Completing a decade of revolutionizing cricket in India, the Indian Premier League (IPL), which started on 5 April 2017, continues to attract interest. Over its journey, starting from 2008, IPL has gone through many ups and downs – from controversy to financial irregularities and usage of drugs in post-match parties to betting and match-fixing scandals. But its acceptance among millions of television audiences and cricket lovers has not faded.  Right from players’ auction to the playoffs, every moment is followed and shared. Over the years IPL has become an integral part of Indian families’ must do list. So how much money is involved in IPL,what is the Prize money, How many are sponsors of IPL, What is cost of an IPL ad?

Not only people/fans are interested, advertisers are also interested in IPL, 50 days of high-voltage cricket on screen gives brands an opportunity to make a mark in the mind of viewers and hence advertising dollars’ flow in big numbers. IPL’s cumulative reach is estimated at $4.16 billion in 2016, according to global valuation and corporate finance advisor Duff & Phelps.

IPL has been the biggest platform for several brands in India, as it is the most popular sporting event in the country.  Brands pay a hefty fee to air commercials during the sports extravaganza making the event similar to the Super Bowl in the US, the annual championship of the National Football League (NFL), which is known for brands showcasing their biggest campaigns of the season.

Sponsors of IPL

Sponsors are the real source of income in the Indian Premier League. Teams have sponsors for everything. There are the main sponsor, a jersey sponsor and even a sleeve sponsor which is their main source of income. Everything that crosses the boundary rope and enters the field has a price tag, ranging from a player’s bat to the bails on the stumps.

For example, for For Punjab XI

• Telecommunications firm Idea and Johnson Tiles will both share the title of principal sponsor,
• Hero Cycles as an official sponsor.
• KEI, Arabol Lubricants, ItzCash, Hike Messenger and Lotus Herbals are the team’s official partners.
• TYKA is the team’s kit provider, and
• Sport & Beyond, T10 Sports and The Souled Store are all official merchandise partners.
• Furthermore, Astral Pipes, CP Plus, CashUrDrive, Big FM, Rajasthan Patrika and Punjab Kesari have all signed on with the Mohali-based team for the 2017 edition of the IPL.

Yes Bank and IPL

Let’s look at an example of how a bank like Yes Bank uses its sponsorship to IPL.

YES BANK, founded in 2004, took the Indian banking sector by storm and grew to become the fifth largest private sector bank. Recognized as one of the fastest growing banks, it offers a wide range of products that cater to personal banking, business banking, and corporate banking. YES BANK also provides a number of online and mobiles services through their website and app, along with other digital payment solutions. YES BANK offers a variety of savings account options, personal loans to cater to different needs of every customer.

Yes Bank has been a sponsor of IPL since 2013. Like its interest rate on saving banks of 6%, It awards the YES Bank Maximum Sixes (RS 1 Lakh prize money per match & Trophy)  to the player who hits the highest number of sixes during the match (including Super Over if applicable). In the case of a tie, the award will go to the player (of those who are tied) who hit the longest six.

Yes bank updates it facebook and twitter accounts regularly. It also has a page dedicated to IPL https://www.yesbank.in/beyond-banking/events Where it regularly updates interesting insights such as Is the IPL a bowler or a batsman’s game? Or Maximum Sixes Guarantee Wins for Teams – YES Bank.  It is safe to assume that a team has 75% chance of winning a match if the team manages to hit more sixes than the opponent. So far, 21 (out of 28) matches have been in favour of the teams with more sixes in their kitty. It can be ascertained from the numbers that sixes do guarantee wins predominantly. In short, more the #YESBANKMaximumSixes, better the chances of winning the match.

Media Rights of IPL

More than the teams, it is the BCCI that makes money from the media rights. Currently, Sony holds the broadcasting rights for IPL while Star has the online streaming rights.

Our article  Cricket: BCCI , BCCI Finances, and Lodha Committee talks about What is BCCI? Finances of BCCI, how it earns and spends? Why was Lodha Committee Formed? Recommendations of Lodha Committee?

Star India’s digital platform, Hotstar, has roped in 5 marquee sponsors and 18 spot buyers for the popular T20 league that kicked off April 5. Vivo, Maruti Suzuk, Reliance Jio, Dream 11, and AMFI are the marquee sponsors for IPL 10.

Sony Pictures Networks India (SPNI), the official television broadcaster of Indian Premier League, will be broadcasting the tournament for the 10th consecutive year. The media conglomerate acquired the rights for a 10 year period for Rs. 8,200 crore. 2017 is the last year of the ten year deal and the media rights are already up for bidding.

A typical IPL match has ad-inventory of 2,300 seconds or 38.33  mins.  The rates for an IPL ad are in 10-second slots. Typically, a title sponsor will buy a minimum of 300 seconds every match paying close to ₹5 lakh per second. Smaller sponsors cough up close to ₹5.75 lakh every 10 seconds, while spot buys of ads cost ₹6 lakh every 10 seconds. Which means that a 30-second commercial can cost as much as Rs. 18 lakh for a single run during an IPL game. Also, with 230 ten second ad slots to fill, the IPL rakes in over 12 crores in ads per IPL match. With 60 matches scheduled, the IPL makes nearly Rs. 720 crore from television ads alone.

Revenue of IPL for Sony over the years is shown in the image below

 

Prize money of IPL

The prize money for winning the Indian Premier League is RS 15 Crores which doesn’t sound too much given that a team like Rising Pune Supergiant spent Rs 14.5 crores on a single player like Ben Stokes http://www.iplt20.com/news/88270/ipl-awards-2017

VIVO IPL Trophy: To be awarded to the winning team of IPL 2017.

• Winners cheque: Rs. 15 crore
• Runner-Up Cheque: Rs. 10 crore
• Orange Cap (Rs. 10 lakh prize money & trophy): To be awarded by BCCI to the leading run-scorer of the season (including the Playoffs). In the event of a tie, the Orange Cap will be awarded to the player who scores most runs during the Playoff matches. If this does not break the tie, the Orange Cap will be awarded to the player (of those with the most runs in Playoff matches) with the highest strike rate over the season.
• Purple Cap (Rs. 10 lakh prize money & trophy): For the leading wicket-taker of the season (including the Playoffs). In there is a tie, the Purple Cap will be awarded to the player (of those tied) who took the most wickets during the Playoff matches. If this does not break the tie, the Purple Cap will be awarded to the player (of those with the most wickets during the Playoff matches) with the lowest economy rate over the season.
• Most Valuable Player (Rs. 10 lakh prize money & trophy): The Most Valuable Player (MVP) is one who has earned the most MVP points during the season (including the Playoff matches). MVP points are earned by hitting fours and sixes, taking wickets and bowling dot balls, catches and stumpings.

Are IPL owners making money?

Filings by five of the tournament’s eight teams with the Registrar of Companies (RoC), in Dec 2016, show that profitability has been going down over the years despite higher number of sponsors.

According to details of revenue accessed by BusinessLine and collated by data analytics firm Tofler, Shah Rukh Khan-owned Kolkata Knight Riders is the most profitable team with a total revenue of ₹124.6 crore and a net profit of ₹6.1 crore as on March 31, 2016. Khan’s team had, however, reported a higher net profit of ₹14.1 crore in 2015. Numbers for the current year will be available only by November-December when the companies disclose the same to the RoC.

Similarly, King’s XI Punjab, owned by Bollywood actor Preity Zinta along with Ness Wadia and Mohit Burman, too has been seeing shrinking profits with the net profit dipping from ₹12.7 crore in 2015 to ₹3.3 crore in 2016.

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• Is IPL the Indian Premier League the Indian Paisa League?
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Just past the halfway stage this Indian Premier League (IPL) season, front-runners and laggards are fairly well-defined. This is somewhat different from previous years, when the league would be “open” till the last fortnight, adding to the suspense. Given the unpredictability of the T20 format, it would be foolish to predict a winner at this stage. The performances of Mumbai, Kolkata and Hyderabad suggest that a well-conceived selection policy, with adequate bench strength that provides cover for the main players,is essential. Stars by themselves are no guarantors of success. So who is going to win IPL 2017?