Professional Documents
Culture Documents
ARPAN GHOSH
PRASANTH NARISETTY
VAIBHAV DAHIMA
RAMAKANTH GOENKA
SHIVAM SRINIVAS
IPL- Business model
“An Innovative sports entertainment”
Brief intro…..
• The season commenced on the 18 April 2008 with the final match held
on 1 June 2008 and so far 8 different sessions has been completed.
• It was initiated by Lalit Modi, who served as the league's first Chairman
and Commissioner and Board of Control for Cricket in India (BCCI).
• In 2010, IPL became the first sporting event ever to be broadcast live on
YouTube.
Notes: W = Winner; R = Runner-up; = Semifinals/Knockouts; DNP = Did not play/participate; TBC = To be confirmed
The 2015 season of the IPL offered a total prize money of ₹40 crore (US$6.0 million), with the winning team
netting ₹15 crore (US$2.3 million). The first and second runners up received 10 and 7.5 crores, respectively, with the
fourth placed team also winning 7.5 crores. The others teams are not awarded any prize money. The IPL rules mandate
that half the prize money must be distributed among the players
IPL - BUSINESS MODEL
BUSINESS MODEL OF IPL
BIDDING PROCESS OF BCCI
Each squad
minimum 16 players 4 Players under 22
with max 4 from BCCI pool
international
TEAM AUCTION
TEAM CITY OWNERS PRICE (US$) BRAND VALUE
Year 2008 Year 2015
KXIP Mohali Preity Zinta, Ness Wadia (Bombay Dyeing), Mohit 76 million 32 million
Burman (Dabur)
KKR Kolkata Shahrukh Khan (Red Chillies Entertainment), Juhi 75.9 million 69 million
Chawla.
RR Jaipur Shilpa Shetty, Raj Kundra(UK Trade Corp Ltd) 67 million 45 million
American Appraisal, a Mumbai based valuation firm has valued IPL at $3.2 Billion.
It has also predicted that league’s value will skyrocket to over $400 Billion by 2020
REVENUE SIDE OF BCCI
4. Other Revenues:
1. Revenue from in-stadium advertising Main expenses Franchisees have to bear
2. Revenue from own sponsorship 1. Franchise fee to IPL
2. Player Acquisition cost
3. Sale of players to other franchises.
3. Stadium hire charges
4. Team costs (Coach, travel, insurance, office,
other expenses)
5. Marketing/ Promotion costs
REVENUE SIDE OF BROADCASTING
100%
90%
broadcasting Revenue in %
80%
70%
60%
50%
teams gets
40%
BCI gets
30%
20%
10%
0%
1 to 3 4 to 5 6 to 10
years
REVENUE SIDE OF PLAYERS
Daily allowance
IPL – ECONOMICS &
SWOT ANALYSIS
SWOT ANALYSIS OF IPL
STRENGTHS
WEAKNESSES
1. Short span i.e., 2 ½ hours therefore fast-
paced and exciting 1. It is the verge of damaging the game that
generated it.
2. Can be played on a weekday evening or
weekend afternoon 2. Stakes are very high!
3. Very appealing as a mass sport as a 3. Some teams have overpriced their
spectator sport as well to TV audiences. advertising/sponsorship in order to gain some
short-term returns
4. Revenue is maximized
OPPORTUNITIES THREATS
1. Large potential mass audience is very attractive as a 1. Maintaining the level of competition and interest in
marketing opportunity, especially for advertisers and IPL or else the revenue will fall.
sponsors.
2. It won't be a quick return on investment - so
2. The long-term success of all of the franchises lies in owners need to be in it for the long-term.
the generation of a solid fan-base who will generate
3. Franchises are very expensive. Therefore breaking
large TV revenues.
even will also take time.
3. Different markets and revenue sources will emerge
4. The most highly priced teams may not be those
for IPL.
that have the early success. Revenues will come from
4. Huge opportunity for merchandising. the most highly supported teams.
Economics of the Indian Premier League
Q: How does IPL make money?
Continued….
Economics of the Indian Premier League
Q: What are the sources of income for an IPL Franchisee (ROI)?
1. Share in revenue from broadcast rights (equal share for all franchisee after IPL’s share)
2. Share in sponsorship money (60% of the amount distributed equally)
3. Share in revenue from sale of tickets
4. Revenue from in-stadium advertising
5. Sale of players to other franchisee
6. Revenue from own sponsorship and corporate sponsorship