View Full Version : IPL - Where Does All The Money Come From ??
TheSheik
18 Apr 2009, 22:12
Just watching the first match of the new season being played in South Africa, they showed an overview of the two teams and how much the franchise costed their owners.
One was $111 million and the other was $93 million....... :eek:
These are serious amounts of cash and that is for just two of the the teams in a 16 team competition.
Now does anyone know where this money comes from and how (or if ) they recoup it ??
I realise that TV coverage comes into it somewhere as does the uniform sponsors but I'm really struggling to work out how it all adds up.
Anyone got an inside view of the workings of this comp ??
Advertising, sponsorship, tv revenue, tickets...
I have no idea.
The money comes from actors, steel magnates, oil etc. There is a lot of money in India and the plans are to increase the salary cap next season by about another 3 million.
TheSheik
18 Apr 2009, 22:19
Advertising, sponsorship, tv revenue, tickets...
I have no idea.
They are the obvious things but don't forget, there are ground hire, umpires, TV commentators & cameramen etc etc etc. It's just not the players who are in on this thing too.
The ticket costs would not raise that much so it has got me buggered how this tournament is actually able to make money.
Maybe some kickbacks from betting agencies ??
TheSheik
18 Apr 2009, 22:21
The money comes from actors, steel magnates, oil etc. There is a lot of money in India and the plans are to increase the salary cap next season by about another 3 million.
So are you saying that these rich folk just tip in $100 million each every year to have their own cricket team without getting a return on their money ??
I know there are some very rich people in India but there aren't too many people inthe world that can p1ss away that amount of money every year.
Yep do a google search and you will be shocked how much cash these people have pumped into the IPL.
dr nick
18 Apr 2009, 22:24
theres a $1b tv deal floating around of which 50% of that goes to the franchisees.
so basically Sony/World Sport Group is paying 3 months rice supply per injun following this thing.
and yep, some of the owners are very Alan Stamfordesque
TheSheik
18 Apr 2009, 22:33
theres a $1b tv deal floating around of which 50% of that goes to the franchisees.
so basically Sony/World Sport Group is paying 3 months rice supply per injun following this thing.
and yep, some of the owners are very Alan Stamfordesque
The $1Billion TV deal, is that kosher or just urban myth ?? It's an offensive amount of money, in fact I can't even type it out, there's too many zero's.
If 50% of that money gets put back to the individual franchisees, how much is that per team that they receive ??
The TV deal is $1 billion, the first year it was about $850 million I think.
I'm sure with all the amount of money that this competition brings in, from a magnitude of sources, it all evens out, or goes close to evening out for the guys that put money in.
Player salary rates aren't even the beginning; I remember hearing stories of team bosses buying players TV's and expensive goods for good performances or team wins.
TheSheik
18 Apr 2009, 22:42
The TV deal is $1 billion, the first year it was about $850 million I think.
So using those figures, last year there was $425million tipped back to the teams/clubs.
That's only around $26-27million each so there is a huge deficit if the franchisees are paying around $100million for their players.
If you add that extra $150million to the rights, that means that there is an additional $75million to be divvied up to the clubs which takes it up to around $31-32million each.
Mate, they must have Nehru suits with large pockets ..........
lol yes they do, but just have a look who some of the owners of the teams are. Rumours are they want to have a team from each test playing country as well, but not too sure about that one.
So using those figures, last year there was $425million tipped back to the teams/clubs.
That's only around $26-27million each so there is a huge deficit if the franchisees are paying around $100million for their players.
If you add that extra $150million to the rights, that means that there is an additional $75million to be divvied up to the clubs which takes it up to around $31-32million each.
Mate, they must have Nehru suits with large pockets ..........
$30 million just from TV rights. Then you factor in sponsorship (which would be large sums of money), general advertising, ticket revenue, and I'm sure there would be a whole lot more sources of money.
dr nick
18 Apr 2009, 22:52
not to mention the web hits they get from people trying to log onto the internet public library.
TheSheik
18 Apr 2009, 22:56
$30 million just from TV rights. Then you factor in sponsorship (which would be large sums of money), general advertising, ticket revenue, and I'm sure there would be a whole lot more sources of money.
Each team would need to find $70million after the TV rights to break even.
Sponsorships aren't going to get half of that due to the fact that it is only a 13-week competition.
Ticket revenue would be negligible especially when the games are played in India, they just can't charge exorbitant fees.
General advertising ?? Well they would be the ones paying for the advertising of the games and the tournament so that doesn't work.
Ground signage would be something that the ground owners would gain the revenue from.
TheSheik
18 Apr 2009, 22:56
not to mention the web hits they get from people trying to log onto the internet public library.
Web hits get them peanuts, especially as their site is not working right now, I tried to look.
They do make a lot from general advertising as well. I think the IPL is a good thing, players who aren't world stars can make a name for themselves and get the national selectors to take notice and in the process make some money as well.
TheSheik
18 Apr 2009, 23:00
I'm not against the IPL at all, just don't understasnd how it works financially as it is a rather large production with some very large operating costs.
I don't understand all the nitty, gritty either. But yeah there is a ton of cash floating around there.
It would be interesting if the competition runs at a financial loss. But, I think you will be surprised by where the income comes from, and how much it is.
In the first year it made a profit. Which is mind blowing, considering how much money was pumped into it.
Just watching the first match of the new season being played in South Africa, they showed an overview of the two teams and how much the franchise costed their owners.
One was $111 million and the other was $93 million....... :eek:
These are serious amounts of cash and that is for just two of the the teams in a 16 team competition.
Now does anyone know where this money comes from and how (or if ) they recoup it ??
I realise that TV coverage comes into it somewhere as does the uniform sponsors but I'm really struggling to work out how it all adds up.
Anyone got an inside view of the workings of this comp ??
It's an 8 team competition.
Double your estimates.
From the current TV Rights (US$1.026 Billion), each team gets at least 54%. That's be in the US$65-70
Add in the fact that due to the fact that this years competition is in South Africa, the IPL body is footing the travel expenses so that the franchises don't have to post a loss.
Then there's the clothing and ground sponsorship.
If this article is to be believed, teams like the Mumbai Indians get $2 million per game from India Cell, with $3 million for each final.
http://www.iplpulse.com/ipl/mi-ipl/mumbai-indians-close-to-signing-up-record-sponsorship-deal-with-idea/
Did I mention ground sponsorship?
http://news.in.msn.com/business/article.aspx?cp-documentid=1289998
IPL sponsorship up for sale at $200mn
Mumbai: WSG, BCCI's marketing partner, in talks with three companies to sign $200 million deal for ground sponsorship.
World Sport Group India (WSG), the sports marketing partner of the Board of Control for Cricket in India (BCCI), is in talks with three more sponsors, one each from the banking, petroleum and airlines industries to sign deals worth $200 million (about Rs 800 crore) for ground sponsorship of the Indian Premier League (IPL) matches. These sponsors will have an opportunity to exclusively advertise their brands on the grounds for five years. DLF, the title sponsor, has already signed a deal with BCCI and WSG for $50 million and co-sponsor Hero Honda has committed $22 million.
That's $40 million a year.
Add to that the 6% of TV rights that goes towards prize money and you've got a shitload of money in the pot.
If you want a good example of this, the Royals were bought for $67 million, payable over 10 years.
As a result of that,
Badale offered his $US140 million valuation during a February 3 press conference in Mumbai, where he announced that Bollywood and Big Brother UK star Shilpa Shetty and her partner Raj Kundra were investing in the Rajasthan Royals.
Badale told the press conference that Shetty and Kundra were taking a stake of “about 12 percent” in the team. Though no pricing details were released, India media reports say they are paying as much as $US15.4 million for 11.7 percent of the franchise.
You do the math! :eek:
Yeah it is mind blowing how much money is in the IPL.
TheSheik
19 Apr 2009, 11:10
I could of sworn there were more teams than eight but there you go ...
That means that they are up to around $55-60million in returns from the TV rights.
Read that article again, it's $2million from Idea Cellular for the season, not per game.
The clothing sponsorship is part of that deal, not an extra. The ground advertising is normally maintained by the owners of the ground and do not come into calculations.
I'm still sceptical as to where it al lcomes from.
I could of sworn there were more teams than eight but there you go ...
That means that they are up to around $55-60million in returns from the TV rights.
Actually, I was wrong. For the first 5 year, 72% of the television rights go to the franchises.
So of a total of $1.026 Billion, each club gets 92.34 million.
Read that article again, it's $2million from Idea Cellular for the season, not per game.
Oh yeh, so roughly $2 million per club then, shall we say?
The clothing sponsorship is part of that deal, not an extra. The ground advertising is normally maintained by the owners of the ground and do not come into calculations.
I'm still sceptical as to where it al lcomes from.
The grounds obviously pay a percentage of their ground sponsorship revenue towards the club. Why else would the clubs play there if they could be given a better deal elsewhere?
So that's 92.34 + 2 + 15 (guesstimate).
Rough total of $110 million.
Happy?
Edit: Throw in another $2 million from Pepsi (http://www.premierleaguenews.in/ipl-news/ipl-sponsorship-rights/).
TheSheik
19 Apr 2009, 18:20
Actually, I was wrong. For the first 5 year, 72% of the television rights go to the franchises.
So of a total of $1.026 Billion, each club gets 92.34 million.
Oh yeh, so roughly $2 million per club then, shall we say?
The grounds obviously pay a percentage of their ground sponsorship revenue towards the club. Why else would the clubs play there if they could be given a better deal elsewhere?
So that's 92.34 + 2 + 15 (guesstimate).
Rough total of $110 million.
Happy?
Edit: Throw in another $2 million from Pepsi (http://www.premierleaguenews.in/ipl-news/ipl-sponsorship-rights/).
Happier shall we say.
Still can't believe that percentage of the TV rights gets tipped back to them. (I'm not doubting you, just gobsmacked).
TheSheik
19 Apr 2009, 18:28
Just had a look at that article, the 5 main sponsors are going to tip in $111.5 million over 5 years between them which works out at $22.3million per annum. 54% of that money will go to the franchisees meaning that they each will get $1.505mill from the sponsorship bucks.
It has to be all about the TV rights because nothing else stacks up !!
perthbombersfan
19 Apr 2009, 18:49
makes you wonder.
how can there be that much money to inject into cricket, yet they couldnt even find lights for the grounds in the windies for the last world cup.
The Windies are in a sorry state a the moment. Hence the players are a bit pissed off they can't play the whole season of the IPL, a few of them were saying they shouldn't have toured England when they knew the IPL was on.
LIONS then DAYLIGHT
20 Apr 2009, 02:24
In the first year it made a profit. Which is mind blowing, considering how much money was pumped into it.
Have you got a source for that info?
Im sure i read that last year very little money was made, and that it would be 2 or 3 years until franchises start making a reasonable profit?
some people want the ipl to fail for their own personal agendas.
Have to agree with you, some people are just jealous and some have other reason.
Ill Chicken
20 Apr 2009, 23:59
I don't see how you can question the amount of money paid for the IPL TV rights. AFL TV rights cost what $500 million AU for population of 22 million, maybe 100 million audience world wide. EPL TV rights cost 1.3 billion pound for a audience of roughly a 1 billion or more. While IPL costing a 1 billion for an audience of over a billion.
Works out.
I think there are roughly 50 million ‘middle class’ Indians. And I think they follow their cricket more fanatically than we do our footy. They don’t have any rival codes either. The whole country loves their cricket.
Reckon that all equals the potential for massive dollars.
I think there are roughly 50 million ‘middle class’ Indians. And I think they follow their cricket more fanatically than we do our footy. They don’t have any rival codes either. The whole country loves their cricket.
Reckon that all equals the potential for massive dollars.
Nicely posted.
LIONS then DAYLIGHT
21 Apr 2009, 00:34
Have to agree with you, some people are just jealous and some have other reason.
I think many people have concerns regarding the future of the game with regards to test cricket and the impact IPL will have on that facet of the game.
Remember, countries like NZ, Sri Lanka, West Indies even South Africa, don't pay there players anywhere near as much as what Australian players are paid by their respective cricket board.
Many people that are Australian hope Ponting fails with the bat each time he goes out to play because they are jealous of his success.
Just like many people hope Buddy fails when he plays for Hawthorn because his so good and because he knows it.
Just like many people did cartwheels when Geelong lost last year, because their club wasn't as good as Geelong.
It is a fact of nature.
I think many people have concerns regarding the future of the game with regards to test cricket and the impact IPL will have on that facet of the game.
Personally I think test cricket will be okay. I think that OD cricket may well be in huge trouble.
Test cricket will forever and always be the ultimate. But I can see T20 overtaking 50 over games in the near future.
LIONS then DAYLIGHT
21 Apr 2009, 00:46
Im not sure.
Test cricket crowds are very poor outside Eng and Australia. Those crowds during the India-Australia series were shocking for the premier series on the cricket calender. Surely that is saying something?
ODI cricket is still very heavily supported. As such I feel that ODI cricket will be fine, but test cricket will suffer. Countries like the West Indies and Sri Lanka don't pay there players much, as such the IPL is seen as a chance for those players to earn substanially more money and set their family up. Most players are going to do what is best for there family and rightly so.
Therefore if players start choosing IPL over playing test cricket then test cricket becomes weaker. Eventually the weak die.
With all the money in the game surely players can be paid a base rate in all countries.
You have to understand that in India all the money is made from TV. Half a billion people love their cricket, it's no coincidence that when India started getting cable TV, broadband internet etc test crowds started dwindling. Test cricket is still the ultimate and if you ask the ordinary Indian fan in the street they will say the same thing.
Ill Chicken
21 Apr 2009, 00:58
The ICC has concerns over the ICL having national sides competing as a spin-off to their league as it may create another world cricket competition. But at the same instance, IPL are considering the same thing, which could then further create a division between players and their countries, not players and test cricket.
Basically the power of the BCCI could take cricket into a seriously dark age where the success of India out weighs the success of cricket as a sport and also puts the playing for club greater than playing for country. While the ICC do a seriously good job of undermining themselves, the BCCI are doing it to the detriment of all the national cricket bodies as well. Restricting players from playing ICL has only served to strenghten the India side by destablising the opposing international sides who are unable to compete with the dollar signs of privatised cricket.
As for ODI cricket is a great a stepping stone for potential test players. It gives players a chance in the spotlight without the pressure of needing to perform immediately. The removal of ODI cricket could impact Test cricket greatly and I don't think this has been largely considered.
Ill Chicken
21 Apr 2009, 01:02
You have to understand that in India all the money is made from TV. Half a billion people love their cricket, it's no coincidence that when India started getting cable TV, broadband internet etc test crowds started dwindling. Test cricket is still the ultimate and if you ask the ordinary Indian fan in the street they will say the same thing.
Also considering the facilities at some of the international stadiums in India, they are hardly accommodating for the average punter. It's not like a day out the back of Adelaide Oval or on the hill, which is probably the least developed of the Australian grounds.
LIONS then DAYLIGHT
21 Apr 2009, 01:44
Those lack of facilities have really mattered in the past haven't they?
They used to pack the stadium out with no inch of space space.
That excuse is simply incorrect.
Ill Chicken
21 Apr 2009, 02:01
Those lack of facilities have really mattered in the past haven't they?
They used to pack the stadium out with no inch of space space.
That excuse is simply incorrect.
Why is it incorrect and where did I say it was an excuse?
I've said that it was a contributing factor, not "the reason" for the lack of crowds.
LIONS then DAYLIGHT
21 Apr 2009, 02:13
India has never had the best facilities at all with regards to spectator comfort, yet in the past that hasn't stopped them absolutely packing out the stadiums for test cricket.
So the excuse that the facilities aren't good enough to attract a crowd is simply not true.
I think the main contributing factor is that they prefer watching ODI's/T20's.
But lets agree to disagree, i don't want to turn this thread into a Ill Chicken V LtD battle.
Ill Chicken
21 Apr 2009, 02:31
So the advent of broadband internet and cable television at low cost price for Indians of low incomes making it possible to watch cricket in relative comfort of their own homes in comparison to paying what is rumoured to be between a week's and a month's pay for a ticket on a concrete seat can't possibly be considered a determining factor in why stadiums aren't reaching anywhere near capacity.
LIONS then DAYLIGHT
21 Apr 2009, 02:54
No not really, if it did then shouldn't the ODI's and T20's have reduced crowds.
It's called variables, when investigating one thing you want to have as many variables the same while only changing one variable. This ensures that any change in your observation can be attributed to a changing variable.
Firstly, why don't those people watch ODI's and T20's on their cable tv's?
I think the OP is a bit confused. The $100 million odd paid by the owners is to buy the Franchise. Thats a one off payment.
In the 1st year each team had a salary cap of US$5million. That has now been scrapped so there will be no salary cap from now on.
Ill Chicken
21 Apr 2009, 20:14
No not really, if it did then shouldn't the ODI's and T20's have reduced crowds.
It's called variables, when investigating one thing you want to have as many variables the same while only changing one variable. This ensures that any change in your observation can be attributed to a changing variable.
Firstly, why don't those people watch ODI's and T20's on their cable tv's?
Prove it statistically.
TheSheik
21 Apr 2009, 21:06
I think the OP is a bit confused. The $100 million odd paid by the owners is to buy the Franchise. Thats a one off payment.
In the 1st year each team had a salary cap of US$5million. That has now been scrapped so there will be no salary cap from now on.
That's not how I understood it to be.
The other night they flashed up the standard info on both of the teams playing in that match and who was their highest paid player etc. In bold they had 'Franchise Price' and they both differed meaning that it was what they were paying the players in total for that season.
However, the anomaly is that the highest paid player was around $1.2-1.5 million so I'm wondering where the rest of the money was going ??
They couldn't have 100 players on a mill each could they ???
Do they have one year contracts though?
I think it's 2 or 3 years, but they can be traded if they want to join another club.
So that would be $100 million of player fees over the course of a few seasons of IPL. Not so bad, with all the money coming in from sponsorship and TV rights every season.
I wish I was good enough and go play in the IPL. Make a quick few hundered thousand. ;)
TheSheik
21 Apr 2009, 21:44
I wish I was good enough and go play in the IPL. Make a quick few hundered thousand. ;)
If you were good enough you could make a lazy mill for 3-months work.
grayham
24 Apr 2009, 15:41
The IPL will save cricket in small countries like NZ, West Indies.
Players in those countries, could only expect a 100-200K wage for the half dozen or so years they are in the game. Big incentive to get a real job, or try another sport. Now with IPL, they are not locked into a wage structure depended on their own country.
eg. A good west indian cricketer in India can earn as much as a good west indian basketball player in the US.
Black Thunder
25 Apr 2009, 01:54
Maybe some kickbacks from betting agencies ??
underground betting is rife in india. it is big big big business.
there was no way the IPL wasn't going to go ahead because of this.
Underground betting is rife everywhere in the world.