IPL- THE GAME BEYOND THE PITCH

What is the Indian Premier League (IPL)?

The Indian Premier League is the oldest, richest, and the most popular T-20 league in the world, imparting glamour to cricket. The IPL has been achieving new milestones every year, as it has not only surpassed some well-established leagues like the Premier League or the NBA, in terms of being the most valuable league but it had also acted as a ray of hope during the days of Covid-19. But, what was the history and intention behind the creation of this league

A Star is Born

The origin of the IPL dates back to 2007, a year worth remembering for all cricket fans and a significant year in the history of Indian cricket as Yuvraj Singh mesmerised everyone with his 6 sixes in 6 balls and India won the T20 World Cup. However, the next year saw the infamous recession in which businesses all across the world incurred heavy losses. Yet amidst the doom, the Board of Control for Cricket in India (BCCI) and Lalit Modi spotted some critical market indicators and thought that the cricket market in India was ready for a domestic league.

They capitalised on the new format which Indians had fallen in love with post India’s performance in the T20 World cup. A T20 game lasts for only 3 hours which makes it convenient for viewers to watch the entire game. They also eyed the fact that the league could serve Indian teens who watched cricket as a source of entertainment during vacations.

However, as every great business idea has a prototype, the IPL was also in the making since 1996, when Lalit Modi was fascinated by the working of domestic leagues in foreign nations. He first proposed the idea of a league in an ODI (50 overs) format, but receiving a cold shoulder from BCCI he himself implemented the idea of the Indian Premier League after becoming the Vice President of BCCI in 2005.

The Bigger Picture- Business Model

Before the IPL came into existence, a similar league called the Indian Cricket League (ICL) was operating and funded by the Zee Group. A major obstacle to its functioning was the BCCI threatening its survival. Players were faced with the possibility of getting banned from playing international matches if they joined the ICL. In a bid to outperform ICL, the BCCI gave birth to the Indian Premier League on 13th September 2007.

Earning Model

The centre of the entire business model of the IPL is the BCCI which is also a private entity similar to Zee Group, but since it is recognized by the ICC as the sole representative of the Indian Cricket Team, it has more autonomy.

The revenue earned by BCCI is bifurcated into 2 segments - 50% is retained by them and the remaining 50% is given to franchise teams. A major chunk of revenue comes from sponsors of different categories which include-

1. Title Sponsors- They are the sponsors whose name gets attached to the IPL. Through this whenever viewers take the name of the league, they are reminded of the name of the title sponsor. Currently, Tata is the title sponsor of IPL and they have agreed to pay a sum total of ₹330 Crores per year for a contract of two years. Comparing this amount to the amount that DLF agreed to pay to grab the opportunity of being the title sponsor for the first years we observe a massive increase of ₹290 Crores.

1. Official Sponsors- These are those sponsors who pay a specified sum of money to add their name to a specific aspect of the match. Ceat sponsoring the strategic timeout for an amount of approximately ₹30 Crores and Cred sponsoring the power play, are some prime examples. In totality, it has been estimated that the BCCI earns nothing less than ₹210 Crores from all the official sponsors.

1. Rights to Broadcasters- There has always been a battle between multiple broadcasters to have a chance to win these rights in order to telecast the entire IPL on their channel/platform. It helps them to increase their viewership, and generate more revenue with the help of selling a specified period of time to different companies in which they can display their advertisements and promote their products. Such practice opens a wide horizon of earning higher profits as an advertisement of merely 30 seconds is sold for multi millions. At present, Disney-owned Star India has retained the domestic rights, and Viacom 18 bagged the rights for digitally broadcasting the event in the Indian subcontinent, whereas, for the Middle East and the US the digital rights were picked up by Times Internet whose parent company is Times Group. These companies have jointly spent a sum of ₹8,200 crores for such rights.

Team Earnings

From a viewer’s perspective, we may conclude by saying: winning the IPL, but this is just the tip of the iceberg. An IPL team’s main source of income is through the sale of their merchandise, conducting matches at their home grounds, receiving funds from the BCCI, and increasing their brand value. When a match is conducted at the home ground of a team, the team is allowed to keep 80% of the proceeds from the sale of tickets whereas 20% has to be given to the Home State Cricket Association. Teams buy famous players in the auction to promote themselves, win the IPL in order to attract more viewers and increase their brand value. The increased brand value will help a team to sell their merchandise better and open another stream of revenue. With regards to the expenditure, it is the obligation of the franchise to remunerate the players, pay their wages, look after their training and maintain their home stadiums. Thus, it can be concluded that there are bigger objectives than simply winning for an IPL team.

Even players coming from different countries have to pay a specified sum from their earnings to their respective cricketing boards which in turn motivates the board to avoid any clash between the schedules of the IPL and international cricket; this allows the players to remain available during the league. To distinguish the IPL from its competitors, the BCCI refuses to give NOCs (no objection certificates) to Indian players forbidding them from participating in foreign leagues and this acts as the USP of the IPL.

IPL VS NFL

After the fierce war between multiple broadcasters for the rights, IPL’s per match value now amounts to $13.4 million which is much more than the National Basketball Association (NBA) and the Premier League, but the National Football League (NFL) still stands first with the per match value as a whopping $17 million. The NFL is an American football league whose popularity is limited not only to the USA, Canada, Mexico, and surprisingly Japan too.

NFL Earnings

The NFL still beats the IPL in terms of value as their business model consists of a very problematic aspect: legalised gambling. In addition to that, the NFL also conducts the Superbowl once a year in which one team from each division of the league face each other. Moreover, celebrities and musicians also perform in the event which attracts even those individuals who may be unaware of the sport.

In conclusion, the sky’s the limit of growth for the IPL and it has reached a level where the amount of money involved in it can be easily misused but with adequate supervision of the BCCI, the IPL can become the most valued league across the globe. At the end of the day there’s much more to this game of money than a double super-over.

Citations-

1. Times Now News. (n.d.). IPL vs EPL vs NBA vs NFL: How the T20 league compares to other sports leagues over per-game revenue. Retrieved from https://www.timesnownews.com/sports/cricket/ipl-vs-epl-vs-nba-vs-nfl-how-the-t20-league-compares-to-other-sports-league-over-per-game-revenue-article-92193906
2. Britannica. (n.d.). Indian Premier League. Retrieved from https://www.britannica.com/topic/Indian-Premier-League
3. Times of India. (n.d.). IPL media rights at Rs 104 crore: IPL overtakes EPL in per-match value. Retrieved from https://timesofindia.indiatimes.com/sports/cricket/ipl/top-stories/ipl-media-rights-at-rs-104-crore-ipl-overtakes-epl-in-per-match-value/articleshow/92169438.cms
4. SportsPro. (n.d.). IPL: Inside India’s TV and media rights scramble. Retrieved from https://www.sportspromedia.com/analysis/ipl-t20-cricket-india-tv-media-rights-disney-star-viacom18-times-internet-bcci/
5. Financial Express. (n.d.). IPL media rights: BCCI hits a six while Viacom18 and Star India scramble for the ball. Retrieved from https://www.financialexpress.com/brandwagon/ipl-media-rights-bcci-hits-a-six-while-viacom18-and-star-india-scramble-for-the-ball/2566141/
6. India Today. (n.d.). From the archives 2008: How Lalit Modi became the Lord of IPL. Retrieved from https://www.indiatoday.in/india-today-insight/story/from-the-archives-2008-how-lalit-modi-became-the-lord-of-ipl-1976983-2022-07-18