6 ways How IPL Teams Make Money – The Billion Dollar League

How IPL teams make money along with other major stakeholders like the BCCI is a question that we all have definitely pondered somewhere or sometime while watching the league.

What makes the IPL one of the biggest and most expensive sports leagues in the world? How do IPL franchises, teams, and sponsors make money?

No doubt, the popularity of IPL is at its peak. And it’s the fans and the format of the game that makes it cash rich.

The recent media rights-selling e-auction event might well have further spurred the thought of exactly how IPL teams make money! This article will be a complete guide as to how the BCCI, IPL teams, and other major stakeholders generate money through this cash-rich league.

We often say that IPL is the best domestic cricket tournament in the world. This statement is absolutely true on any given day. IPL has revolutionized cricket all over the world. It is because apart from giving an opportunity to talents and improving the structure and pedigree of Indian cricket and world cricket. It has also launched or shown the pathway for a very profitable money-making business model which is now being adopted or replicated by other cricket-playing nations all over the world in the form of BBL, CPL, PSL, etc.

Three very key stakeholders in IPL – the IPL governing body (BCCI), the broadcaster (now Star Sports), and the 10 IPL franchises earn tons of money every year through the IPL. So, if you have ever wondered how the IPL teams make money or are the winning prize money all that a team gets, or how come, teams, like CSK have a brand value in excess of a mammoth 2000 crores INR, we have got you covered in this article.

Before we begin to unfold how IPL teams make money, it is important to note that an IPL team on average incurs 200 crores INR (over 25 million USD) as expenses every year. This money is spent on player acquisition, salary to staff and support members, transportation, accommodation, training facility, recreation, and other miscellaneous activities.

So without any further delay, let’s get started with the IPL sources of income and consequently how much is earned which are as follows:

6 Ways How IPL Teams Make Money

1. Corporate Sponsorships

Corporate sponsorship is the key source of income for BCCI and all 10 IPL franchises. Corporate sponsorship can be divided into two parts –

1. Title and official sponsors of IPL
2. Team sponsors

Let us look at both one by one.

Title and official sponsors – The title sponsor is the name of the company that you see along with the logo of IPL, in the beginning, it used to be ’DLF IPL’ which later became ‘Pepsi IPL’ followed by ‘Vivo IPL’ and now “Tata IPL’. It’s a no-brainer that an insane amount is poured in by these companies to get the rights of title sponsorship.

Just to give you an idea (hold your breath), Vivo spent 440 crores INR in 2021 and Tata spent 330 crores in 2022 to close the deal! Now, whatever amount BCCI gets from this title sponsor, they keep 50% of it with them and the rest 50% is distributed equally among the ten teams. Similarly, there are other official sponsors of IPL as well like CEAT, Cred, Dream 11, Rupay, Unacademy, etc through which BCCI collects around 200 crores INR in total every season out of which BCCI keeps 60% with them and distributes the rest equally among the 10 teams.

Team Sponsors – Team sponsors refer to the sponsors or the companies you see in the jerseys, caps, and pants of a franchise. There are around 10 sponsors seen in the total outfit of a franchise when they play and moreover, the franchises also promote brands through social media and tv advertisements. The total amount a team receives through team sponsorship differs from team to team depending on the brand value, but each team easily earns way more than 100 INR crores through this medium.

Hence, if we take IPL 2022 as an example, each team earned 16.5 crores INR from the title sponsor Tata, 8 crores INR (approx.) from other IPL sponsors, and above 100 crores INR through team sponsorships.

2. Broadcaster

The channel network that holds the media rights of IPL, that is the television channels in which the IPL matches are telecasted is perhaps the biggest source of income for BCCI and hence how IPL teams make money as well.

Till IPL 10, Sony network had the media rights for IPL for which they ended up spending a whopping 8200 crores in total which is 820 crores INR each year, and from IPL 11 to IPL 15, Star Sports took over and owned the rights by spending 16400 crores INR for 5 years which is 3280 crores INR per season! Yes, you read those numbers correctly, and honestly speaking, we ran out of adjectives to describe these amounts!

Now, the amount received by BCCI through the broadcaster is again, like the title sponsor, out of the total amount 50% is kept by BCCI, and the other 50% is equally distributed to the 10 franchises. Hence mathematically speaking, each franchise in this IPL earned 164 crores from Star Sports itself which almost covers their total expense incurred for the season of around 200 crores INR! Have these figures sunk in yet? Wait, it’s definitely not over yet!

Coming to the recent e-auction that took place between June 12-13th, for the period of 2023 – 2027, Star Sports has won the TV rights for a whopping 23,575 crores INR and Viacom18 (Voot) has won the digital rights for an insane 20,500 crores INR. Viacom18 – A Reliance brand, has also won the rights to broadcast for the rest of the world.

Altogether, the total media rights have been sold an eye-brows raising 48,390.32 crores INR (over 6 billion USD) for the cycle of 2023 – 2027 which means approximately 9662 crores INR will be earned from media rights each year (around 120 crores INR per match by telecasting in India itself) making it one of the most valuable sports league in the world!

Going by the calculation shown above, each of the 10 teams will earn around ₹ 483 crores INR each season from broadcasting rights! That’s some serious business and a massive massive way how IPL teams make money.

Also, take a look at this stat given by Sportsgully-

3. Stadium Ticket Sales

Revenue generated from ticket sales in the stadium is another way how IPL teams make money. It is estimated that around 3-5 crores is accumulated through ticket sales in each match of the IPL. The revenue collected is then distributed in an 80:20 ratio that is 80% of the income is given to the home team and the rest 20% is given to the respective state cricket board.

For example, let’s say a match is played at Eden Gardens which is the home ground of KKR, and let’s assume that 5 crores rupees are collected through ticket sales, so 80% of 5 crores that is 4 crores will be given to KKR and 1 crore to Cricket Association of Bengal (CAB). Given that each team plays 7 home games, the revenue earned through this source is around 20 crores – 35 crores INR each year.

However, this source of income became redundant since the pandemic hit the world, but let us not forget that the franchises have also saved a lot of money spent on traveling, and hence it is somewhat evened out.

4. Merchandise Sales

When we question how IPL teams make money, Merchandising becomes another great source of income for each of the 10 franchises in IPL. Merchandising refers to the jerseys, polo t-shirts, apparel, hoodies, pants, caps, mobile back covers, etc. that the franchise sells either directly through its own website or through shopping platforms like Amazon, Flipkart, Myntra, The Souled Store, etc. and through physical retail outlets.

The revenue generated here varies from year to year and also depends a lot on the fandom of a particular franchise, hence it is difficult to provide an estimated figure for this source but definitely a very good source when it comes to how IPL teams make money.

5. Prize Money

Prize money is the money awarded to the teams based on where they finish in the IPL. To elaborate, let’s take the example of the recently concluded season, the Gujarat Titans ended up being the champions of the season and hence were awarded Rs. 20 crores INR by the BCCI.

Rajasthan Royals was awarded 12.5 crores INR for being the runners-up, 7 crores INR were earned by RCB after they lost qualifier 2 and finished 3rd overall, and 6.5 crores INR was given to the team that lost the eliminator, that is LSG. 5 crores INR were distributed to each of the 6 teams who didn’t make it to the top 4.

Hence, even if a team finishes last, still a good amount is earned by the team for participation and whatever prize money is earned, be it 20 crores or 5 crores, 50% of it is kept by the owners of the team and the other 50% is distributed equally among the players and support staff.

6. Selling Stakes

Selling stakes is a rather uncommon source of how IPL teams make money, but nonetheless, it is a source of income and it has happened. The owners of a franchise may sell their stakes in the team to other reputed private companies or wealthy and famous individuals to increase brand value and hence garner revenue.

For example, RR sold a 15% stake to RedBird Capital Partners which has interests in the parent company of Liverpool, CSK granted 6% of its stake to LIC in the past.

If you look closely, each of the 10 teams makes a fixed amount of money through the title and official sponsor of IPL, and the broadcaster. The other sources of income that are generated through team sponsors, merchandising, ticket sales, etc. are variable in nature and depend on the brand value and fan following that a particular franchise enjoys.

So, remember when we stated in the beginning that each franchise ends up incurring an expense of around 200 crores INR on average every season?

Now, look at the income earned by each of the franchises say for 2022 – 24.5 crores INR from IPL title and official sponsors, 164 crores INR from Star Sports, over ₹100 crores INR from team sponsors, money made from ticket sales is unknown for this year but in the pre-pandemic time, it used to be 20-35 crores INR, 5-20 crores INR from prize money, and plenty more from merchandising. Therefore, the prize money that you see given to a team at the grand presentation ceremony of the final match is just the tip of the iceberg!

Hence, 200 crores INR spent, well in excess of 300 crores INR earned, may even cross 400 crores INR for franchises with high brand value. Therefore, your favorite IPL team makes a profit of 100 – 200 crores INR (around 20-25 million USD) or more every season! Mind-boggling isn’t it? And that’s along with BCCI, how IPL teams make money!

To summarize, here are the 6 ways how IPL teams make money –

1. Corporate Sponsorships (IPL and Team sponsors)
2. Broadcaster –
3. Stadium Ticket Sales
4. Merchandise
5. Prize Money
6. Selling stakes

FAQs on How IPL Teams Make Money

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