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Before the thrill of the final match cools down, have you ever not wondered if the prize money of INR 20 crores for the winning team is a tiny titch as compared to what franchises spent on buying players (alone Sam Curran was signed for a whopping amount of INR 18.5 crores!!)

To understand further, let's delve into the fascinating world of the IPL, a business that remains unaffected by soaring inflation, a global pandemic and rising interest rates. But before that few gripping facts:

‍According to an annual report released in December 2022 by Brand Finance, a brand valuation consultant:

🏏 IPL’s aggregate system value has risen by 77% YOY, boosted by the last media rights auction and addition of 2 new teams, reaching a total brand value of $8.4 billion vis a vis $4.7 billion in 2021.

Brand Value:

 🏏MI retains its top position in being the most valuable IPL brand with $83 million as its brand value.

 🏏 Fastest growing brand value is RR ($61.3 million), up by 78%.

 🏏 KKR and CSK are the 2^nd and 3^rd most valuable IPL brands ($76.8 million and $73.6 million respectively).

Brand Strength:

🏏 RCB proves to be the strongest IPL brand (Brand Strength Index - 70.6/100).

🏏 IPL 2022 winner, and new brand, GT is already the 3rd strongest IPL brand (BSI - 69.9/100).

(Brand value is the financial worth of a brand, which is calculated based on the estimated future cash flows. While brand strength is determined by factors like marketing efforts, customer loyalty, reputation, and employee satisfaction. Besides revenue forecasts, brand strength also drives brand value.)

Further, it is very interesting to note that IPL has emerged as the 2nd most valuable sports league in the world, after the American National Football League (NFL). It has surpassed the English Premier League (EPL), Major League Baseball (MLB) and National Basketball Association league (NBA). IPL’s most valuable franchise MI, is now worth more than 6 MLB teams, 27 National Hockey League teams and every Major League Soccer team.

‍Coming to the business model - Who are the chess pieces in this master gameplan?

🏏Administrator: BCCI

🏏Franchise: CSK, DC, GT, KKR, LSG, MI, PK, RR, RCB, SH

🏏Broadcasters: Disney-Star

🏏Streaming Platform: Jio Cinema

🏏Cricket Stadiums associated with the teams

🏏Sponsors: TATA, Cred, Upstox, Rupay, CEAT, etc.

🏏Cricket Players

(And of course, the fantasy sports gaming companies minting monies around the enormous fan base!)

What’s the master gameplan - the revenue streams:

• Broadcasting Rights:
  BCCI auctions the broadcasting rights for a period of 5 years. Out of total fees, it retains 50% and from balance 50%, 45% is distributed among the franchises equally, and 5% goes to the franchises in form of prize money.
  The latest auction broke all previous records, as television and digital rights were sold separately, ending the monopoly of any one media company. Rights for the years 2023-27 seasons have been sold for INR 48,390 crores more than double the price at which it was sold in for 2018-22.
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  Disney-Star secured the TV rights in India for INR 23,575 crores. Mukesh Ambani's Viacom18 acquired digital rights in India for INR 20,500 crores and non-exclusive rights for INR 2,991 crores. While the rights for international countries was shared between Times Internet and Viacom18. These buyers then subsequently sold advertisement spaces on their platforms to various brands. The cost of advertising varies depending on factors such as the type of ad, duration, platform chosen, time slot, popularity of the match, expected number of viewers, match type (regular / playoff / final). Over a staggering 3.2 crore viewers tuned in to watch the epic showdown on Jio Cinema on 29^th May 2023, making it a truly remarkable moment in the history of sports broadcasting!

• Sponsorship deals
  From jerseys to caps and stadium seats to stumps - every inch generates revenues from sponsorships. Fees from all the central sponsorship deals (example: TATA, Cred, Upstox, etc.)  are distributed similar to how fees from broadcasting rights is divided. Additionally, each franchise has its individual sponsors as well. From title sponsors to associate sponsors to media partners, there are a plethora of sponsors linked with an IPL team. The bigger the logo, the higher the amount a sponsor needs to pay to the franchise. Around 20-30% of the team’s revenue comes from sponsorship only.
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• Ticket Sales
  Each team has its own home ground(s). The revenue of ticket sales goes directly to the franchises, with a portion of it distributed to BCCI. Again, the bigger the stadiums, the higher the ticket sales. Ticket revenue generally forms around 10% of revenue for IPL teams.
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• Merchandise Sales
  Each IPL team earns a hefty amount from the sales of merchandise. This is why franchises try to sign a player with a bigger brand value which is helpful in selling the goodies.
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• Franchise auctions
  In light of the tournament's expansion and the introduction of new teams, franchise auctions have emerged as an additional source of revenue for BCCI. During the 2021 auctions, the RP-Sanjiv Goenka group made a substantial investment of approx INR 7,090 crores to acquire the new LSG franchise, while the CVC Capital group secured the GT franchise for around INR 5,625 crores. Further, there is speculation that the BCCI may increase the number of teams from the current 10 to a total of 12 by 2027.
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• Playing fees, Awards & Advertisements
  In the IPL, cricket players experience financial success alongside their sporting prowess. They can earn the bid price, which is determined through intense competition, or secure retainership fees if they are retained by a team. They also have the opportunity to enjoy the fruits of their hard work through lucrative advertising deals. Furthermore, their exceptional performances on the field are rewarded with prize monies.

Economic implications of this gameplan:

IPL contributes significantly to rise in tourism from countries having huge cricket fan base like UK, South Africa and Australia. Further, due to huge demand for staff members (like medical teams, coaches, cheerleaders, stadium employees, security and so on), it generates a vast number of employment opportunities across various sectors.

IPL matches played across India attract extensive media coverage, benefiting tier-2 cities through increased investments in infrastructure and development. These cities also experience a boost in tourism-related activities, fostering economic growth and development.

And not forget, the Government's cut of the IPL money pie is in form of income tax and GST collections that follows the massive incomes linked with IPL.

Now that we have peeked behind the curtains of the IPL's business model, we realize it's not just about cricket, but about passionate stakeholders leveraging diverse revenue streams, while entertaining the world at large.