How Do IPL Franchises Make Money?

The fans of IPL have increased over time with ease. There has been a huge fan following when we talk about the game. However, a lot of the readers or followers of the game are not aware of how IPL franchises make money. This is a very important question that tends to revolve around the circuit.

It is a clear fact that players are purchased in the auction whereby they are being paid the money they deserve. There is a distinctive idea of whether how BCCI makes money in the league i.e. from the franchises who pay the cricket governing board in India, but how do franchises who invest so much make the money.

This fact of how IPL franchises make money is pretty important and needs to be thoroughly checked forward to get the basic idea. It is not an easier job to be the owner of the franchise, they are some well-known business personalities who invest a lot of time and finance to make the right choice.

When the news circulated that two new IPL teams be it Lucknow and Ahmedabad will be added, BCCI was one of the happiest parties. This is due to the fact that they will be earning 12715 crores merely from the addition of the two teams. Such is the range of the tournament. As we look through how IPL franchises make money, there are some particular ways:

Sponsorship

This is one of the highly practiced ways to make money in the IPL. When the brand or other entities comes through for the sponsorship with the team owners and the franchises, they tend to get paid hefty amounts. To make matters more clear, it is the sponsors who keep the tournament alive.

The logos and brand names that are used in the jerseys of the players along with the branding that is done covering the games are supposed to be the sponsorship. The brands that do the job of sponsorships tend to give the team owners a huge amount of money. The payment for the chest or the arms along with the back tends to get different. All of this goes through mutual consent. 

Media Rights

Media Rights refer to those rights of the media authorities that will be sold to the broadcasters. This helps the BCCI and also the other teams who are part of the tournament to earn good money.

A stat suggests the fact that Star India purchased the IPL broadcasting right for a mammoth 16,347 crores for the five-year period. Not only that they were able to pay through roughly 60 crores per IPL match. All of this is bound to be shared with all the teams that are part of the tournament. Earlier there were eight teams but now the table turns to ten.

Prize Money

When you compete and play for something there is always the prize of winning. When the teams compete for their heart out for the title, they not only get the silverware but also a lot of money to go with it. Although the majority of the winning cash goes to the players the franchises also earn some.

 
Talking about how IPL franchises make money, this is also one of the well-known ways.  In the IPL 2021, CSK won the title and received 20 crores of financial reward. Other than that runner-up KKP also received 12.5 crores which ain’t a small amount. The players tend to keep 50% of their earnings while others go to the owner of the franchise.

Ticket Sales

Ticket Sales refers to the number of tickets that are sold during the game through the medium of the audience. The crowds that tend to fill and light up the stadium are a very important part of how IPL franchises earn money. The more the sales of the ticket, the higher the income for the IPL franchises.

According to the rule placed in IPL by BCCI, 15% of the total money received from the sales of the ticket goes to the franchise. Not only that the franchises depend on a huge amount on this source of revenue. Since the last two years with the COVID restrictions, the franchises have been affected on the ticket sales meter.

Brand Value

Brand Value refers to the financial assumptions of the team. When the teams have some of the biggest names in the tournament, their brand value tends to rise up automatically. Not only that the bigger brand value helps the team to negotiate when the sponsors come to their door.

Let’s take an example of the team with some average players and another team with the likes of MS Dhoni, Raina, Bravo, Faf Du Plessis, and the fan following in the mix. Well, the latter team tends to overtake the claims in the case of having better brand value. All of this to earn for the franchise.

When the brand value is higher there is a better chance of negotiating well which can benefit how IPL franchises make money. In the most recent times, CSK has become the $1 billion team in the case of brand value. All of this puts through to the fact that having a good brand value helps the rise of the team.

Selling of Stake

A lot of the readers might not be aware but the selling of the stakes can help the franchises and also their owner to make a good amount of money. There have been cases over time when the overall stake is purchased. However, sometimes the purchase of the partial stake makes it possible for the better run of the team.

In the past, KKR has gone through this route to sell their partial stakes which have helped the team to run well. The most recent example comes from the camp of Delhi Capital. It was a GMR group team at the start. Interesting JSW brought a 50% stake of the team for $77 million. This shows the franchises can earn money one way or another.

Merchandise Sales

A lot of the cricket fans don’t talk about this process in making money for the franchise. Merchandise refers to the goods or the fashionable items related to the particular team. If you support CSK, wearing the jersey of the team makes things more interesting and also wanting to compete.

Franchises these days is highly focused on making money through merchandise sales. It is safe to say that online delivery procedures allow the team to deliver the caps, jerseys, mugs, and other replicas of the team.

With the fans demanding more of the favorite teams’ good and fashionable attires, the scope for the franchises to make money through this is pretty high. Although this process to make money for the IPL franchise goes unnoticed, the team owners go on to make a large sum without breaking much of the sweat.