Welcome to the IPL economics 101 💰

by Sreetama


The second leg of IPL 2021 has resumed in UAE & fans are back chanting their favourite team’s name in front of their TV screens. 📺

We are sure that you are praying for RCB to win their maiden IPL title or Mumbai Indians to continue their victory streak. But have you stopped and wondered where does all the money behind this glitz and glamour comes from?🤔

Let us give you a hint, a major part of it comes from you. Even if you don’t buy any match tickets or team merchandise, you still are a major contributor to this multibillion-dollar empire. Wondering how? Let’s hit it off🏏

Welcome to the IPL economics 101💰

Cricket + Bollywood= Recipe for success 🤩

What happens when you marry the two biggest religions of India-cricket and Bollywood? You create entertainment value of the highest order. In 2008, while the world witnessed a drastic stock market crash, the BCCI came up with the idea of commercialising the uber-popular T-20  format of cricket and hence IPL was born.

IPL went on to become not only one of the biggest cricket tournaments but also a hugely successful business ecosystem where everybody wants to get an in. And looking at its last year’s earnings -a whopping INR 4000 crore, IPL’s business model seems to be pandemic proof too.

Looks like IPL is all but ready to give its maiden ted talk

Let’s talk money💰

Check out IPL’s primary revenue sources

Media Rights 📹: One of the most important streams of revenue for IPL. As we mentioned before, you help IPL make money. Let’s put it in perspective. From 2008, Sony had the IPL’s media rights. However, Star India outbid Sony in 2017 to get the IPL’s media rights from 2018-22. Any guesses, as to how much Star India has to bid to secure this coveted right? A staggering INR 16347.50 crore. That’s right. Wake me up when something is missing – you? are done counting the number of zeroes in that figure. 

Sponsorship: You are not just an IPL match between two teams. You also see jerseys caps, stadiums, hoardings and all of these are great platforms for advertising. Companies squander among themselves for IPL’s title and brand sponsorships. Franchise’s tie-up with various companies to promote that brand on and off-field.  We mean c’mon wouldn’t you be more eager to download MPL now that you have seen Shahrukh Khan wearing KKR’s jersey with MPL’s branding on it?

Merchandise, tickets and prize money: The most obvious revenue-generating avenues actually make up a comparatively small part of the total revenue. But hey, when it’s IPL, even a small fraction runs into crores.

The Taxman comes in

IPL is BCCI’s most coveted possession. But when you are making such big bucks, you have to give back as well. As of 2018, BCCI has paid about INR 3500 crore in taxes from the time since IPL started.

This is interesting because earlier BCCI was considered as a charitable organisation and hence was allowed tax exemption. However, IPL is considered as a commercial activity that is bringing in significant revenue to BCCI. So as the rule goes, when you are making profit, you have to give something back. 

The Good the Bad and the Ugly

It’s popularly told that money is the root of all evil. Well, maybe there’s some truth to it. Like every spicy Bollywood movie, IPL has also seen some lows and most of them involve money.

One of the biggest IPL scandals was around Lalit Modi. In case you are living under a rock, IPL was Lalit Modi’s baby. However, things didn’t quite end well for him. In 2010, Lalit Modi was sacked from his position as IPL Chairman on several charges including financial mismanagement and corruption.

The infamous spot-fixing scandal which had famous names like Sreeshant became a huge controversy. In fact, the top management of CSK and Rajasthan Royals were found to have been involved directly in spot-fixing. This led to the suspension of both of these teams from IPL for two years in 2016 and 2017.

So which team are you supporting this time? Do you think RCB will lift its maiden IPL trophy? Tell us in the comments below!

What’s up this week?

  1. Chinese property giant Evergrande is under a $300 billion debt💰
  2. OYO to file for over $1 billion IPO next week
  3. Apple has partnered with UCLA & Biogen to develop iPhone features that help identify depression and other mental health ailments
  4. Volkswagen launches electric car subscriptions

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We got good news. It most probably won’t

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