How IPL teams make money

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IPL Sponsors

The main source of income comes from IPL sponsors like VIVO, Dream11, Tata Motors, etc. VIVO is the title sponsor of IPL11, so the main revenue comes from VIVO. All the money that comes from the sponsors is not given directly to the teams. The money is divided into a 60:40 ration between the IPL and BCCI teams. 60% of the money raised from sponsors is distributed equally among all teams and only BCCI keeps 40%. We can consider IPL as a company and the different teams that participate in IPL are only the franchise of the company other recognized companies. That is why BCCI takes 40% of the total money raised by the sponsorship.


 

This is the fixed and guaranteed amount that each team will receive each season. The distribution ratio could change in the coming years. Initially the ratio was 80:20, then it becomes 70:30 and now in 2019 it is 60:40.

Media rights

Star India gets the media rights for IPL at Rs 16,345 crore for five years (2018-2022). Star India will broadcast IPL for the next 5 years from 2018 to 2022. The money raised from media rights is also distributed in a ratio of 60:40, that is, 60% of the money distributed among all teams and 40 % of the money goes to the BCCI. This is another guaranteed income that every IPL team earns.

Dedicated sponsors

 

Each team also has dedicated sponsors who pay a large amount of money to the franchise. The logos and company names that you may see on each IPL team's apparel are actually the dedicated sponsors of their respective franchises. The earning of dedicated sponsors depends on the deal the franchise has made with the sponsor. The income generated by dedicated sponsors may differ from team to team. It completely depends on the size of the company sponsoring the team. And furthermore, there is not only one dedicated sponsor for each team, there are many sponsors for each team. In fact, the team jersey is full of sponsors. For example, the sponsor for Mumbai Indians is Samsung and Kings XI Punjab's is Aaj Tak. This is another way that each team makes money.

Ticket Sales

 

Teams also make a good deal of money selling tickets. But only the home team can win by selling tickets at their home field. The price of the tickets is set by the franchise at the beginning of the tournament and depends on the city, the way of life in that city, etc. The team with the largest seating capacity on the field makes more money selling tickets and the teams with a smaller field make less money. It is a great advantage for teams that have more ground. As we know, the Eden Garden stadium in Kolkata is the biggest stadium in India and therefore Kolkata Knight Riders (KKR) earn more among the other teams by selling match tickets. The capacity of the Eden Gardens stadium is around 75k, this is one of the reasons why KKR is one of the most successful teams in IPL if we talk about the earnings that each team makes.

Merchandise sales

During the IPL, the IPL teams also earn some money by selling official jerseys, hats, wristwatches, etc. This is not the best way for teams to make money, but it is quite good and generates a lot of money.

The Times of India reported that the growth of the sporting goods business market in the country is 100% annually and the value is projected to be approximately $ 30 million. This was in 2014, and the numbers have grown exponentially.

Prize money

Of course, it goes without saying that IPL teams can also earn an attractive amount of money by winning the IPL title. The 2019 IPL winning amount is 15 million rupees and the second prize is 10 million rupees.

 

Prize money won by IPL teams is distributed between players and owners in a 50:50 ratio. A minimum of 50% of the prize money is distributed among all players on the team. A minimum distribution of 50% between the players is necessary, but if the owner wants to give more than 50%, it is up to him. This is another great amount that a team can earn. This winning amount makes a big difference in the total profit of the franchise.

Exchange of players

 

Before the IPL auction, a transfer window opens for some time. During that time, a team can trade a player with another player with some money as compensation.

Stall rental

The food and drink stand that serves people during the matches is transferred by contract to the third party.

The third party has to pay some money to the team as per the deal with the franchise. This is a fixed amount of money that every team earns per match.

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