Apr 8, 2010
The Indian Premier League (known as IPL), is a Twenty20 cricket competition initiated by the Board of Control for Cricket in India (BCCI) and supervised by BCCI Vice President Lalit Modi, Chairman & Commissioner for IPL. IPL was started after altercation between the BCCI and the newly-created Indian Cricket League.
Some Facts about IPL
- IPL is the first sporting event to be broadcasted live on Youtube.
- IPL is the second highest-paid league, based on first-team salaries on a pro-rata basis, only second to NBA league.
- DCI Mobile Studios (A division of Dot Com Infoway Limited), with Sigma Ventures of Singapore, have jointly acquired the rights to be the exclusive Mobile Application partner and rights holder for the Indian Premier League cricket matches worldwide for the next 8 years (including the 2017 season)
- The IPL negotiated a contract with the Canadian company Live Current Media Inc. to run and operate its portals and the minimum guarantee has been negotiated at US $50 million over the next 10 years. The official website of the tournament is www.iplt20.com.
- DLF paid around $50 million to secure the title sponsorship for the first five years and this is is renegotiable after the third year. If IPL Cricket gains momentum, it can be much higher.
IPL Concept Evolution
Subhash Chandra from Zee Group introduced the concept of Indian Cricket League (ICL) to dismiss the BCCI’s monopoly in Indian Cricket. ICL had proposal to appoint senior players from all cricket playing nations and young emerging players from indian domestic cricket. Lalit Modi with BCCI ideated a similar concept, with the consent of ICC using the new Twenty20 format. This was built on the pattern of the English Premier League.
IPL Guidelines for Franchises
- Clubs (Franchisee) should have their home ground.
- Each club can have a maximum pool of 16 players.
- Clubs must have four Under-21 youth players in their Pool of 16.
- Four players must belong to the territory where club was located or instituted.
- Each foreign player will be named ‘designated player’ and will be purchased through open bidding among the clubs for their next season.
- All the matches will be played under floodlights.
- An Inter and Intra division should be played among the said clubs.
- Intra division matches would be played on weekends while inter division matches will be played on weekdays.
IPL Player Auction & Trading Procedure
- All the players for IPL teams are selected through open aution. Individual players are placed for bidding by franchises and highest bidder becomes the buyer. Each player has a base annual fees which is based on pro-rata basis depending on his availability.
- Currently there are 10 franchises to bid for players. Each IPL Franchise has a maximum limit to spend on bidding for players, and the contract for each player is for 3 years.
- In addition, there are icon players whose fee is 115% of the highest player fee.
IPL Economics
Major Profit Resources for IPL
- 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.
Distribution of IPL Income
- Broadcasting Income is shared with franchisees.
- Sponsorship Income is shared with franchisees.
- Ticket Income is shared with franchisees.
- Expenses in Inauguration Show.
- Prize money: $5 million ($3 million for winner; $2 million divided among others).
IPL Franchisee Income Source (Return on Investment)
- Share in Broadcasting rights revenues: Equal share for all franchisee after IPL’s share.
- Share in Sponsorship money: 60% of the amount distributed equally.
- Share in Ticket Sale revenues.
- Revenue from in-stadium advertising. (Franchisee Home Clubs)
- Sale of players to other franchisee. (Player Trading)
- Own Sponsorship and Corporate sponsorships revenues.
Distribution of Franchisee Income
- Franchisee fees: 10% of total franchisee costs every year to IPL.
- Players’ cost: Around $4-6 million per year.
- Match fees and Inauguration expenses.
- Rent of stadium: Around Rs.2.5mn per match.
- Marketing and promotional cost: Around $3-4mn per team.
- Fee for coaches, physiotherapists and other members and management.
- Administrative cost.
The franchise fee is for the first 10 years, after which franchisees continue to own the teams for perpetuity. After the third year, a franchisee has the option to sell out.
hey very informative article.. i ‘ve been looking for this information about what profit the team owners make from ipl.
Thanks for giving the truth of this ugly orgy of money called as IPL, organised by the anti social nexus of politicians and cronies (called as business or industry. )This is a sure design to destroy the remains of sports in India.
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@All: Thanks for your comments.
@Ajit: This design is not a new design. Its very similar to English Premier League format. Just the difference is that corruption is more in India.
its super bowl of india
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News stories, “This is such a BIG deal”…………… I think I have been redacted.How to pay can be found on its website.
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Lalit Modi has just made the hay at the while otherwise the Zee group would have made the money out of this. Lalit Modi is no hero and ipl is not the brain child of him. he merely stole the concept and used his influence to get approval and gained popularity all around the world. We should not forget the IPL though it emerged india as a cricketing giant on the world map, but it had brought a major corruption in the system and a massive chance of money laundering.
I agree with you Karthik completely but it is always the Winner who makes the first use of the opportunity. Lalit Modi has done nothing new at all. This concept of IPL is not different from English Premier League. Money Laundering and other corruption of the system always finds new ways to come out. So if IPL wasn’t there then there were several other methods to corrupt, as you can see this in the misery of upcoming Common Wealth Games in India. Lalit Modi has charges on him and those are yet to be finalized and proven. We all have our perception to every event happening around us.
Whatever it may be. Whoever is the winner, but the loser is out country. When IPL was proposed then the plan was to invest the profit for upbringing other sporting events and culture in India. This idea seems to buried deep down the earth and Modi & Company are laughing all the way to Banks.
I second @Shishir’s version of competition. Its fair that Lalit Modi capitalized the idea faster that Subhash Chandra. Its always the Survival of the Fastest. The corruption involved is another problem and issue. It shouldn’t be combined with the IPL idea.
@Karthik: Its not the winning or losing. This debate about the IPL economics and corruption has ends at infinity. Better we should leave it in the hands of the committee to investigate it and do the needful. Our country can never be loser.
@Samyak: Thanks for your comments.
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