Winning Prize Is only 20 Crore then how franchise invest huge money to buy players?
How IPL Teams Make Money: The team that wins the IPL 2022 title will get an amount of Rs 20 crore. From a layman’s point of view, this is a huge amount of money, but whether these 20 crores have any meaning for an IPL team or not, you have to have a deep deliberation on this. Do not go far, let’s talk about the last season itself, at that time the cheapest team in IPL in terms of brand value was Rajasthan Royals, whose brand value was Rs 250 crores. On the other hand, if we talk about Dhoni’s team CSK, then the brand value of Chennai is about 2700 crores. In such a situation, what does the winning prize of Rs 20 crore mean for these teams?
IPL is also called a cash-rich league which means a league in which money is rained. There is a need to understand deeply how IPL’s business model works. If you try to understand in simple language, then you will find that the real game of money in IPL goes on outside the field. The governing body of IPL is BCCI, meaning it is completely controlled by BCCI.
There are 3 pillars to generate revenue in IPL. The first broadcaster means the channel on which you watch IPL matches, the second IPL owner means that big private company that buy these IPL teams by paying a big amount and the third is- a sponsor which mostly private company do and advertise TV to channels.
The biggest money they earn is from sponsors. There are also 2 types of sponsors, in which the title sponsor is the main one. Just like the IPL is now called Tata IPL, which means Tata has paid a lot of money to become the title sponsor. This year Tata is spending Rs 330 crore for this title sponsor. Now understand that the money that BCCI gets from the real sports in title sponsor keeps 50% of it, giving the remaining 50% to the teams.
Then comes another type of sponsor like CEAT Tire has sponsored Strategy Time Out for which they have paid Rs 30 crore. Apart from this, you must have heard words like CRED Powerplay, and DreamEleven Game Changer of the Match during the match. If reports are to be believed, a total of Rs 210 crore is printed from here, which is distributed among teams apart from BCCI.
BCCI also makes huge profits by selling broadcasting rights. For the first 10 years of IPL, Sony bought it for Rs 8207 crore. In the year 2018, Star Sports bought the right to broadcast IPL for the next 5 years for 16 thousand 400 crores. This means every year’s earnings are about Rs 3300 crores, even here BCCI keeps half the money itself and distributes half the money among the teams.
Now the question arises that what is the benefit of Star Sports which is giving 16 thousand 400 crores? Simply understand, Star Sports, which is showing IPL matches, now if you want to advertise Star Sports, then for every 10 seconds add, you will have to pay Rs 15 lakh.
Now if we look from the point of view of IPL teams, then they also have to spend money on many things. From paying the player’s salary to training, the IPL team bears the expenses. Overall, the expenditure of an IPL team every year is around 200 crores. They earn money by doing 50-50 with BCCI but this money is not enough.
Then come the team sponsors who are on the jersey of the IPL team. On average, a team jersey has the logos of 10 team sponsors. These brands now directly pay money to IPL teams to sponsor. Apart from this, when you buy tickets to watch matches, 80% of this money also goes to the IPL teams.
80% of the revenue will go to the home team of the stadium where the match is taking place. If the match is being held at Wankhede then 80% of the ticket money will go to Mumbai Indians. The rest 20% goes to the Home State Cricket Association. It is estimated that the team earns about 4 crore rupees from tickets for a match. Apart from this, these teams also earn money by selling merchandise like T-shirts.
After this comes to the IPL prize. The team that wins the IPL will get 20 crores, the runner-up team will get Rs 13 crores, the one who loses Qualifier 2 will get 7 crores and the one who loses the Eliminator will get Rs 6.5 crores. Half of this prize money goes to the owner of the team and half the money is distributed among the players of the team. Every team wants to win IPL not for 20 crores but to increase their brand value.