IPL Business Model – How IPL Make Money?
IPL or Indian Premier League has been the talk of the town for a long time. With many editions coming by every single year, certainly, IPL is the business that many people would like to know more about. With its next edition of IPL running, there’s not any doubt that we are witnessing a little drama on the field for sure.
But, there is just not one single speck of doubt when it is about the Indian Premier League, as IPL is not only about cricket since there is a lot more to name in the first place. In this post, we will look in detail IPL business model and know how the whole system works.
IPL Business model?
The strong business model of IPL doesn’t depend just on ticket sales. They ensure that there’re different other outlets from where they will produce money and sustain themselves. The IPL tournament franchise actually has developed as a valuable commercial property. They provide firms with an opportunity to market as well as advertise their businesses. With this, they will easily earn a good amount of money and continue their IPL session successfully.
The strong business strategy of IPL isn’t just on ticket sales. They generally make huge as they have a lot of extra sources of income by which they will support themselves. An IPL tournament franchise today has become an important business asset. This allows the businesses to market as well as publicise their products and services across the world. They may generate money & continue running IPL because of this. Thus, the first thing you need to know is that 10 teams are the part of the IPL Business Model of 2022 and they are-
- Delhi Capitals
- Chennai Super Kings
- Kolkata Knight Riders
- Punjab Kings
- Rajasthan Royals
- Mumbai Indians
- Sunrisers Hyderabad
- Royal Challengers Bangalore
- Gujrat Titans
- Lucknow Super Giants
For those cricket lovers, there is not any doubt that the Indian Premier League or IPL is the biggest match to watch out for. There’re different teams that are made with the diverse unification of the tournament and players follow Double round league & Playoffs format.
When we check out the IPL format, such a franchise takes lots of money & effort too. Thus, without any doubt that the people have to know everything they need to know about this IPL franchise.
How Does IPL Earn Money?
We all know IPL or Indian Premier League is the most revenue-generating & biggest cricket league in the world. Not just that, in 2014 they reached at number six spot in the biggest sports league. We are now discussing different modes in which IPL earns income.
Sponsors
When we talk about different ways that IPL earn money, there comes one major step, which is the sponsors. The sponsors earn money from the league and franchises.
Also, there is a main sponsor who sponsors this league. For instance, the current sponsor of this league is VIVO IPL and, the team sponsors are the names printed on the player’s jerseys and for whom these players do advertisements. BCCI makes a good amount of income from the title and team sponsors.
| Sponsor | Period | Sponsorship fee (per year) |
| DLF | 2008–2012 | Rs. 40 crore (US$5.2 million) |
| Pepsi | 2013–2015 | Rs. 79.4 crore (US$10.4 million) |
| Vivo | 2016–2017 | Rs. 100 crore (US$13.1 million) |
| Vivo | 2018–2019 | Rs. 439.8 crore (US$57.7 million) |
| Dream11 | 2020 | Rs. 222 crore (US$29.1 million) |
| Vivo | 2021 | Rs. 439.8 crore (US$57.7 million) |
| Tata | 2022–2023 | Rs. 498 crore (US$65.4 million) |
Franchises
The franchises are the primary source of earning revenue. They have got their brand value in this market from where they get a good amount of income, we discuss the brand values of these teams later in this post.
They generally work on two different processes:
- Franchise Rights
- Bids
Broadcasters
When we see the live match or telecast of this league on television and our mobile phones, companies or channels providing us with this live-action have bought their broadcasting rights. There’re television broadcasting rights, which have allowed a channel to stream IPL matches live. It is a primary source of income. But, the funds or money raised is further divided into the franchises and teams.
Tickets
It is a well known and fundamental factor since we know that amount generated in selling tickets is going directly to this league and a certain share gets divided in the stadium and state where this match is played.
Merchandising
Another huge amount of revenue can be raised just by selling this merchandise, as the craze of IPL league in our nation makes the possibility of earning money much higher and easier.
Brand Value
In a way, IPL franchises that earn money can be influenced by their team’s brand value. A team with a high number of star players has a higher brand value. The brand image of Royal Challengers Bangalore or RCB is enhanced by the players like AB de Villiers, Glenn Maxwell, Virat Kohli, and many more.
On the other hand, Mumbai Indians or MI was named as a highly valuable IPL team, with a brand value of over 761 crores. Chennai Super Kings or CSK surpassed Mumbai Indians in terms of the brand value some days ago and became the first team to reach the billion-dollar valuation. When compared to other IPL teams, a team that performs much better gets higher brand value.
Teams
| Team | Owner |
| Chennai Super Kings | N. Srinivasan |
| Delhi Capitals | Sajjan Jindal, G M Rao |
| Gujarat Titans | Steve Koltes, Donald Mackenzie, Rolly van Rappard |
| Kolkata Knight Riders | Shah Rukh Khan, Juhi Chawla, Jay Mehta |
| Lucknow | Sanjiv Goenka |
| Mumbai Indians | Mukesh Ambani |
| Punjab Kings | Mohit Burman, Ness Wadia, Preity Zinta, Karan Paul |
| Rajasthan Royals | Manoj Badale, Lachlan Murdoch, Gerry Cardinale |
| Royal Challengers | Prathmesh Mishra |
| Sunrisers Hyderabad | Kalanithi Maran |
Brand Value of Each Team in IPL
| Team | Brand value |
| Mumbai Indians | INR 2,700 crore (US$354.3 million) |
| Chennai Super Kings | INR 2,500 crore (US$328.1 million) |
| Kolkata Knight Riders | INR 543 crore (US$71.3 million) |
| Royal Challengers Bangalore | INR 536 crore (US$70.3 million) |
| Sunrisers Hyderabad | INR 442 crore (US$58.0 million) |
| Delhi Capitals | INR 370 crore (US$48.6 million) |
| Punjab Kings | INR 318 crore (US$41.7 million) |
| Rajasthan Royals | INR 249 crore (US$32.7 million) |
FAQs
What is the IPL brand value in 2022?
The IPL brand value has recorded growth of over 7% to reach around $4.7 billion, as of February 2022.
How do the IPL Franchises earn money?
When any IPL team wins a tournament, they get additional cash. The huge prize money is further distributed between the players and owners of that winning team. Over 50% of their prize amount should go-to players.
What’s IPL merchandise?
The IPL merchandise includes IPL team t-shirts, jerseys, keyrings, mobile covers, polo t-shirts, caps, chargers, coasters, joggers, wrist bands and many more.
Which’s the richest IPL team?
Mumbai Indians are considered the richest IPL team.
Which is the oldest IPL team?
Chennai Super Kings led by MS Dhoni had some of the oldest players playing in the team whereas Rajasthan Royals had the youngest team players in IPL 2021 when it comes to the average age of players in their squad.
Final Words
But behind the successful IPL business model is the well-executed and planned strategy that mobilizes huge amounts of capital along its right vectors.
The IPL team owners spend vast money on buying players for the teams. Plenty of thought procedure goes into the type of money and investment flow that we see. IPL team owners are quite smart enough to understand the pitfalls as well as have become much wiser with each passing year.
Thus, even after years of being in the showbiz, the Indian Premier League is much bigger and better than before.
