How IPL teams make money | IPL 2023 LIVE
If someone has money then they can buy an Indian Premier League team or are there are some specific people or companies that can buy an IPL team? What are its eligibility criteria? And how are the teams bought? How are the players selected? How does an IPL team earn money even after investing this much?
If someone wants to buy an Indian Premier League team then he has two options. He can buy IPL teams in these ways only. The first way is to talk to the owner of the existing team and buy their shares just like LIC has done. LIC bought 6% shares of Chennai Super Kings And the second way is to wait for BCCI to announce the launch of a new team.
Because it’s not like your team will be made if you go there with money. BCCI follows the process when it wants to add a team. When BCCI invites people to buy the team then only those firms can apply whose valuation is 3000 crores. Valuation means the earning power of the company.
If a company is sold then how much will we get from it?
This is decided based on revenue and profit. So when the BCCI invites then the eligible companies have to buy ITT( Invitation To Tender ). Its cost is 10 lakhs Rs plus GST. This is a non-refundable fee. All the terms and conditions are written in this. We cannot sit in the IPL bidding process without this.
Now, we will not get ITT on any shop. You will have to e-mail as BCCI has said in 2021 that whoever wants ITT should be emailed before 5th October 2021 to email@example.com And it’s not necessary that you will sit in the bidding process if you’ve purchased the ITT. Your ITT could be canceled without any notice or reason. The people who get shortlisted in this are allowed to sit in the bidding process.
The teams in the bidding process have a base price, normally it is between 1700 to 1900 crores. The team will not be sold below this. After this, bidding is done and the one who bids high gets the team. Like Lucknow was sold at 7000 crores and Ahmedabad at more than 5000 crores. After buying a team, you have to buy players.
Bidding will be done on which players? IPL 2023
For this, players have to register. So if I play cricket So can I register myself? It’s not like that. Players register themselves by three methods. The first is capped player, the player who has played even a single match from team India is called capped player. The second is foreign countries’ players. The third is uncapped players.
The state association sends these players. There is a pool of around 1100 to 1500 players. Out of them, 500 or 600 get shortlisted. The biggest example of this is Hardik Pandya who was an uncapped player, and came with the recommendation of the state. when players get themselves registered they set their base price.
This price ranges from 20 lakhs to 2 crores. After this, the players do not have any control over the process. One team bought all the good players with an emphasis of their money and make World11. The fun of IPL will be spoiled. That’s why the bidding process has some rules.
One team cannot have less than 18 and more than 25 players and it cannot have more than 8 foreign players. Every team is given a the limited amount which is called a purse and the purse has a limit Initially, it was 85 crores and now it’s 90 crores. Out of these 90 crores, a team of 18 to 25 players is to be made First, bidding for Marky players is done. Marky players mean the big players. Their base price is 2 crores and then bidding is done in groups.
The batsman group will come and then the ballers group will come And then the bidding will be done in those groups. It is very important to select the right players. That’s why the team uses data science. Which player has the ability to be hard-hitting? Which player is the match-winner? And out of two players of the same stat, where to spend more? In all these things, data science is used.
Bidding on players is done in a very controlled manner The players whose base price is from 20 lakhs to 1 crore can increase their bidding by 5 lakhs. Bidding from 1 crore to 2 crores You can increase it by 10 lakhs. All the teams get completed by this. And with this mini-bidding done every year, A team releases the players who are not useful in mini-bidding and the bidding is done between the released players and new players.
A mega auction is done every 3 years. It can be before or after In this, a team has to release all the players except 4. A lot of money is needed to buy an IPL team. Buying a team, the salary of support staff and player’s fees, admin and operation costs, hotel and tickets for flights because matches are conducted in different locations A lot of money is required. And then also, 20% of what a teamis earning has to be given to the BCCI.
After investing this much, the winning team gets only 20 crores.
So the business model of IPL is very different.
No team depends on the prize money of 20 crores.
So how does an IPL team earn money?
The first and major income of an IPL team is broadcasting rights. The channel that has the broadcasting rights of IPL can only telecast the IPL. From 2008 to 2017, Sony had broadcasting rights. If you wanted to watch IPL then, then you had to watch it on Sony. For this, Sony paid 8200 crores for 10 years. After that, bidding was done. From 2018 to 2022 Star India bought the broadcasting rights for 16347 crores.
50% of this amount goes to BCCI and the remaining 50% is divided among IPL teams. Earlier, 20% of this amount was taken by BCCI and 80% was divided among teams. Gradually, the share has become 50%.
Why do channels give this much amount for broadcasting rights?
IPL is watched on a massive scale all over the world. If I talk about 2019, then 462 million people have watched IPL And when these many people watch something then the brand gets involved in this. A 10-second ad that you see in between matches, goes for 12 to 13 lakhs.
You may find this amount less but when you will add the amount for 45 days Then it is a very big profit. That’s why all channels are ready for bidding.
The second source of income is title sponsorship You may have seen that IPL is not called just IPL. Sometimes it is called DLF IPL,
Vivo IPL, Pepsi IPL And now it will be called TATA IPL. The company gives a huge amount for calling out their company’s name with the IPL. And every company wants to join their name. That’s why bidding is done on this which is called the title sponsorship.
From 2008 to 2012, DLF gave 200 crores for calling it DLF IPL instead of IPL. Afterward for the next 3 years, Pepsi gave 396 crores After that, Vivo gave 2199 crores from 2018 to 2022 Due to the China-India conflicts, this thing was given to TATA for 300 crores per year. 60% of the earned revenue is kept by the BCCI and 40% is divided among the teams.
The ticket price is decided by the home team on whatever ground a match is conducted. On average, tickets worth 5 crores are sold Out of that, 80% is kept by the home team and the rest goes to the ground association. If you see a logo or name on the t-shirts worn by team players Brands give money for that.
During the match and inside the boundary If you’ll see the name of any company like on boundary roads, wickets, helmets, bats, on a t-shirt of an umpire, wherever you’ll see the name of any brands The teams get money for all this. The owner of the team get their players to advertise for other companies The ads are done by players wearing team jerseys, owner of the team gets the money for that.
Along with this, every team owner has their brands and promotions. They get it done by their players. You may have seen the ad of Jio Dhan Dhana Dhan. After that, every team has its own merchandise T-shirts, bats, kits, gloves of the team’s name. Different products are sold all over India and the money goes to the owner.
Lastly, attention is paid to the winning amount. The winning team gets 20 crores. And the runner-up gets 12.5 crores. Out of which 50% is kept by the owner of the team. And the remaining 50% is divided among the players. Even though in some arrangements, BCCI takes the share in revenue But the final amount that the team earns, has to give 20% of that to the BCCI. But then also you may have seen that the team owners desperately want their team to win or at least it reaches the top 4.
Because when these 4 teams qualify Then the other team’s match stops. But these 4 teams get to play extra matches. An extra match means extra tickets, extra sponsors, and extra money.The second benefit is that when the team reaches the top, its brand value increases. It gets more money as compared to other teams for ads and sponsorship.
The money taken by CSK for advertisement and the money taken by Punjab has a huge difference. So the winning team has the advantage. As I told you, they get to play extra matches for going there. So the profit increases by playing there. Initially, for 10 years, IPL teams faced losses. This was the time when Deccan Chargers were unable to pay salaries to their players That’s why the BCCI terminated Deccan Chargers and formed Sunrisers Hyderabad.