Before the 16th season of the Indian Premier League, will participate in the auction today and will shower money on the players. But do you know where the teams get so much money from?
Before the start of the 16th season of the Indian Premier League (IPL), the stage for the mini auction (IPL Auction) has been set in Kochi on Friday. All 10 teams have a budget of Rs 206.6 crore, and there are a total of 405 players up for bid. In the IPL auction, the money spends heavily on the players. There is a race to buy the players of the franchises and sometimes the bids starting from one crore rupees go beyond 10 crores. Overall, money rains heavily. But how do the franchisees who spend so much on players earn? To spend on players from where so much money come from?
Biggest Source of Income
The IPL is run by the Board of Control for Cricket in India (BCCI), and broadcast and media sales are both major revenue generators. IPL franchisees earn the most money by selling their media rights and broadcast rights. At present report, the rights of broadcasting is with Star Sports. According to a report, initially BCCI used to keep 20 percent of the earnings from broadcasting rights and 80 percent of the amount was received by the teams. But with time, this percentage rose to 50%.
Earn money from advertisements
Apart from selling the rights of IPL media broadcast, the franchisees also earn a lot of money from advertisements. Companies also pay heavily to the franchisees for the names and logos of the companies appearing on the jerseys and helmets of the players. During the IPL, the players of the franchises do many types of ad shoots. Earning is also done from this. The IPL teams make a lot of money overall from advertising.
Revenue is divided into three parts
Now let’s understand in a little easier language how teams earn. First off, Central Revenue, Promotional Revenue, and Local Revenue are the three categories into which IPL teams’ profits are split. Only the core money is used for title sponsorship and media broadcasting rights. About 60 to 70 percent of the teams’ earnings come from this.
The second is advertising and promotional revenue. Due to this, the teams earn about 20 to 30 percent. In addition, local revenue accounts for 10% of the teams’ revenue. This include ticket sales and other things.
The franchise owner keeps about 80% of the money from ticket sales, with 7-8 home games per season. The remaining 20 percent is divided between the BCCI and the sponsors. Income from ticket sales typically accounts for 10-15 percent of a team’s revenue. Teams also generate a small portion of revenue by selling merchandise such as jerseys, caps and other accessories.
Strong increase in popularity and market value
For a total of $723.59 million, Indian businesspeople and some of the greatest stars from Bollywood purchased eight city-based franchises when the IPL began in 2008.A decade and a half later, the popularity and commercial value of IPL has grown manifold. In 2021, CVC Capital (a British equity firm) paid around $740 million for the franchise of Gujarat Titans.
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