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How ipl teams make money? Ipl business model and revenue sources। Indian Premier League।

We,indian are very crazy about cricket. Watching this Lalit Modi(ipl scam) brought the concept of ipl in india. If you observe the business model of ipl then you see that the business model of ipl is same like EPL. The concept of Ipl was taken in india inspired by the concept of european football league. It did not take more time to be popular in india. From the first season ipl was very popular in india. Now understand from where ipl teams make money?

How ipl teams make money? Ipl business model and revenue sources। Indian Premier League।

Media Rights is the main revenue source of ipl team. The channel which wants to broadcast ipl matches have to take the media rights permissions. And to take the media rights permission they have to pay fees to BCCI. BCCI keeps some fees of media rights and distributes the rest of the money into ipl team. Media rights is the largest revenue source of ipl teams. 60% to 70% revenue sources of ipl teams come from media rights. Sony entertainment had the media rights of ipl for 10 years (from 2008 to 2017). Sony bought the media rights of 10 year in 8200 crore rupees. It means that sony paid 820 crore rupees for each year. Now star india bought the media rights of ipl for 5 years from 2018 to 2022. Star india bought the media rights of ipl for 5 years in 16347 crore rupees. It means that star india pays 3269 crore rupees for each year. You can see that ipl teams got 820 years for each year till 2017. But the amount is now 3269 crore rupees from 2018. It means the payment of media rights increased 4 X. Each ipl team becomes profitable for the increase of media right's payment.


The second major revenue source of ipl teams is brand sponsership. Ipl teams make a good amount of money from brand sponsership. Such as RCB is sponsered by hp,Erosnow etc brands. Similiarly CSK gets the brand sponsership of gulf,muthoot finance etc brands.


Ipl teams make money also from title sponsership. For example ipl is called before DLF IPL. Now ipl is titled by VIVO IPL. Vivo is the title sponser of ipl for 5 years from 2018 to 2022. For this vivo paid 2199 crore rupees to bcci. Bcci takes some fees from title sponsership payment and rest of the fees bcci distributes into ipl teams. 


The next revenue source of ipl teams is ticket sales. The revenue of ticket selling is also got by ipl teams. A part of the ticket selling revenue is given to the association of ground where the match was playing. Such as wankhede stadium is the MI's home ground. And mumbai cricket association manages the stadium. So when ipl team will play there they were given a part of ticket sales revenue. 


merchandise sales is the next income source of ipl teams. Ipl teams makes money by selling their merchandise jerseys,caps etc. 


Ipl teams also make money by player trading. Sometimes player of one team is sold to another team. So if any player was bought in low price and he is sold to another team in high price then in this way ipl team can make money. 


And the next revenue source of ipl teams is prize money. Both of ipl winner and runner-up get prize money. In 2018 the winner team of ipl got 20 crore rupees and the runner-up team got 12.5 crore rupees. Ipl teams distribute a part of prize money to its players. But it is wonder that prize money is not the main revenue source of ipl teams.  


If any ipl team continuously performs or plays good then the brand value of the team increases. For this they can get good sponsership and as a result the revenue from sponsership also increases for the ipl team. So these are the revenue sources of iol teams. Without these they earn money from small things. Now come with expenses of ipl teams.


There are also expenses of ipl teams beside the revenue. Each ipl team pays 20% of its revenue to bcci. It is the major expense of every ipl teams. And then team pays the player's fees,support staff salary,flight booking cost,hotel cost etc. Administration and operation cost also include in expenses. Ipl teams advertise itself so that their brand value will increase and they can connect with their fans. For this many ipl teams bring their ipl song. Such as 'Hallah Bol' is the ipl song of RR. The ipl song of MI is 'Duniya hila denge hum'. All these are the main expenses of ipl teams. Usually the expenses of ipl teams are between 130 crore to 160 crore rupees that may be increased in future.


 The first 10 years of ipl was very difficult for ipl teams. Then to earn profit was difficult for them. And if some teams earned profit then it was little. But now the 4 times increase of media rights and a good increase of title sponsership help the ipl teams to earn profit. And if the trend will continue then ipl teams will make money of good amount. The brand value of KKR was high from first for joining Sharukh khan in team. So the profit of KKR was good from first. For last some years KKR makes profit most. In FY2017-18 the revenue of KKR was 154 crore rupees and the profit of KKR was 20 crore rupees. If you compare the profit of the english premier league with indian premier league then you can see that there is a great difference. In 2017-18 the profit of english premier league,CHELSEA was 564 crore rupees and there the profit of IPL was 20-40 crore rupees. The difference is very big. So there is a long way to go for ipl. 


For ipl players become profitable, brands get a good platform to promote. And if there is something which benefits most then this is BCCI. The revenue of bcci increases many times for ipl. And now bcci reach es a good position in the world. It is not right that the experience of every team is good. The owner of Deccan Chargers couldn't earn a good profit so he sold his franchisees. Mukesh Ambani who own MI promotes his own products through the team. You obviously see the name,JIO in the t-shirt of MI players. In 2018 he brought the song,'jio dhan dhana dhan'. Thus he promotes his brand too. 


          If you have any query related to (how) ipl teams make money please comment below so that the topic can be covered.


Best wishes for your team.


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