The team that wins the IPL in 2022 will get a prize of Rs 20 crore. This amount is a huge amount for the common man but is the value of this amount too big for the IPL team? Let me tell you that the cheapest team in the IPL is Rajasthan Royals whose market value was Rs 250 crore last year. And if the brand value of a team like Chennai Super Kings is Rs 2700 crore, then what will be the value of Rs 20 crore for this IPL team?
The fact is that the IPL you watch on TV is only a small part of the whole game, the real money game is different.
The ICL was established almost a year before the inception of the IPL and its full name was Indian Cricket League. What is special about this is that it was started by Zee Entertainment Enterprises, a private company. The concept of ICL was IPL Javoj, in which teams from different cities would laugh and players from ATM would be bought at auction in the same way as in IPL. But the ICL was not recognized by the BCCI, and neither was the ICC. While many players were going to play in ICL, both BCCI and ICC were against it. To prevent players from going to ICL, BCCI increased the salary of players in their domestic tournament. He also warned that players who play in ICL will be banned by BCCI permanently. The BCCI did not want a cricket league to be run outside of its control.
BCCI launched its Cricket League on September 13, 2007 under the name IPL (Indian Premier League). Lalit Modi was the Vice President of BCCI at the time under whose auspices the entire tournament was organized. He said that he did not take any inspiration from ICL. The idea came to him long ago. The idea has long been popular, such as for English Premier League football and basketball in the NBA USA. The first season of the IPL was played in April 2008 and the players were banned from playing in the ICL so the ICL came to an end, and the last season of the ICL was played in 2009.
After reading all this, you must have understood that BCCI is at the center of the whole business model. The Governing Body of IPL today is BCCI. But if the ICL tournament had run, its governing body would have been Zee Entertainment today. You may be surprised to know that BCCI is considered a private entity, as the government has no direct control over BCCI. The ICC (International Cricket Council) considers BCCI to be the only representative of India for cricket, and for this reason BCCI runs cricket in India.
Apart from BCCI, there are three other main elements in the business model of IPL, first Broadcaster, which you watch IPL on the TV channel, second IPL Team owned by a Private Company or a Business Man or a Celebrity, and third Sponsors, Private Company Sponsors IPL and gives advertisement. BCCI is the fourth element in the IPL Business Model which is the Governing Body of IPL.
BCCI has two main sources of revenue.
SPONSORS AND BROADCASTER
The first source is Sponsors. There are also two types of sponsors, the first of which is Title Sponsors . When IPL started it was called DLF IPL, then it was called Pepsi IPL, then Vivo IPL and now it is called Tata IPL. So the brand name used before the name of IPL here is called Title Sponsor. Thus these Brands pay a huge amount to become a Title Sponsor. In the year 2022, it is estimated that Tata will spend Rs 330 crore in one year. BCCI keeps half of the money from title sponsors and half of the money goes to the owner of the IPL team.
Now let’s talk about the official sponsors of IPL. The brand that sponsors another item of IPL is called Official Sponsors like CEAT TYRE has sponsored Strategic Break, for which they have given Rs 30 crore to name CEAT TYRE in Strategic time. CRED has given money to take its name at the time of power play like CRED Power Play. Thus BCCI gets a total of Rs 210 crore from all brands. Here again BCCI keeps half of the revenue and half of it goes to the owner of the team.
Rights to Broadcaster
Another major source of BCCI’s revenue is selling rights to a broadcaster. Every TV channel wants IPL to be aired on their TV channel which will get more viewers and the TV channel can earn more Advertisement money. BCCI gives these rights to Broadcaster in Money Exchange. These rights were with SONY during the first ten years of IPL. From 2008 to 2017, SONY TV spent Rs 8,200 crore. And Star Sports of 2018 bought these rights for five years at a cost of Rs 16,400 crore.
Here too BCCI keeps half of the revenue and gives half to the owner of the team.
Now if Broadcaster should be sidelined then what happens to the money that it spends Rs 16,400 crore. So let me show you that it also recovers money and earns profit on it. Because if you want to give an advertisement during the IPL match in 2022 on Star Sports, you have to pay 14,50,000 rupees even for only 10 seconds. So in this whole process TV channel also earns money.
Now let’s see how an IPL team makes money. The IPL Team is owned by a Private Company, or a Private Individual who is a Big Businessman or a Celebrity who buys this IPLTeam. There are many things to spend money on after buying an IPL team. Players have to spend money to pay their salaries while buying, all the expenses incurred for their training for the transportation of the players are borne by the IPL team. The estimated cost of an IPL team is estimated at Rs 200 crore.
Now if you think that the winning team gets Rs 20 crore and the average cost of one team is Rs 200 crore, then do the players play for the winning amount? You will also find the answer to this.
One of the income of IPL team shows that BCCI gives half of the money that BCCI gets from sponsorship and from Broadcaster pair to this team. But apart from that, IPL team also earns money.
Sponsors are also the main source of income of IPL team. Brands that put their logo on the team’s T-shirt. An IPL outfit has a logo of about 10 Brands. So these brands are giving money to the IPL team here to get their branding done. When you go to the stadium to watch a match, the IPL team gets 80% of the money from their tickets.
Apart from this, IPL team also earns money through Merchandise. IPL Merchandise can be of many types like T-shirt, Keychain, Cap, Mobile Cover. And last but not least, the winnings are huge. The team that wins IPL 2022 will get Rs 20 crore, and the runner-up team against it will get Rs 13 crore. The team that loses Qualifier 2 will also get Rs 7 crore, and the team that loses Eliminator will also get Rs 6.5 crore.
Let me tell you that half of the winning amount goes to the owner of the team and the other half is shared equally among the players of the team.
If you look from the side of Players, you don’t just play IPL to play, but each Player has a different Brand Value. And the more Famous Player gets more money when the auction takes place.
Now if you look at this entire IPL Business Model from the perspective of an IPL team, I have shown you that the amount of victory is only Rs. 20 crores. And if the estimated cost of an IPL team is Rs 200 crore then why do the owners of the team buy the team and why do they want their team to win the IPL. So let me show you that the brand value of the team is important here. In today’s time, the brand value of an IPL team has started going beyond 2000 crores. So now you know that an IPL team not only wins the match for Rs 20 crore but winning the match increases their brand value and more people will support the team and hence their popularity will increase and for this reason sponsors will also increase the team. Will get. And the team whose brand value and popularity is more, the sponsors also give more money to the team to promote their brand.
Many teams here sell their stake to a private company like CSK has 6.04% stake in LIC. Rajasthan Royals has sold its 15% Stake RedBird Capital Partners.
So this is how the Business Model of IPL works.