Intex Technologies Director Keshav Bansal surprised the country after betting for a franchise of the Indian Premier League. No wonder he had one in his kitty soon and now he is the proud owner of Gujarat Lions captained by the amateur Suresh Raina. A closed bidding of some thousands of rupees is done before one is granted a franchise in this extravagant event. Once you own a team there is no looking back. Keshav Bansal became a household name after the Indian Premier League of 2016.
Why does our current President of Board of Control of Cricket in India(BCCI) want to hold a mini IPL this September? The reasons need no prior understanding. IPL has created history in terms of the earnings it has done in all its subsequent years. This cricketing event collects almost ten billion dollars in one season.
Cricket leagues like IPL are getting huge revenues!
The earnings for the events start with the amount the Board gets for giving one the right to hold a cricket team in the IPL. The average amount paid by the owners of the team as a contract renewal amount is around 60 Crores annually. The major earnings come from the Media rights also referred to as the Central Rights Income. The board gives the broadcasting right to the highest bidder. Sony has had the broadcasting rights of the league for a time span of 10years. After deducting some amount from the money received by the Board, the rest of the money is distributed amongst the various teams. The amount is distributed based on the team’s ranking in the tournament. The whopping earnings of the BCCI make IPL the most profitable league (read: business) of the year.
Other related commercial activities in this sports event are the sponsorship fever. Large companies want to engage in advertisements and name building and they do it by sponsoring the league as well as the teams. The title sponsor of the league sheds many crores of rupees to bag the deal. The latest being Vivo which was the title bearer of this year’s Indian Premier League. Sponsorship calls for a contract between the board and the sponsor agreeing on the various deliverables both stakeholders expect from the deal. These contracts are based highly on the viewership achieved. The revenue earned is directly proportional to the viewership of the event. The sponsors of the various teams of the league shed the amount in proportion to the visibility of their brand they can expect from the event. The jersey of the players, the promotional ads during the strategic timeout of the league, the boundary barricades, the ground and all similar places promising an honest visibility.
Ticket sales is another major chunk of revenue earned. With the Indian Premier League being one of the most watched spectacles because of the comforting match time and duration, it has always experienced jam packed stadiums with advanced bookings in thousands. The amount of the ticket is decided by the owner keeping various factors such as the city’s population, economic standard and so on in consideration. The work of allotment of tickets is outsourced to companies like Book My Show or Big Tree Entertainment who all charge a small commission for the same. The spectators are treated with various food and beverages managed by various stalls which are operated with the approval of the Board after charging some amount for the same. Another strange thing about the league is the most profitable team not necessarily being the one with the cup in its hand. The team Kolkata Knight Riders (KKR) ended up being the most profitable team of the first IPL season because of its strong popularity since the owner of this team is King Khan himself. The team showed a profit of 13Crores in its first season even after performing very badly.
These arguments surely convince one that cricketing leagues are more than just a cricketing fiesta. It’s a commercial event with various stakeholders who have invested crores of their hard earned money in this ironically standing business.