(WSG) and Sony for $1.026 billion for 10 years in a contract that is linked to thesuccess of the League and to television rating points (TRPs).In the first two years, 80 per cent of the money earned from the broadcast rights willbe shared by the franchisees equally with the rest going to IPL. The latter’s share willincrease gradually and by the fifth year, IPL will get to share 40 per cent of thebroadcast revenue.estate company in India, will be shared with the franchises. IPL will retain 40 per centof this and the balance 60 per cent will be shared between the franchisees equally.While these revenues accrue from the central pool to the franchisees, they willgenerate team sponsorship at individual levels as well.franchise will get seven matches at home and the revenues from ticket sales will beshared with IPL, which will get 20 per cent, with the rest going to the franchisee.franchise will get seven matches at home and the revenues from ticket sales will beshared with IPL, which will get 20 per cent, with the rest going to the franchisee.
INTRODUCTION The Board of Control for Cricket in India (BCCI), the apex governing body launched the Indian Premier League (IPL) On the lines of football’s English Premier League and the National Basketball League(NBA) of the U.S.A. Backed by the International Cricket Council (ICC), an international governing body of cricket. A virtual company. The IPL governing council is having five-year term and will run, operate and manage the league independently of the BCCI. Valued at approximately $4 billion (about Rs 18,000 crore).
BUSINESS MODEL works on a franchise-system based on the American style of hiring players and transfers. a sponsor wanting to have its team pays a stipulated fee to the BCCI to get ownership. franchisee also shares revenues with the cricket board. The franchises will own the team for perpetuity for a period of ten years. The franchisee, can, at a later stage list the team on the stock exchange and trade. main revenue streams for the franchisees are from the sale of broadcast rights, sponsorship, gate receipts in matches at their home grounds and team sponsorship
IPL FRANCHISEES Bangalore Royal Challengers : The Bangalore team was bought by Vijay Mallyas UB Group for$111.6 million. Deccan Chargers : The Hyderabad team was bought by Deccan Chronicle, a media house,for $107 million. Chennai Super Kings : The Chennai team was bought by India Cements for $91 million
Kolkata Knight Riders The Mumbai team is The Kolkata team is owned by Mukesh owned by Bollywood Ambanis Reliance actor Shah Rukh Industries Limited for Khan, actress Juhi $111.9 million Chawla and her husband Jay Mehta for $75.09 million. Mumbai Indians :
FRANCHISEE EARNINGS & EXPENSESRevenue Sources o Expenses Broadcast rights: The broadcast Franchisee fee : The two big rights have been sold by IPL to World expenses incurred by Franchise are Sports Group player costs and the Sponsorship: The title sponsorship Player acquisition cost : The fee of over $50 mn paid by DLF, a player costs was determined in the leading real auction. The Ticket sales: The final revenue Stadium Hire Charges : The source is ticket sales at home stadiums. franchisees also have to pay for the use Each of the stadiums Other sources : There are also other Other Expenses : There are also smaller revenue sources such as from in- other marketing costs such as events for stadium advertising a part of which will promotion go to the franchisee
PROFIT & LOSS ACCOUNT OF FRANCHISEE Kolkata Knight Riders REVENUES: 74 FRANCHISE FEE: Rs 300 Cr BCCI, SET MAX: 35 REVENUES: 89 TEAM SPONSORS: 25 BCCI, SET MAX: 35 GATE RECEIPTS: 14 TEAM SPONSORS: 34 GATE RECEIPTS: 20 EXPENSES: 80 FRANCHISE FEE: 36 EXPENSES: 81 TEAM: 25 FRANCHISE FEE: 31 AD, ADMIN: 18 TEAM: 25 AD, ADMIN: 25 NET LOSS: Rs 4 Cr NET PROFIT: Rs 8 Cr Chennai Super Kings FRANCHISE FEE: Rs 364 Cr
Deccan Chronicle FRANCHISE FEE: Rs 446 Cr FRANCHISE FEE: Rs 428 Cr REVENUES: 50 REVENUES : 64 BCCI, SET MAX: 35 BCCI, SET MAX: 35 TEAM SPONSORS: 0* TEAM SPONSORS: 19 GATE RECEIPTS: 15 GATE RECEIPTS: 10 EXPENSES: 95 EXPENSES: 84 FRANCHISE FEE: 48 FRANCHISE FEE: 45 TEAM: 22 TEAM: 24 AD, ADMIN: 25 AD, ADMIN: 15 NET LOSS: Rs 45 Cr NET LOSS: Rs 20 Cr Royal Challengers