Beyond Batting Averages: The Business of IPL

Did you scream when the IPL camera caught the first glimpse of Captain Cool MS Dhoni? Well, we definitely did!

The Indian Premier League kickstarted on Friday with a star-studded opening ceremony at the Narendra Modi Stadium in Ahmedabad. Right before the start of the 16th edition, this celebration of cricket became a decacorn with a valuation of approximately ₹90,038 crores (US$11 billion).

Cricket in India is not just a sport, it’s an emotion which binds the country together. Every kid grows up playing the sport from the streets to the stadiums. According to market research conducted by the International Cricket Council (ICC), cricket has over a billion fans globally with the Indian sub-continent alone constituting more than 90% of them.

The MVPs of IPL

The IPL has had a significant impact on the growth and development of Indian cricket and has helped establish India as a major cricketing nation. Here’s how the tournament impacts all the stakeholders involved:

1. BCCI (Board of Control for Cricket in India): The BCCI benefits from the IPL in various ways, including revenue generation and a boost to cricket infrastructure. The BCCI sold the 2023–27 IPL media rights for ₹48,390 crores last year; Star Sports paid ₹23,575 crore for the TV rights and Viacom18 paid ₹23,758 crore for the digital rights. A part of the IPL revenue is used by them to improve cricket infrastructure across India, including building new stadiums and improving training facilities.

2. IPL Franchises: The 10 franchises also stand to gain from broadcasting rights. 40-50% of the revenue is distributed among the franchises based on their performance and other factors. Apart from broadcasting rights, IPL franchises also earn revenue from sponsorships, ticket sales, merchandise sales, and other forms of endorsements. With a stated value of $1.02 billion (₹7,600 crores), Chennai Super Kings became India’s first sports unicorn in February 2022.
3. Players: One of the most significant impacts of the IPL on cricketers is the large salaries they receive for their participation in the tournament. The league attracts some of the biggest names in international cricket, and the top players earn millions of dollars for playing their part. Moreover, new cricketers get an opportunity to work with experienced cricketers and improve the quality of their game. Also, did we mention the crores that they earn in endorsements?
4. Fantasy Sports Companies: The fact that Ashneer Grover introduced CrickPe during IPL goes on to show how fantasy sports companies make the most of the cricket frenzy during the tournament. Fantasy sports have emerged rapidly growing industry in India, with both domestic and global investors showing a keen interest in the sector. According to estimates made by the Federation of Indian Fantasy Sports (FIFS) and Deloitte in 2022, the industry has attracted over ₹10,000 crores in FDI. This sunrise sector is expected to attract an additional ₹15,000 crore in investment over the next three years.

Is IPL an “impact player” for our economy?

The onset of the Indian Premier League (IPL) did change the financial dynamics for India. The IPL has emerged as a significant source of revenue for various stakeholders and has contributed significantly to the growth of the Indian economy. Here’s how the IPL impacts the economy:

1. Boost to tourism: The IPL attracts a large number of domestic and international tourists to India, who come to watch the matches and explore the country. According to Cox & Kings, one of the most well-known travel agencies, the IPL caused a staggering 30% rise in travel income.
2. Increased advertising and sponsorship revenue: It won’t be too ambitious to call IPL the Super Bowl of India. The entire amount spent on sports advertising across TV networks and digital platforms is predicted to reach ₹10,000 crores in 2023, according to media sources. The IPL (including the Women’s Premier League), will receive the lion’s share of the money, or ₹6,000 crores. It is anticipated that IPL ad income on TV and online would increase by 40% over the previous season.
3. Boost to the sports industry: The success of the IPL has helped boost the sports industry in India, with an increasing number of youngsters aspiring to become professional cricketers. This has led to the development of better infrastructure and facilities for sports training and has helped India establish itself as a major sporting nation.
4. Impact on GDP: The IPL has had a positive impact on India’s GDP by contributing to the growth of various sectors and drawing foreign investment. The 60-day tournament brought in ₹11.5 billion (US$182 million) to the Indian economy in 2021, according to a KPMG survey study, while the UN General Assembly for Peace and Development reported that it had an economic worth of US$3.2 billion.

The fanfare around the IPL 

IPL fanfare garnered more attention when celebrities started buying the teams. This was the origin of Bollywood marrying Cricket, long before Virat and Anushka, and the other couples. 

Why did celebrities invest in the IPL teams? 

It is an investment as IPL teams are valuable assets that appreciate in value over time. Many celebrities see this as an opportunity to invest their money and potentially earn a profit in the future. Additionally, owning an IPL team can help build a celebrity’s brand and increase its visibility. It can also provide them with a platform to promote their other business ventures.

Also, let’s not forget the passion for cricket every Indian has!

Tata’s takeover

The Tata Group has replaced the Chinese mobile phone manufacturer Vivo as the title sponsor of the IPL for the 2022 and 2023 seasons. Tata has also signed a five-year contract for WPL. BCCI received a total bid of ₹4,669.99 crore for Women’s IPL which is more than Men’s IPL in 2008.

House of Tata smallcase by Windmill Capital

The powerhouse of WPL 

With the start of the Women’s Premier League, India will finally be on the path to empowering women’s cricket. WPL will give India a chance to garner more eyeballs in women’s cricket.  The league’s structure is based on the structure of the IPL. Initially, there are five teams, with sides playing against each other in a double round-robin format, and the three teams finishing with the most points enter the playoff stages of the competition.

To sum it all up, IPL has an impact on the Indian economy as it produces numerous employment opportunities, from gatekeeper to player on the field and is the biggest sports event in India.