IPL Business Model. How IPL makes money!
Indian Premier League (IPL) is one of the most popular and profitable cricket tournaments in the world. It features ten city-based franchises that compete in a T20 format every year.
But how does the IPL make money, and what is its business model?
Let’s explore the IPL business model and how it compares to other sports leagues. The IPL business model has three main sources of revenue: Broadcasting Rights, Sponsorships, And Ticket Sales. Broadcasting Rights: Broadcasting rights are the biggest source of income for the IPL business model, as it sells the rights to TV and online platforms to various media companies. The IPL business model recently signed a deal worth ₹48,390.5 crores ($6.2 billion) for the five-season cycle from 2023 to 2027, which is double the price from the previous deal. Viacom-18 acquired the digital rights, while Disney’s Star Network retained the TV rights.
The IPL business model also sold global rights and some non-exclusive rights to air 18 crucial matches of each season. Sponsorships: Sponsorships are also a major source of revenue for the IPL business model, as it attracts some of the biggest brands in India and abroad to associate with the tournament. The IPL business model has a central pool of sponsors, such as TATA, Unacademy, Cred, Upstox, and Tata Safari, who pay a hefty amount to get visibility across all the platforms and teams. The IPL business model also has some team-specific sponsors, who pay to get their logos on the team jerseys and kits. The more popular and successful a team is, the more sponsors it can attract and it can charge more according to its popularity. Ticket sales: Ticket sales are the third source of revenue for the IPL business model, although they have been affected by the COVID-19 pandemic. The IPL teams get to keep some percentage of the ticket sales when they host matches at their home venues. The ticket prices are decided by team owners, but they also have to share some revenue with BCCI and the sponsors. The ticket sales also depend on factors such as the team’s performance, star players, venue capacity, and also fan loyalty. Some other sources: Apart from these three major sources, the IPL business model also makes money from merchandise sales, prize money, and team ownership. The IPL business model sells official merchandise such as jerseys, caps, mugs, etc. through its online store and through partner outlets. The IPL business model also distributes prize money to the teams that qualify for the playoffs, with the winner getting the highest amount. The IPL teams also make money from selling stakes to investors or partners, who see value in owning a franchise in the tournament.
The IPL business model is unique and differs significantly from other sports leagues such as the English Premier League (EPL) or the National Football League (NFL). The IPL business model is owned and controlled by the Board of Control for Cricket in India (BCCI), which sets the rules and regulations for the tournaments. The IPL teams are not independent entities, but rather franchises that must pay fees to the BCCI and follow its guidelines. The IPL business model also has a shorter duration and a smaller number of teams than other leagues, which makes it more compact and exciting for the viewer. The IPL business model has been very successful in generating revenues and creating value for all stakeholders. The IPL business model is estimated to be worth $6.8 billion in 2020, making it the second-most valuable sports league in the world after the NFL. The IPL business model has also boosted the popularity and growth of cricket in India as well as abroad, creating opportunities for players, fans, broadcasters, sponsors, and advertisers.
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