The Indian Premier League (IPL) is an annual men's Twenty20 cricket league in India comprising ten city-based franchises. The Board of Control for Cricket in India (BCCI) established the T20 league in 2007. It is the most popular cricket league in the world and it is as much about business as it is about cricket.
The ongoing IPL 2023 is the tournament's 16th season, which has reverted to its original home-and-away format after more than three years. All IPL 2023 matches are being broadcasted on the Star Sports channels as the Star Sports Network is the official broadcaster of this season. Meanwhile, the digital rights to the tournament are owned by Viacom 18, and live streaming of the matches will be available on the Jio TV app. The IPL franchises get money in a variety of methods.
Let’s take a look at the four-time IPL champions Chennai Super Kings' (CSK) Net Worth and sources of revenue in the IPL -
1. Media Rights
After selling media rights, BCCI generates substantial cash from broadcasters and over-the-top (OTT) platforms. It deducts its part, and a large portion of the revenue is then distributed to the IPL teams. BCCI guarantees franchises a financial share of 40-50% of the media rights revenue and it is the primary source of revenue for all franchises. The title-winning team receives the largest percentage of BCCI’s income.
This year, the media rights for the IPL 2023-27 cycle were sold for a total of INR 48,390 crore, making IPL the world's second most valuable sporting event, after only the National Football League (NFL) in the United States. Notably, this has risen three times since The Walt Disney Star paid INR 16,347 crore in 2017. While the TV rights for the Indian subcontinent were sold for INR 23, 575 crores over five years to Disney Star, Viacom18 got the internet rights for the Indian subcontinent for INR 20,500 crore.
Chennai Super Kings (CSK) are the second-most successful franchise in the IPL, having won four league titles. CSK reportedly got INR 201.65 crore in media rights revenue during the IPL 2022. Their revenue from media rights will probably go above INR 400 crore in IPL 2023.
2. Sponsorships
Sponsorship revenue is the IPL franchises' second-largest source of income, which reportedly forms around 20-30% of the total revenue for a team. In the IPL, there are two kinds of sponsors- brands that are IPL sponsors and brands that particularly work with the franchises. The BCCI receives money from IPL sponsors and distributes 40-50% of it to IPL franchises, while IPL teams individually partner with brands to increase brand visibility by endorsing their emblems on team kits and jerseys. Per Statista, CSK generated over 650 million through sponsorships last year.
Tata, an Indian multinational conglomerate, is the IPL's title sponsor for a cost of INR 440 crore, while Dream11, Saudi Tourism Authority, CRED, Upstox, RuPay, and Herbalife are the league's official partners. Aramco is the official Orange and Purple Cap Partner, Star Sports is the official Broadcaster, Jio Cinema is the official Digital Streaming Partner, PayTM is the official Umpire Partner, and CEAT is the official Strategic Timeout partner of the tournament.
Since 2022, TVS Eurogrip has been the principal jersey sponsor of Chennai Super Kings. After signing the deal, the franchise claimed that this collaboration will allow them to interact with the team's pan-India supporters through engagement initiatives. CSK's official partner is Garuda Aerospace Private Limited which focuses on the design, build and customization of unmanned aerial vehicles (UAVs) or drones for various applications. The team also has sponsorship deals with India Cements, Gulf Oil, British Empire, SNJ 10000, Reliance JIO, Nippon Paints, Astral Pipes, and Vision 11.
3. Stadium Ticket sales
One of the most important sources of money for IPL franchises is ticket sales revenue. According to reports, ticket money accounts for approximately 15% of the overall revenue generated by the franchises. Teams also make money by contracting third-party food and beverage providers for setting up stalls in stadiums.
Notably, the team's owners choose ticket prices. A certain percentage of the cash from ticket sales is shared with the sponsors and the BCCI, while the remaining amount goes to the team's wallet. The ticket costs are determined by the stadium's seating capacity, the excitement around the event, the city's standard of living, and other factors.
The MA Chidambaram Stadium, also known as the Chepauk Stadium in Chennai, Tamil Nadu, is the home venue of the Chennai Super Kings. Currently, the stadium is capable of accommodating 50,000 spectators. CSK's IPL home match ticket prices range from INR 1500 to INR 3000.
4. Merchandise sales
Merchandising is the practice and process of exhibiting and selling products to customers. Retailers utilize merchandising to impact customer intent and achieve sales goals, whether digital or in-store. According to a Research And Markets report, India's sports equipment and apparel market was worth $28 billion in 2022 and is likely to swell to $40.6 billion by 2027.
The IPL franchises also make money through the sale of official merchandise such as shirts, souvenirs, and athletic equipment. All the franchises distribute the products with the backing of several business organizations.
CSK signed 'playR' as their Global Official Merchandise Partner in December 2022. As part of the agreement, 'playR' will exclusively manufacture and market CSK's team clothing and CSK-branded cricket equipment, as well as create a variety of fan apparel designs for CSK fans to pick from. The other official merchandise partners of CSK are ICICI Bank, Fan Craze, Coca-Cola, Sunfeast Supermilk, and Hello FM.
5. Prize Money
The Prize money of the IPL, which drives the entire race of the points table, is actually quite minimal in comparison to other sources of income. In the previous editions, the IPL awarded a winning prize pool of 46.5 crores, with the winning team receiving a whopping INR 20 crore while the runners-up received INR 13 crore.
The losing team in the Qualifier 2 match received INR 7 crore in prize money, while the losing team in the Eliminator received INR 6.5 crore.
Earlier, it was reported that the BCCI intended to enhance the prize money by 20-25 percent ahead of the 16th edition of the IPL. The IPL 2023 prize money is yet to be officially declared. Although marginal in absolute numbers, the prize money increases the franchise's brand value, which aids in attracting the finest sponsors and a larger portion of media rights.
CricTracker Desk
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