“Money is round, it must roll” – Impact and Revenue model of 2 IPL Teams Addition #IPL2022

BCCI’s money metre is going to be overloaded and will go beyond the scale by the arrival of two more IPL teams.

Initially, the motto of IPL was to act as the meeting point of talent and opportunity, but from then it became the biggest money-making machine for BCCI. Approximately 60 percent of its income is from this cricket carnival IPL, which is nearly half of what ICC is earning in an entire year. Now, one can easily figure out why the same BCCI which is ready to postpone the Ranji trophy series is not ready to do the same with IPL for any reason. It is crystal clear that in the account tally sheet, if the Ranji tournament has to be engraved on the expenditure column, IPL has to be inked on the income column in bold golden letters. Yes! IPL is the golden goose that lays diamond eggs for BCCI.

Now the questions around this current season are, How much is going to be added more as extra tips to BCCI’s pocket just by the arrival of Ahmedabad and Lucknow teams??? How much more the broadcasters are going to gain out of it? To any extent will it reduce the revenue of individual teams??? To understand this we need to know how BCCI franchises and broadcasters are making revenues out of different avenues through IPL.

BCCI is getting its lion’s share in IPL, mainly through the auction of franchise rights as we all know. Other than that central revenue local revenue including ticket sales also help them to make money, Let us throw light on a few of them.

For BCCI, the income from the central revenue is obtained in two different ways – media rights and then from title Sponsorship. Media rights is a big fat fish. The cold digital war between, Star India and Sony entertainment for broadcasting rights of IPL is a very long story. Right from the inaugural season till 2017, Sony was holding the media rights and BCCI had roughly got 8000 crores, in that time slot from Sony. When Star India got its media rights for the next five years from 2018 to 2022, the business has grown even better for BCCI, obtaining more than 16000 crores through the media rights alone. 

This time the fight for media rights is even more intensified as Reliance Viacom 18 and Amazon are also expected to go for a head-on collision with Sony and Star to grab it at any cost. The addition of two more teams had enhanced the value of broadcasting rights manifold. The entry of new teams had already increased the number of matches from 60 to 74. As dividing the teams into Two groups and playing with that set-up is not an attractive pattern and has its drawbacks, BCCI is also having the idea of getting back to the round-robin method in 2024, which means 94 matches will be played in a tournament. So definitely this will increase the overall profit of the broadcasters also.

This has one more face too. Star network had revealed that for the opening match of the 2021 season, the viewership was increased by 43 percent, when compared to 2019. BARC (Broadcast Audience Research Council) India viewership data also highlighted that nearly, 405 million viewers were watching the IPL tournament last year, which is nearly half of the number of televisions in India. The addition of two teams going to bring more and more viewers from those two states also into the circle. So, what else can be the common platform for marketing the products? This will make the war for media rights severe and on the whole, BCCI is going to be benefited from this. The president of BCCI, Sourav Ganguly had guessed that it may be around 35000 crores. But it is estimated that BCCI will harvest the income of at least 40000 – 50000 crores.

Next comes the title Sponsorship, Tata which recently conquered Air India had grabbed the IPL title sponsorship too, to attract the young blood. In the first season, DLF had offered 40 crores to BCCI for the Title Sponsorship, but this time Tata replaced VIVO, by paying 670 crores for two seasons. This number game clearly explains how far the IPL has evolved in this one and half-decade. If things go on well with these 10 teams, in future it may be extended to 12 teams even as per BCCI’S plan and that will invite more companies to come forward for an even greater bid too and thus overall raising the brand value of IPL. And that is the reason why even though Tata had the idea to hold the title sponsorship for a few more years, BCCI did not agree to it as they expect the introduction of these two teams to increase the goodwill. So two years later BCCI can get more gain.

Now, let us understand how does the media is filling its pocket from this money mela. As the biggest annual sport, IPL is dragging more viewership and it is one among the best stage for any sellers to sell their products. During the previous season, Star network had fixed a price of 12 and a half lakhs, for every 10 seconds for an advertisement. Just think over, how much money Star would have made, in a match and also in the season which lasts for nearly 50 days! The star network’s strategy of multilingual broadcasting also helped them to improve their business and year by year it yielded them more profit. In 2019, it was 2020 crores and In 2020 it skyrocketed to 3000 crores and last season, it was above 3600 crores. 

Now, more matches will result in, even more profit for the new broadcaster. But one particular bothering point for the broadcaster is that the past says that the afternoon matches will attract only fewer viewers. At the same time, an increase in the number of matches should not lead to two matches scenario, because it may result in the sharing of the viewership among the two matches. So, doubleheaders or simultaneous matches must be avoided according to their perception. But that may result in the IPL window being opened for nearly two months, which will interfere with the schedule of international matches. It will not leave any other choices to overseas players other than leaving, in the middle of the season, which may affect the momentum of the tournament itself. So, it is going to be very interesting to see how BCCI will deal with this problem. 

Last but not least, let us know how the team franchises are making money out of it. The ticket sales of the home matches are helping the team to make a bag of bucks. About 4 crores are estimated to be earned by each team, from just one match. Other than this, jersey sponsors, merchandise sales and local sponsors also aid the money hunt. So again the increase in the number of matches will boost their revenues. 

Altogether, BCCI shares nearly 50 percent of the amount it earns from media rights with its franchises and in turn, at the end of the tournament, the franchises share 20 percent of their earnings from ticket sales with BCCI. So now one may wonder as the money from media rights is shared among 10 teams rather than 8 teams, will it affect the individual team’s share. Logically speaking, it may look like it is reduced, but definitely BCCI is going to ascend the media rights money manifold. So no one has to face any loss. Broadcasters are also going to make huge money from the ads and promotions. So overall all the three are going to help each other mutually.

The addition of two teams is going to guarantee the chances for a few more players so that they can showcase their talents to earn an international cap in the future too. At the same time they will get a crock of gold. They can land anywhere between the base money 20 lakhs to nearly 16 crores if they can perform like Pat Cummins. Unexpectedly, even an uncapped player can be sold for a higher price. Two more teams give chances to 50 more players, which means few may reach their turning points, most probably.

The umpires in IPL are generally earning from Rs. 59,000 to Rs.1,98,000 per match depending upon whether they belong to ICC’s elite panel or not. Many may not be aware of the fact that even they too get sponsorships. In the last season, Paytm had given sponsorship money of 7,33,000 to the umpires. No need to mention that more matches will shower them with more lakhs.

From coaches to the ground staff, extra matches will excite them as they fill their piggy banks. The money which BCCI is getting from it can be used to improve the quality of stadiums, domestic cricket and Women’s cricket. Of course, extra entertainment and fun for the audience too.

As it is always said, “Money is round, it must roll!!!”. Here in the case of the IPL festival, it is rolled to fill the gaps and set everything right and act as a bridge for the talented cricketers to meet their opportunities.