The 17th edition of the world’s biggest cricket league has once again gripped the nation’s attention. The Indian Premier League or IPL has viewership levels that match mega sports events like the Football World Cup or Olympics. With millions of people watching the matches on television or smartphones and thousands watching them live in the stadiums, every boundary and roar of the crowd is etched in the memory of cricket fans.  

But what propelled the Board of Control for Cricket in India (BCCI), to start such a league? Well, who could forget Yuvraj Singh’s historic six sixes and a young Indian cricket team under MS Dhoni who won the inaugural edition of the T20 World Cup? Many cricket aficionados see this moment which sparked the birth of the Indian Premier League (IPL) in 2008. 

In a landscape dominated by league sports like the English Premier League and the NBA, cricket found its own epicentre in the IPL. But the IPL is more than cricket – it’s a powerhouse of brand building, business, innovation and commerce. From its humble beginnings, it has risen to become one of the world’s second richest sports leagues after the National Football League (NFL) of the USA as of 2023.  

Hang on as we uncover the business model driving the IPL’s success – an Indian triumph that’s become a global sensation.  

IPL and its valuations  

The brainchild of the Board of Control for Cricket in India (BCCI), the Indian Premier League began in 2008. Starting with 8 teams, it expanded to 10 by 2021. In a remarkable feat, the IPL became India’s first unicorn, valued at USD 10.9 billion a ‘decacorn’ in 2023, witnessing a 28% valuation increase from USD 8.8 billion in 2022. This meteoric rise solidifies the IPL’s status as a global sports powerhouse, captivating audiences with its blend of skill and spectacle. 

IPL and its valuations  

Source: Hindustan Times

Business Model of IPL 

Business Model of IPL 

Broadcasting Rights 

Ever wondered how those thrilling matches find their way to your TV screen or smartphone? It’s all thanks to a behind-the-scenes dance of negotiations and deals between the Board of Control for Cricket in India (BCCI) and broadcasting giants like Disney Star, Viacom 18, and Big Times Internet. 

In the year 2023 alone, the BCCI raked in a staggering Rs. 48,390 crore by selling these coveted rights for the next five years. Let’s break down the action-packed packages: 

Package A: This bundle encompasses all the broadcasting rights for television, Disney Star secured this gold mine for a whopping Rs.23,575 crore. 

Package B: In the era of digital dominance, Viacom 18 snagged the rights to display matches on digital platforms like Jio Cinema for a cool Rs.20,500 crore.  

Package C: This exclusive package holds the keys to special matches like the opening match and playoffs, Viacom 18 clinched this deal for Rs.3,207 crore. 

Package D: Taking the game beyond borders, Viacom 18 and Times Internet secured the rights to display matches outside India for Rs.1,058 crore. 

Source: The Hindu 

A Growth of 11.8x in revenue growth from 2008-17 to 2023 by selling media rights.  

So, where does all this money go to? Let’s dive into the financial mechanics behind the scenes. 

Firstly, the lump sum earned from broadcasting rights finds its way into the central kitty of the Indian Premier League. From there, a neat 50% of this money flows into the account of the BCCI, while the remaining 50% is divided up amongst the 10 IPL teams. With about 24,200 crore, each team is poised to receive a handsome Rs. 2,420 crore over the next five years. 

Franchise Auction

Franchise auction money – a crucial component in the IPL’s financial ecosystem. Every team hustling for glory in the IPL must acquire franchise rights, with the entire money directly going to the BCCI’s accounts. Looking ahead, whispers abound of the IPL expanding its roster to 12 teams, a move that promises to inject an additional Rs 15,000-20,000 crore into the BCCI’s already brimming money pool. 

Team200820102021
Mumbai Indians$111.9 million
Chennai Super Kings$91 million
Rajasthan Royals$67 million
Kolkata Knight Riders$75 million
Delhi Daredevils$84 million
Bangalore Royal Challengers$111.6 million
Deccan Chargers$107.01 million
Punjab Kings XI$76 million
Kochi Tuskers Kerala$370 million
Pune Warriors India$333.3 million
Gujarat Titans$632 million
Lucknow Super Giants$932 million

Source: BCCI Annual Report  

Central Sponsorship of IPL 

The IPL lies in two pivotal categories: Title Sponsorship and IPL Associate Partners. 

You’ve likely heard the commentators punctuate the excitement with phrases like “TATA IPL,” where the prefix represents the title sponsorship, a privilege sold by the BCCI. In the year 2024, the BCCI sealed the title sponsorship deal with Tata for a staggering Rs. 2500 crore, spanning the years 2024 to 2028. This remarkable agreement marks a remarkable increase in title sponsorship revenue, soaring by an astonishing 1,150% (11.5x) from 2008 to 2024. 

Source: The Hindu 

As of 2024, Other Associate Partners are Rupay, Angel One, and My11Circle, as of numbers from 2023, IPL earned around Rs 210 crore from its associate partners.  

Source: IPL Website  

Official Strategic Timeout Partner 

In the IPL match, there’s a brief pause for what’s known as the Official Strategic Timeout, a chance for teams to strategize and refresh during the two breaks of 2.5 minutes each in a single inning. In 2023, the IPL earned Rs 30 crore by selling this valuable sponsorship opportunity. 

In the year 2023, the IPL notched up a monumental revenue of Rs 9,978 crore, earning from its sale of media rights, Franchisee fee, Official Sponsor and percentage share from IPL teams, marking a historic milestone in its 15-year journey. This staggering figure reflects the enduring allure and commercial power of India’s premier league. 

The money earned from sponsorships isn’t hoarded but rather shared among the teams. A generous 50% goes to the BCCI, while the remaining 50% is divided equally among the 10 teams. It’s a testament to the IPL’s ethos of collective success, where every team benefits from the league’s thriving sponsorship ecosystem. 

Team sponsorship, merchandise and ticket sales –  

  • Main Principal Partner – This is the primary sponsor of the team, akin to TATA’s role for IPL. For instance, Qatar Airways is the main principal partner of RCB, prominently displayed on jerseys and team assets. 
  • Principal Partners – These sponsors secure space on the team jersey for their brand logos. RCB’s principal partners include JIO, KEI Industries, and Happilo. 
  • Associate Partners – These sponsors represent various categories. Examples include BOAT for earphones, Puma for jerseys, and others like Nippon Paint, Hindware Italian Collection, Mahindra, and Equitas Bank. 

This accounts for 20-30% of the team revenue. 

  • Ticket Sale – Each team hosts 6-7 matches at their home ground. Revenue from ticket sales is divided: 80% to the home team and 20% to BCCI and sponsors. 
  • Merchandise Sale – A small portion of revenue is generated from sales of jerseys, caps, and flags to loyal fans. 


Source: Statista 

Prize Money

The prize money pool of the IPL is Rs.46.5 crore. In which the winning team gets Rs 20 crore. As a price, the runner-up gets Rs 13 crore. The other two teams which qualified for the playoff get Rs 7 crore. Each. This amount was divided between the team’s owners and players. The owners received 50% of the amount won, and the rest was equally divided among the players.  

Conclusion 

As the IPL 2024 juggernaut rolls on for the next one and half months, be rest assured to enjoy nail-biting matches. From a business point of view, we can say that cricket’s passion meets commerce. From strategic sponsorships to thrilling matches, it’s a celebration of unity and innovation, driving commerce and cricket forward. 

FAQs

What was the IPL’s valuation increase from 2022 to 2023?

The IPL’s valuation increased by 28% from USD 8.8 billion to USD 10.9 billion.

How much did the BCCI earn from broadcasting rights in 2023?

The BCCI earned Rs. 48,390 crore from broadcasting rights in 2023.

What is the distribution of prize money among IPL teams and players?

Team owners receive 50% of the prize money won, while the remaining 50% is equally divided among the players.

What is the IPL’s prize money pool for the winning team?

The prize money pool for the winning team is Rs. 20 crore.