Indian Premier League(IPL)

in a
Finance Perspective
Introduction
 Indian Premier League's origin is quite interesting.

 IPL has been launched in response to the rebel Indian

Cricket League (ICL) launched by Zee Group.

 It all started when Lalit Modi, the Vice President of the

Board of Cricket Control in India (BCCI) envisioned the
Indian Premier League.

 It is created along the lines of club football in Europe,

specifically the English Premier League.
How does IPL make money?

 Auction of broadcasting rights.

 Title sponsorship and corporate sponsorship.

 Sale of tickets (20% of tickets allocated to IPL).

 Auction of franchisees rights.

 Official Umpire’s sponsorships.

What are the sources of income for
an IPL Franchisee (ROI)?
 Share in revenue from broadcast rights (equal share for all
franchisee after IPL’s share).
 Share in sponsorship money (60% of the amount
distributed equally).
 Share in revenue from sale of tickets.
 Revenue from in-stadium advertising.
 Sale of players to other franchisees.
 Revenue from own sponsorship and corporate
sponsorship.
 How is the IPL income distributed?

 Share of broadcasting money with franchisees.

 Share of sponsorship money with franchisees.

 Share of ticket money with franchisees.

 Inauguration expenses.

 Prize money: $5 million ($3 million for winner; $2 million

divided among others).
How is the Franchisee income
distributed?
 Franchisee fees – 10% of total franchisee costs every year
to IPL.
 Players’ cost (Each franchise have paid around $4-6 million
per year).
 Match fees and Inauguration expenses.
 Rent of stadium (expense of around Rs.2.5mn per match).
 Marketing and promotional cost (around $3-4mn per
team).
 Fee for coaches, physiotherapists and other members.
 Administrative cost.
Inflows & Outflows
Taxation
 To be Accrued as Tax Deducted at Source (TDS) from the
remuneration paid to players, umpires, coaches, commentators
 Advertising, marketing and consultancy services of the sporting
extravaganza will be taxed under the service tax bracket
 Rs 91 crore as taxes (TDS) from the IPL 2008, while IPL 2009
hosted in South Africa had fetched a “few crores” as income tax
accrued from the BCCI (the organiser)
 Expected to rake in more than Rs 200 crore as taxes in IPL 2010

Source: Deccan Herald (Print media) March

Thank You