The Business of IPL

Indian Premier League (IPL) for Board of Control
for Cricket in India (BCCI)

• IPL product of BCCI
• Contributes 95% of revenue surplus to BCCI
• IPL Revenue -1600% greater than other Revenues
• Thus, IPL one stop solution for BCCI.
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Stats credit: https://www.bcci.tv/

Background
• BCCI-Board of Control for Cricket in India
• Formation-December 1928
• Objective: Growth and Development of cricket in India
• Act-Tamil Nadu Societies Registration Act
• Headquarters: Wankhede Stadium ,Mumbai
• Independent Body
• Richest cricket board in the world
Corporate Decision-Indian Premier League(IPL)
Launched on 13th September 2007

Initiated by Mr. Lalit Modi
Licensed by BCCI unlike Indian Cricket League(ICL)
To promote local talents and improve the financial strength of BCCI.
IPL Governing Council-Responsible for all the functions of the tournament.
Strengths
• Financial Strength
• Intellectual Property Rights
• High Margins
• Quality Products
• Diversified Portfolio
• Indirect Promotions
• 2 ½ hr Game
Weakness
• Organization Culture
• Lack of Work force diversity
• Lack of critical talent
• Duplication of Model
• Franchisees Overpriced Promotions

Opportunities
• Increase in Consumer Disposable Income
• Access to International Talent in Global Market
• Merchandising
• Other Boards
• Fan Base
• Developments in Artificial Intelligence

Threats
• Threats of New Entrants
• Squeezing Middle Class
• Other Sports Popularity
• Revenues Based on the Fans
• Government Regulations and Bureaucracy

How does the auction work
• Started in the year 2008
• The IPL auction is a yearly event conducted by BCCI
• How Much Budget Does Each Team get?
• What are the Different Categories of Players in the IPL Auctions?
• How Many Players are Listed in the Auction?
• What is the Player Base Price? How are the Prices of the Players Set?
• How Many Players are Required in the Team Squad?
Clubs valuation in the year 2008
No. 1: Mumbai Indians
Owner: Reliance Industries
Value: $80 million
Value Change: up 22%
Revenue: $22.1 million
Jersey Sponsor: MasterCard
• No. 2: Royal Challengers Bangalore
• Owner: United Breweries
Value: $76 million
Jersey Sponsor: Royal Challenge

• No. 3: Deccan Chargers
• Owner: Deccan Chronicle
Value: $73 million
Jersey Sponsor: Deccan Chronicle

• No. 4: Chennai Super Kings
• Owner: India Cements
Value: $69 million
Jersey Sponsor: Aircel
• No. 5: Rajasthan Royals
• Owner: Emerging Media
Value: $67 million
Jersey Sponsor: UltraTech Cement

• No. 6: Kolkata Knight Riders
• Owner: Three-person partnership
Value: $61 million
Jersey Sponsor: Nokia
• No. 7. Dehli Daredevils
• Owner: Grandhi Mallikarjuna Rao
Value: $60 million
Jersey Sponsor: Hero Honda

• No. 8: Kings XI Punjab
• Owner: Four-person partnership
Value: $53 million
Jersey Sponsor: Emirates Airline

• HOW DO IPL TEAMS MAKE MONEY
REVENUE SOURCES
Share from Central Revenues – 70% of total
- Broadcast Rights (Sony’s 700cr. vs. Star India’s 3270 cr.)
- Title Sponsorship – 27.5cr. per franchise pa
Sponsors – pitch, bats, jerseys and even boundaries - 25cr. pa
Ticket Sales – 4cr. per match (80% for the home team, 20% BCCI)
Merchandise and Player Trading
TV & Advertising – 20% of total – 12.5lakhs for a 10 sec. ad
Champion Money – 20cr for the winning team
• EXPENDITURE
Average expenditure of a team owner is

200cr. pa
Players – 80 cr. Pa
Support Staff – 30cr.
Transport and Hospitality – 60 cr.
Practice sessions – 10cr.
Advertising to improve viewership, high
sponsorship on jerseys
PICTURES TO BE ADDED
Net Profit is either less or there are losses

Why do they still bid?
Strategies-Owners can sell their own products through this – Jio, Kingfisher
Recent profitability is due to VIVO and Star India
COVID-IPL
COVID Impact
Title Sponsorship
Revenue
Factors
Broadcasting and
Other Rights
Ticket Sales
COVID’19 Testing
and Bio Bubble
BCCI announces release of tender to own and
operate IPL team
• Through a Tender Process
• Invitation To Tender
• ITT available for non-refundable fee
• Right to Cancel by the BCCI
• Timeline Extension
BCCI ANNOUNCES THE SUCCESSFUL
BIDDERS
• For 2 Teams/Franchises
• ITT purchased by 22 Bidders
• Cities in Fray
• 2000 crores as Base Price
• Capabilities to Bid
• Consortium is allowed.
• Major Names who have picked up the bid document.
• Successful Bidders are:

• RPSG Ventures Ltd. – Lucknow (for INR 7090 crores)
• Irelia Company Pte Ltd. (CVC Capital Partners) – Ahmedabad (for INR
5625 crores)
-Thus 2022 IPL season contains 10 teams

-IPL 2022 will have 74 matches and each team will play 14 matches
-wherein each team will play 7 home and 7 away matches
What are factors behind team valuation
• Celebrity owners
• Brand players
• Geographical locations and demographics
• Team’s performance
Boom in Media Rights
Credits:
https://www.bcci.tv/articles/2021/news/155106/bcci-
announces-tender-of-ipl-media-rights-for-2023-2027-cycle
Broadcasting Rights 2008-2017
Broadcasting Rights 2018-2022
Boom in International Market
Rise of related Industries
The reasons:
Sports betting legalized
Mobile phone use
Popularity of Cricket especially IPL
Wide range of options (Apps rather than websites)
Pandemic
Future Ahead
• A study conducted by Baazi King estimates the

worth of the online betting industry in India at $30
billion
• The gambling industry in India accounts for over

15% of the world's online gambling traffic
• The industry has also been estimated to grow by

41% by 2024

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Indian Premier League (IPL) for Board of Control

for Cricket in India (BCCI)

Stats credit: https://www.bcci.tv/

Launched on 13th September 2007

• Lack of Work force diversity

• Lack of critical talent

• Franchisees Overpriced Promotions

• Increase in Consumer Disposable Income

• Access to International Talent in Global Market

• Developments in Artificial Intelligence

• Threats of New Entrants

• Squeezing Middle Class

• Other Sports Popularity

• Revenues Based on the Fans

• Government Regulations and Bureaucracy

Value Change: up 22%

Value Change: up 20%

Jersey Sponsor: Royal Challenge

Value Change: up 18%

Jersey Sponsor: Deccan Chronicle

Value Change: up 31%

Value Change: up 71%

Jersey Sponsor: UltraTech Cement

Value Change: up 41%

Value Change: up 25%

Jersey Sponsor: Hero Honda

Value Change: up 20%

Jersey Sponsor: Emirates Airline

Average expenditure of a team owner is

Net Profit is either less or there are losses

• ITT available for non-refundable fee

• Right to Cancel by the BCCI

• ITT purchased by 22 Bidders

• 2000 crores as Base Price

• Major Names who have picked up the bid document.

• Successful Bidders are:

-Thus 2022 IPL season contains 10 teams

• A study conducted by Baazi King estimates the

• The gambling industry in India accounts for over

• The industry has also been estimated to grow by

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