IPL: A Cooking Pot for BCCI


We must have heard the tale of cooking pot that used to cook the food without taking any input or raw food and yes the IPL has become the same cooking pot for the BCCI as it just produces money without taking anything as an input from the BCCI.

IPL was started in 2008 when BCCI invited bids for IPL franchise and out of all bids took a total of $723.59 million (5000 Cr) in return of producing 8 teams to play in the tournament for next ten years.

The amount of 5000 Cr was not paid all at one time but every franchise has to pay a 10% of the total bids every year and hence becoming the big source of income for BBCI. For an instance, if the franchiser of Chennai Super Kings has a bid of 618 Cr so it has to pay an amount of 61 Cr to the BCCI. The difference in the bid is just the difference in the thought of the franchise (or anticipation) as they thought that they can manage the team in the given amount and pay to BCCI according to it. This bid is the biggest revenue for BCCI and is the biggest spend for franchisers every year.

Now coming to the media rights as they are the biggest source of income for the IPL as in previous years it was bought by Sony Max for $1016 million (approx. 700 Cr) every year.The whole 700 Cr was not bagged by the BCCI itself but has been shared by the BCCI and the IPL franchises with a certain ratio as 80-20 for first two years then 70-30 for next two years and at last 60-40 for next six years. The streaming rights were also sold to HOTSTAR in 300 Cr for 3 years.

Sponsorship Rights also add the amount in the earning of IPL as first 5 years it was sponsored by DLF in 50 Cr/year and then for next five years it was sponsored by Pepsi in 80 Cr/year and now it is been sponsored by VIVO in 80-100 Cr/year.  This money was also distributed between the IPL franchises and BCCI in the ratio of 60-40 for the first 5 years and now it is 50-50 for both of them.

IPL franchisers earn money in the form of team sponsorship as of KKR was sponsored by GIONEE smartphones and give 54 Cr for 3 years. Ticket Sale also adds money to the bag of IPL franchises as price of ticket in the home ground is decided by franchisers itself and also the price gained from the sponsorship on the ground which is approx. 2 Cr per match and the money gained from the Food Stalls is also around 1.5 Cr if an average person spends 300Rs only. IPL franchise adds money to their bag in the form of merchandise sale also as the advertisement on the T-shirts, Cap etc.

IPL team winner gets an amount of 20 Cr while the runner-up gets an amount of 11 Cr and the semifinals playing team gets 7.5 Cr each from which 50% is paid to the team members and rest of the amount is been recovered in the cost of the franchise. IPL also gives the chance of promotion of their own brand for the IPL franchises. We may not know and I can’t say about the money earned from the spot-fixing.

Now coming about the expenses of the IPL franchises as money paid to BCCI in the form of bid, money paid for the hospitality of the players, match organizing fees, marketing fees, after parties, prize distribution, and salary of mediators.

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