Indian Premier League (IPL) is like a celebration for cricket lovers. Even the League will also feature some of the young cricketers. There will be 10 teams playing in the TATA IPL 2022. So, it will be a complete treat for the cricket fans.
This IPL league of the costliest tournament in Cricket. Because there will be high cash flows during the tournament. In IPL, even foreign players get the chance to play in the league.
Initially, the players are purchased in the bidding. As the bidding amount can raise if the teams want to grab the players. Then the price of money will increase. Therefore, even many players make more money in the IPL comparatively in their home leagues.
So, there will be lots of demand and craze for the IPL. Now, many of us don’t know how IPL teams, franchises, and BCCI make money.
Here in this blog, you will get the answers to
- How does IPL make money?
- What is the IPL business model?
IPL Business model 2022
IPL got started in the year 2008. There was a huge fan base and craze for the game of cricket. Especially in India, there is a huge revenue flow in cricket sports. So, BCCI ( Board of Control for Cricket in India) try to introduce IPL, in the format of the football league.
Then, in 2008 the first edition of the IPL went on with a boom. So, there was huge love and support was given by Indian cricket lovers. Thereafter, the craze and the love for IPL went on Exponentially.
Initially, BCCI offers for private companies to bid on the teams. Then the private companies can bid and can become a franchise in IPL. In the same way, players also bid in the auction. At the auction, each franchise can buy the players with a maximum bidding amount.
Then one can ask How these franchise makes money and be profitable.
Also Read: How to earn from IPL
Broadcasting Rights for IPL
This is one of the mainstream where the IPL business model gains a majority of the revenue. Here, any channel can make a contract of broadcasting the IPL with a partnership with BCCI.
Initially, the SONY channel had a contract for broadcasting rights of IPL. So, SONY purchases the broadcasting rights for 8200 crores for the interval between 2008 to 2017.
The entire amount will be distributed to the franchises of IPL. So, this is one of the ways where IPL franchisees make money.
Now, the present IPL broadcasting rights are with STAR SPORTS. As the contract deal is over 16,347 crores for the duration from 2018 to 2022. So, one match IPL worth is about 52 crores. Even though there are no spectators, BCCI and the franchise enjoy a great deal of money.
Now, TATA IPL 2022 is also featured in STAR SPORTS.
Title Sponsorship: IPL Business model 2022
IPL business model earns money on every other side. Whenever the IPL season starts, there will be a lot of hubs and craze. Every year IPL comes with the title sponsorship like
- DLF IPL
- Pepsi IPL
- VIVO IPL
- Dream11 IPL
All above-mentioned title sponsors give lots of money to BCCI. Only to get their brand name featured in the IPL.
VIVO has given 2,199 crores of the IPL to feature for the next five seasons from 2017 to 2021. But due to India and China border fights made to discontinue the title sponsorship.
So, in 2020, Dream11 India’s largest fantasy company took the title sponsorship deal. Even the contract of Dream11 was for 222 crores for one season endorsement.
Now, in 2022, TATA is featuring IPL title sponsorship. So, TATA IPL 2022 is broadcasting in star sports. TATA has signed the broadcasting rights for 660 crores for 2 years.
These brands spend crores of money for title sponsorship. Even there are a lot of benefits for the brands. Firstly, the brands get recognition and brand identity.
As the IPL will viewing by millions of Indians, brands get the promote their product. Even a brand also sets good and formal trust with the audience. VIVO got a lot of demand in India after featuring in IPL as title sponsors. Even their sales got doubled as well.
Therefore, there is a lot of competition every year for the title sponsors for IPL.
Brand Sponsors: How IPL earns
Another stream of earnings comes from brand sponsorships. After the title sponsorships, brand sponsorships like on-ground sponsors, Official strategic timeout sponsors, and many more.
So, these sponsors are also giving crores of money to the IPL to feature their brands. Now, in TATA IPL 2022, there are several sponsors like
- Official sponsors are Dream11, Unacademy, TATA Safari, CRED, Upstox, Rupay
- The Umpire partner is Paytm
- Digital steaming Partners is Disney Hotstar
In TATA IPL 2022, on-ground sponsors Swiggy, and Rupay are giving 44 crores and 42 crores respectively. Likewise, SLICE Mumbai Indians sponsors are giving 90 cores for the next 3 seasons.
Franchises are also earning from their team. From the match on their home ground, all the tickets sales amount is given to the respective franchise.
Another way, the franchise earns directly from additional sponsors of jerseys. As a spectator, we all have seen many brand names on players’ jerseys. So, all these brands are given a certain amount to their respective franchises for featuring their brands.
Other earnings for IPL franchises
On the ground as well, there will be brands showcased on banners, walls, and around the stadium. Even here also, all the brands will pay for the franchises.
Even franchises can also use their players to endorse another brand in the ads. Here all the players featuring the ads will not charge any kind of amount. Because the franchise has already purchased the players for the season. So, all the extra ads done by players will not take an extra part.
So, here franchises can promote their brand or any other brand in the advertisement.
IPL Business model is great to earn money in all the verticals of the game. So, even in the corona pandemic, where spectators are allowed in the stadium due to government restrictions. Still, IPL manages to make profits in all the above-mentioned points.
Even the final winner in IPL will be awarded 20 crores as a cash price. Then the runner-up gets 12.5 crores. So, these are small amounts compared to the amount from the brands.