that in 2023, Chennai is second in brand value after Mumbai. Because even in winning the title, that team is one notch below Mumbai.

Now know from where the IPL teams earn money

The biggest part of the teams’ earnings comes from the central pool.

70 to 80% of the earnings of the teams comes from the Central Pool of IPL. Central Pool means earnings from media rights, title sponsorship and other sponsorships of IPL.

50% of this earning goes to BCCI. Out of the remaining portion, around Rs 45-50 crore goes towards prize money.

The remaining amount is divided among the 10 franchise owners. This amount is divided according to the popularity and performance of the franchisee. The team which is more popular, its share is also more.

Another big part of earning comes from sponsorship… Team can sell 10 spots on jersey to sponsor

When you are watching IPL, what is the first thing that catches your eye? On the big and small logos on the player’s jersey?

Actually every IPL team can sell sponsor for up to 10 spots of a jersey. The rates of these sponsor spots are fixed according to the visibility on the camera.

The sponsor you see on the front of a team’s jersey is called the principal sponsor.

Different deals for each spot on the jersey

Apart from jersey sponsor, brands can also become official partners of the team.

For this deal, he has to pay 80 lakh to 3 crore rupees annually.

Chennai Super Kings is one of the star team of IPL, so TVS group had to pay Rs 100 crores to get its principal sponsorship for three years.

Each team earns by selling tickets for matches held at their home ground, also earns from team merchandise.

Every team in IPL has a home ground. Every team has 7-8 matches in a season at their home ground.

The ticket rates for these matches are decided by the team itself. The earning from the ticket is also of the franchisee. Along with this, teams also sell merchandise such as jerseys, caps, glasses and bags with the team logo.

Ticket sales account for 10 to 15 percent of a team’s revenue.

Now see how the earnings of IPL teams are spent

Teams give 20% of their total earnings to BCCI

Each IPL team can keep only 80% of its total earnings. He has to give 20% share to BCCI. This amount is separate from the franchise fee that the owners pay to the BCCI after winning the team in the auction.

Teams spend on buying players in the auction

Each franchise can keep maximum 25 and minimum 18 players by adding retained players to their team. Any team can have a maximum of eight foreign players.

The number of foreign players retained decreases from eight. In 2022, Punjab Kings retained the least number of two players, so the team had the maximum number of 23 slots vacant.

90 crores are spent on annual player salary. This amount is fixed for all franchisees.

From the travel-stay of the team to the expenses of the cheer leaders and support staff, the franchisee

During the IPL, the franchisees manage other expenses ranging from player auction, their travel expenses from one ground to another, hotel booking.

Apart from this, these things come in other expenses-

12 to 15 thousand rupees per match to cheer leaders

After every four-six on the field, the franchise would also give a hefty amount to the cheer leaders to increase the enthusiasm of the players and spectators.

According to media reports, they are paid Rs 12,000-15,000 for a match.

The team of Kolkata gives the highest payment to the cheer leaders. According to media reports, the team gives up to Rs 24,000 per match to each cheer leader.

While Mumbai and Bangalore teams pay up to Rs 20,000 per match.

There was a problem in the initial years, now the team’s expenses are less, profits are more

In the initial years of IPL, there was definitely a problem for the teams. In that period, BCCI also gave financial assistance to the teams on many occasions.

But now things have changed. Every season the teams earn crores only through sponsorship and branding.

Apart from this earning, the franchise owner also gets the players to promote their own brand. That means, apart from earning, there is also promotion of one’s own brand.

In such a situation, running an IPL team has become a lucrative deal for the business houses. Only then the owners agreed to pay up to 12 thousand crores for the teams of Gujarat and Lucknow.

Looking at the increasing popularity of IPL in the coming days, the earnings of the teams are expected to increase further.

Graphics: Harshraj Sahni