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IPL Business Model: How IPL Makes Money?

by Tarun Pal
how ipl makes money?

India is the second most populated country in the world, and cricket is the most loved sport in india. In 2023 130 million people watched IPL online, So we can estimate the population of IPL in india. 

Do you watch the IPL? Of course, you watch the IPL, but have you ever wondered how the IPL makes money and what its business model is?

It’s okay if you don’t know!

In this article we will know how IPL earns money and the business model and revenue model of it. 

What is IPL

IPL refers to the Indian premier league, started in 2007. The event was held in 10 states of India with state wise teams. The idea of IPL was from Lalit Modi, he observed the popularity of cricket in india, like people are mad for cricket in india. So he approached the BCCI and shared his idea of a domestic league where 5 foreign players are allowed in each team. 

Here is additional information about the IPL:

Full NameIndian Premier League (IPL)
Inaugural Season2008
Number of Teams8 (as of my last update in September 2021)
FormatTwenty20 (T20)
Governing BodyBoard of Control for Cricket in India (BCCI)
FounderLalit Modi
Most Successful TeamMumbai Indians (5 IPL Championships)
Popular TeamsMumbai Indians, Chennai Super Kings, Royal Challengers Bangalore, Kolkata Knight Riders, etc.
Auction for PlayersHeld annually to buy and sell players
Overseas Players Limit per TeamInitially 4, increased to 5 in later seasons
Venue for FinalsVaried, but often held in major Indian cities
TV Broadcast PartnersVarious broadcasters, including Star Sports
Brand Value (As of 2021)US$3.2 billion
Notable PlayersVirat Kohli, MS Dhoni, Rohit Sharma, Rinku Singh and many international stars

IPL Business Model 

So come to the most awaited question of this comprehensive article. What is the business model of the Indian premier league? Well, IPL has a mixed business model of cricket, entertainment and revenue generation. 

While doing our research we found 9 revenue sources of the IPL business model:

1. Team Ownership

Various franchise owners purchase the rights to own and operate teams in the IPL. These owners invest significant amounts of money to acquire teams and are responsible for team management, player acquisition, and marketing.

For example, the Mumbai Indians are the most valuable team in the Indian Premier League (IPL), with a valuation of $1.3 billion. The Royal Challengers Bangalore is the third-richest franchise, with a net worth of Rs 697 crore.

2. Player Auction

Before every IPL season, there is a player auction where teams bid to buy players. This creates a competitive environment as teams try to create the best team. Players earn salaries from their respective teams.

3. Broadcasting Rights

Live coverage of IPL matches has been allowed while ensuring adequate revenue flow. Global broadcast rights alone can generate more than a billion dollars.

Broadcasters also have the opportunity to resell parts of these rights to other territories. However, a significant portion of the revenue generated from these sales goes directly to the franchisees.

Another lucrative avenue for IPL franchises is television advertising. These advertisements appear regularly during live cricket matches, including during intervals between overs, providing an additional source of revenue.

4. Sponsorships

Sponsorship deals play a vital role in the revenue streams of IPL franchises. Teams enter into agreements with various brands including apparel companies, beverage manufacturers and mobile phone brands. These deals provide adequate funds to franchisees, which helps them cover their expenses.

5. Ticket Sales

Fans buy tickets to watch matches at the stadium. Ticket sales contribute to the revenue, especially for matches held in big stadiums such as Narendra Modi Stadium in Ahmedabad.

6. Merchandise and Fan Engagement

Merchandise sales serve as an additional revenue source for IPL franchises. These franchises sell team jerseys, caps and various accessories, which contribute significantly to their earnings. The popularity of IPL has led to a substantial demand for merchandise and franchises are taking advantage of this trend.

7. Advertising

The IPL provides advertising opportunities during matches, such as commercial breaks and digital advertising during matches. Companies pay for advertising slots to reach huge and engaged audiences.

8. Franchise Fees

Teams will pay the franchise fee per year, which is a constant revenue source of OPL. 

9. Digital Rights

The IPL sells digital rights, allowing streaming platforms to broadcast matches online. It attracts viewers who prefer to watch matches on digital platforms.

In Conclusion

Finally, these are the revenue sources of IPL , we hope you now have a better understanding of how IPL makes money. If we missed something, please comment below, and we will be happy to reply to your message.

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