The stage is set for the upcoming 2023 season of the Indian Premier League (IPL). The first match will be played between Chennai Super Kings (CSK) and Gujarat Titans (GT) on March 31. The battle for the ultimate trophy will involve 20 different franchises.
Whenever the IPL starts, the first question that arises in the mind of fans is how the franchisees and BCCI earn in the world's most expensive league. After all, how do franchisees spend hundreds of crores to earn money in this league? Here are the answers to all your questions.
A three-way flow of income
The earnings in IPL are divided into three types: Central Revenue, Promotional Revenue and Local Revenue.
Central revenue is the money from media broadcasting rights and title sponsorship, which is divided halfway between the board and the franchise. Apart from this, there is promotional or advertising revenue, which the teams earn 20 to 30 per cent of every season.
The local revenue includes ticket sales and the like, with 80% going to the franchises and 20% to the board. Teams earn up to 10 per cent of their revenue from such ticket sales.
Central Revenue
All 10 franchises participating in the IPL earn their main money via the Central Revenue System. In this, money comes through media rights and title sponsorships. When the IPL started in 2008, the BCCI kept 20 per cent of the earnings while 80 per cent was distributed among the franchisees. Over the last 15 years, this has changed and now, the money earned from these rights is divided in half between the BCCI and the 10 franchises.
Advertising plays a key role
Advertisement plays an important role in the earnings of all the IPL franchisees. Sponsorships earn them a lot of money and in return, the advertisements are printed on the players' jerseys, caps and helmets. Money is also made via ad shoots.
How is the money from ticket sales distributed?
All the teams play at least seven to eight matches on their home grounds. 80 per cent of this revenue comes from the sale of tickets and this is by the franchise owners. 20 per cent goes to the BCCI. The income of the franchisees from the sale of tickets ranges from about 10 to 15 per cent of the franchisee's revenue. They also earn quite a bit of revenue by selling jerseys, caps and other player-related merchandise.
How the market value of the IPL has improved
The first season of IPL was hosted in 2008. Since then, the popularity of the IPL has increased in market value considerably. In 2008, the franchises together spent $723.59 million. Since then, the popularity of the league has increased drastically and in doing so, the value of the franchises have gone up as well. In comparison, the two new sides that joined in IPL 2022 — Gujarat Titans (CVC Capital) and Lucknow Super Giants (RPSG Group) — spent a combined $1.7 Billion.
How the money travels from the IPL to domestic cricket
The franchisee pays a fee of Rs 50 lakh for all the IPL matches. So, for seven matches, it costs around Rs 3.5 crores. In this way, the franchisees give 20 per cent of their revenue to the BCCI and the same amount is spent on domestic cricket in India. 20 per cent is around 12 to 15 crores.
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