Decoded: IPL and its big badass business model

No. We aren’t talking about a tech unicorn living on investors money, but this one is profitable and most of us love it !
Well, it’s the damn IPL business and coincidentally, there is a Modi behind it.
Lalit Modi’s brainchild, IPL is valued at $4.16Bn valuation as of last year and is expected to cross $5Bn valuation by end of the 2017 season.

IPL Revenue
IPL Revenue

IPL Business Model

The biggest source of revenue for IPL is the media rights (this year, Sony is expected to earn Rs. 1,300 crores), followed by sponsorship (Oppo spent Rs. 1079.29 crores for the apparel and gear sponsorship rights, Vivo : 750cr+) followed by ticket sales. Part of sponsorship money is distributed to the franchisees based on their performance.
What about the IPL teams? It’s almost a winner-takes-it-all game. Prize money is often the biggest revenue earner (it was Rs. 40 crores in 2015). Each team has a main sponsor and other associate sponsors. They also sell the merchandise of their kits and dress. The hospitality revenue is through stall revenues in stadium. One of the biggest source of revenue for IPL teams still is the (IPL) revenue share that BCCI pays to the teams.

SRK’s KKR recorded profits of Rs. 14.15 crores in 2016 (against 9.19 crore in 2015). The revenue of KKR team stood at Rs 168.71 crore in 2014-15, up from Rs 128.81 crore in the previous year – they are still the smartest ones around.
RCB recorded a loss of Rs. 30 crores in 2014-15. Delhi Daredevils too is in the red. Preity Zinta’s Kings XI Punjab made a net profit of Rs. 3.3 crores in 2016 (via).

IPL : The sales and drama engine

Everything around IPL is up for auction to sponsors – right from players jerseys to helmets, team training kits and even the barricades. And then, there is drama / controversy and it almost feels like an extended Bollywood movie.
If there is one phenomena that has mixed industry India’s madness, brand interests and massive commerce, it’s the damn IPL.
Slightly (un)related, but for the love of Sachin (and cricket), watch this one!

[Via: 1, 2]

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