Financial Leverages of the each Franchise Team
REVENUE SOURCES: MAIN EXPENSES:
1. Broadcasting Rights (Franchise : IPL, 80:20) 1. Franchise fee to IPL
2. Sponsorship (Franchise : IPL, 60:40) 2. Player acquisition costs
3. Team Sponsorship 3. Stadium hire charges (Rs 50 lac per match)
4. Gate Receipts 4. Marketing / Promotion Costs
5. In-stadia Advertising 5. Administration, Traveling & Stay
1. Broadcasting Rights: On 15 January 2008 it was announced that a consortium consisting of India's Sony Entertainment Television network and Singapore-based World Sport Group secured the global broadcasting rights of the Indian Premier League. Sony Entertainment Television renewed contract with BCCI with Sony Entertainment Television paying Rs. 8700 crores (87 billion) for 10 years. In first three years 20% of these proceeds would go to IPL/BCCI, 8% as prize money and 72% would be distributed to the franchisees. In later years, BCCI gets 30%, franchisees 70% and in subsequent years, BCCI gets 40%, franchisees 60%. Sony-WSG then re-sold parts of the broadcasting rights worldwide to other companies such as Sky Network TV of New Zealand, StarHub of Singapore, Super Sport of Central Africa, PCCW of Hong Kong, Arab Digital Distribution in Middle East nations, GEO Super of Pakistan, DirecTV of US, ATN of Canada, ITV of UK etc.
2. Sponsorships: India's biggest property developer DLF Group paid US$50 million to be the title sponsor of the tournament for 5 years from 2008 to 2013. Other five-year sponsorship agreements include a deal with motorcycle maker Hero Honda worth $22.5-million, one with PepsiCo worth $12.5-million, and a deal with beer and airline conglomerate Kingfisher at $26.5-million. The IPL signed up Kingfisher Airlines as the official umpire partner for the series in a Rs. 106 crore (approximately £15 million) deal. This deal sees the Kingfisher Airlines brand on all umpires' uniforms and also on the giant screens during third umpire decisions. Franchise team sponsorhip – for instance, Nokia is the team sponsor for Kolkata Knight Riders while Aircel sponsors Chennai Super Kings. This revenue will remain wholly with the franchisees. Some teams such as Mumbai Indians have multiple sponsors in MasterCard, Bajaj Allianz and Royal Challenge, all of which are endorsed on team jerseys.
3. Official IPL Mobile applications: DCI Mobile Studios (A division of Dot Com Infoway Limited), in conjunction 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). Recently, they have released the IPL T20 Mobile applications for iPhone, Nokia Smartphones and Blackberry devices.
4. Official Website: 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.
5. The Player Auction: The total spending cap for a franchisee in the first player auction was US $5m. Players under the age of 22 are to be remunerated with a minimum annual salary of US $20,000 while for others it is US $50,000.The batting all-rounder from Trinidad, Kieron Pollard has become the costliest player in the IPL history, as he was reportedly bought by Mumbai Indians for $2.75 million. However, Pollard will get only $750,000 (Rs. 3.41 crore) as per the IPL rules. The remaining money will go to the IPL. Nita Ambani successfully bought him after a tie-breaker secret bidding. The franchisee has to pay players who are available even if they are on the bench.
6. Franchise Fees: For instance, the Mumbai Indians franchise, which is the most valuable one in the IPL at $111.9 million, will have to pay $11.19 million every year to IPL.
Happy reading!!!!!
Raghu / Sandy
REVENUE SOURCES: MAIN EXPENSES:
1. Broadcasting Rights (Franchise : IPL, 80:20) 1. Franchise fee to IPL
2. Sponsorship (Franchise : IPL, 60:40) 2. Player acquisition costs
3. Team Sponsorship 3. Stadium hire charges (Rs 50 lac per match)
4. Gate Receipts 4. Marketing / Promotion Costs
5. In-stadia Advertising 5. Administration, Traveling & Stay
1. Broadcasting Rights: On 15 January 2008 it was announced that a consortium consisting of India's Sony Entertainment Television network and Singapore-based World Sport Group secured the global broadcasting rights of the Indian Premier League. Sony Entertainment Television renewed contract with BCCI with Sony Entertainment Television paying Rs. 8700 crores (87 billion) for 10 years. In first three years 20% of these proceeds would go to IPL/BCCI, 8% as prize money and 72% would be distributed to the franchisees. In later years, BCCI gets 30%, franchisees 70% and in subsequent years, BCCI gets 40%, franchisees 60%. Sony-WSG then re-sold parts of the broadcasting rights worldwide to other companies such as Sky Network TV of New Zealand, StarHub of Singapore, Super Sport of Central Africa, PCCW of Hong Kong, Arab Digital Distribution in Middle East nations, GEO Super of Pakistan, DirecTV of US, ATN of Canada, ITV of UK etc.
2. Sponsorships: India's biggest property developer DLF Group paid US$50 million to be the title sponsor of the tournament for 5 years from 2008 to 2013. Other five-year sponsorship agreements include a deal with motorcycle maker Hero Honda worth $22.5-million, one with PepsiCo worth $12.5-million, and a deal with beer and airline conglomerate Kingfisher at $26.5-million. The IPL signed up Kingfisher Airlines as the official umpire partner for the series in a Rs. 106 crore (approximately £15 million) deal. This deal sees the Kingfisher Airlines brand on all umpires' uniforms and also on the giant screens during third umpire decisions. Franchise team sponsorhip – for instance, Nokia is the team sponsor for Kolkata Knight Riders while Aircel sponsors Chennai Super Kings. This revenue will remain wholly with the franchisees. Some teams such as Mumbai Indians have multiple sponsors in MasterCard, Bajaj Allianz and Royal Challenge, all of which are endorsed on team jerseys.
3. Official IPL Mobile applications: DCI Mobile Studios (A division of Dot Com Infoway Limited), in conjunction 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). Recently, they have released the IPL T20 Mobile applications for iPhone, Nokia Smartphones and Blackberry devices.
4. Official Website: 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.
5. The Player Auction: The total spending cap for a franchisee in the first player auction was US $5m. Players under the age of 22 are to be remunerated with a minimum annual salary of US $20,000 while for others it is US $50,000.The batting all-rounder from Trinidad, Kieron Pollard has become the costliest player in the IPL history, as he was reportedly bought by Mumbai Indians for $2.75 million. However, Pollard will get only $750,000 (Rs. 3.41 crore) as per the IPL rules. The remaining money will go to the IPL. Nita Ambani successfully bought him after a tie-breaker secret bidding. The franchisee has to pay players who are available even if they are on the bench.
6. Franchise Fees: For instance, the Mumbai Indians franchise, which is the most valuable one in the IPL at $111.9 million, will have to pay $11.19 million every year to IPL.
Happy reading!!!!!
Raghu / Sandy
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