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Interesting
This is so interesting and I finally got some answers to the questions I had about IPL business
So I wanted to know what happens to the fabulous sums of money involved in IPL. I read up a little and here's what I found:
Say, you've bought a new team for 5,000 crore. What's next?
First, the 5,000 crore doesnt have to be paid upfront, but over 10 years. Interest free. 500 crore per annum for 10 years. then your team is yours forever.
That's the outgo.
But there's the inflow too. Right from Day 1!
Here's how the money flows (the formula remains the same but the numbers will change from next year when the two new teams are added):
The moment you buy a team, you start getting a share of the central revenue (broadcast rights, sponsorships, etc). This is split 50-50 between the BCCI and the teams. This amount (for 2021) was INR 19,500 crore. That's split into two: 9750 cr for BCCI, and 9750 for the 8 team. This works out to INR 244 crore for each team (9570/8).
The second revenue stream for teams is local (ticket sales, jersey, hospitality, etc), which is different for each team depending on its business model. While the bigger teams such as MI earn much more than the smaller one, the average is arund INR 50 crore.
Add to this prize money and the top 4 teams can earn around 300 crore per annum (including thr INR 244 crore from central pool).
Expenses? 90 crore for players, around 40 crore for operations, 20% revenue share with BCCI (around 15 crores). It all adds up to around INR 145 crores per team.
Net earning is INR 300 crore - 145 crore = INR 155 crore.
Considering the mose expensive team MI was bought by Ambani at $111.9m (around 440 crore) in 2008 and the earning is a min INR 155 crore annually, IPL has been a hugely profitable business. Both for BCCI and the teams!