Cricket a sport that dated back in 400 years and as of 2021, cricket is officially played in 104 countries worldwide, and its popularity is continuously declined as people are becoming less patient to watch traditional Test formats which last for 5 days. So the new concept of shorter formats which reduces the playing time from days to hours revives a new freshness in the cricket world. With the perfect mix of cricket, Bollywood, and big money IPL is a league of its own. The Indian Premier League or IPL is been around for only 14 years but it’s become the most popular and valuable cricket leagues in the world. The brand value of IPL has almost doubled in the last 5 years. Due to the Covid 19 pandemic and Vivo (440 crores/season) pulling out as title sponsorship and replacing Dream11 (222 crores/season) the brand value of IPL plunges 22 % as per Duff& Phelps, a Kroll Business, which specializes in Brand valuation, said in its report. 

Source : Google

The average expenditure of a franchise per season is around ₹200 crore rupees and the prize money for the winning team is around ₹20 crore rupees only. Then how does franchise makes money?

Central Revenue:  It consists of two main sources one being the Broadcast Rights and other Title sponsorship. Media rights are the biggest financial contributor (around 60-70%) to each franchise. The Broadcast right for 2018-2022 is owned by Star India for whooping ₹16,347 crores for five years of which 50% i.e. ₹8,173.5 crore each is share by BCCI and franchises. Based on IPL team ranking, this amount is distributed among all IPL teams after deducting their annual fees.

Star India is charging around ₹12.5 lakhs for 10 min ad between the matches.

Title sponsorship: Over the years we have seen the title sponsorship changing from DLF, PepsiCo, Vivo, and Dream 11. Vivo has paid around ₹2199 crores for a Five-year contract for Title sponsorship. So that’s another 27.5 crores annually per franchise. Besides VIVO, the co-presenting sponsors for IPL-14 are Byju’s, Dream 11, Phonepe, Just dial, Up stock, cred, etc.. will appear in boundary boards spaces, etc.

Gate Revenue: Just like any other major sports event, the IPL also depends largely on their fans for revenue. Each franchise is entitled to a minimum of 7 home matches which gives them a fair opportunity to generate money, which accounts for around 10% of the total revenue. On average each match generates ₹4 crores rupees of which 80% goes to the home team.

Prize Money:  in 2019, the winners got ₹ 25 crores, the runner up got ₹12.5 crores, the third-place ₹10.5 crores, and the fourth place got ₹8.5 crores. The winning amount would be divided among the team owners and players.

Brand Sponsorship: Franchises partner with brands and offer them visibility by endorsing their logos on their jersey and Kits. The more visibility the sponsors want the more money they spend which is why an IPL outfit has an average of 10 brand Logos- 6 on the jerseys, 2 on the pants, and another couple on the cap.

Merchandise:  Merchandise has been a small part of their revenue model. Every franchise sells its merchandises include T-shirts, Caps, Bags, Watches, Cups, Phone back coves, etc.