Rs. 5,51,70,00,000 is the total IPL money spent on auction by all teams in 2021 and it’s way more in 2019. Hence, this constitutes to Rs. 55 Crore of Investment on average from every team. Out of which, the ongoing season of the IPL offered total prize money of Rs. 50 Crores, with the winning team netting Rs. 20 Crore & Rs. 13 Crore for runners. That means, Every winning team in the tournament pays Rs. 30 Cr more than returns.
Earlier teams like Deccan Chargers though have won the second season, have sold their franchise soon. So they claim to say, it is because of heavy losses by not getting any returns in the long term!
Would that mean teams with fewer tournament victories face losses?
Now, how about RCB, whose franchise owner has their primary firm stuck in a couple of debts, and moreover the team has never even won a single tournament. So is it right to still keep investing in such a costly team with the most valuable/ Costly players & repeated defeats as well?
To understand this we need to first understand the correlation between IPL & BCCI & How they work Hand in Hand. IPL is an undoubted hub for BCCI, Wherein they earn more revenue when compared from an Indian Cricket Team, They receive the revenue from IPL through Media Rights, Title Sponsor, and Other Sponsors which will produce approx. 5000 Crores Per Annum.
Not all the channel can broadcast the live matches of IPL, they need to buy the rights from BCCI. So from 2008 to 2017 SET Max had the rights to telecast the Live matches and that cost them around 8200 crores for 10 years but soon the IPL’s popularity increased exponentially and from this year 2018 to 2022, Star bought the rights with a shocking cost of 16000 Cr that too only for 5 years.
Now, this definitely increases impressions to a really great extent as the interest is really high for the same, (Hotstar recorded 18.6 million concurrent viewers on its platform during the 2019 IPL final between Mumbai Indians and Chennai Super Kings) In return, the star is charging in 10 Lakhs for every 10 Second Ad on average because of this huge demand, of the telecast reaching down to 3rd tier cities as well, many companies come forward to invest to increase branding and in return increase in sales.
Sponsorship on broad overview is based on 2 different types:
IPL Brand Sponsors
Franchise Specific Sponsors
If a company is an IPL Brand sponsor then their footprints will be visible everywhere and as expected the investment is high as well but the issue is with Franchise specific sponsors, here the business sponsors based on specific regions as well, I do understand the impressions might be visible everywhere, but that might change the customer worldwide if its a PAN India company.
What is a worldview?
A worldview is the set of beliefs about fundamental aspects of Reality that ground and influence all one's perceiving, thinking, knowing, and doing. Here the question is not about liking, it’s about hate.
If a fellow customer doesn’t like a specific team then there is a chance for them to indirectly start a hatred over the fellow company sponsoring the team as well. Aircel is one simple and a small example to look into, they have clearly tried to capture a good market share in TN early then but weren’t able to expand themselves in any other regions & this is a clear way by which kingfisher becomes a common partner for almost all teams.
and there are many other ways by which BCCI earns revenue!
But coming back, How are teams earning returns, more specifically - How about RCB?
Earnings 1 - Match Tickets.
IPL matches are rarely without full stands, consider any match occurring in a stadium with a capacity of 50000 with an average cost of 1000 Rs which sums up to 5 crore rupees. The home team gets a share of 80% of the amount from the tickets. That's the reason each team has 7 home matches equally.
Earnings 2 - BCCI Payments.
BCCI is getting around 20000 crores for 5 years, which makes 4000 crores per year. This is how BCCI earns, now from this money BCCI has to pay 40 % that is 1600 crore per year to all the teams. So each team will get 200 crores directly from BCCI every year no matter they win or they lose. This is called as Central Pool. So this is the 1st source of income for the teams.
Earnings 3 - From Sponsorship
On average, a team earns close to ₹100-125 crore from sponsorship. So the sponsorship vary’s on the interest rate of the following IPL Teams,
So after CSK, Along with KKR & MI Teams, the fandom is equally popular for RCB as well. And this clearly is a reason for sponsors to turn their wings towards RCB.
So Legally even if RCB is investing close to 100 crores every year legally, they are earning close to 500 Crores as returns. Hence, until the fans stand with any IPL Team, The Teams would never back off because they are the main & Primary source of revenue generation & this is one reason why BCCI competed with ICL and started IPL, which has become the primary reason for BCCI to be the richest cricket board in the world.
Assuming IPL is canceled any season, there would be more than 6000 crores being directly affecting both BCCI & IPL Teams, What are other business & economic losses?
Do let me know your unique view in the Comment Section.