The Indian Premier League (IPL) which was once a gamble by the Board of Control for Cricket in India (BCCI) has proven to be one solid bet – thanks to it continuing to rake in the moolah. Case in point: The BCCI earnings from the IPL including women rose 11% to Rs 4333.95 crore in FY22 (Season of 2021) from Rs 3874.66 crore in FY21 (Season of 2020), as per its annual report. It is believed that this season shall be no different for one of the most successful sporting tourneys, despite being an election year. According to industry estimates, to begin with, the sponsorship amount of both TV and digital is expected to increase anywhere in the range of 10-12%. Furthermore, central sponsorship which the BCCI largely drives is expected to increase by about 20%, while franchises are expected to clock a rise of 15% in sponsorship revenue. “Despite the e-commerce category and a few more staying from the IPL, it is expected that categories such as the Banking and Financial Services, Auto, FMCG, among others will continue to spend,” a senior media analyst, said on the condition of anonymity.
Data from the BCCI’s annual report further revealed that sponsorship revenue rose 13% to Rs 447 crore in FY22 from Rs 393.87 crore in FY21. As for the sale of tickets with season 2020 being played in the UAE due to the pandemic, the tourney did not accrue any revenue.
The ticket to match = election
To be sure, historically the BCCI held the IPL outside India, during the General Elections. The IPL was first held in South Africa in 2009, at the time of the election, as the provision of security was the main concern. Secondly, in 2014, the first leg of IPL was held across Dubai, Abu Dhabi and Sharjah as the seventh edition of the tournament clashed with India’s Assembly elections. 20 matches were played in the UAE before the league moved to India. However, industry experts opine that BCCI has learnt from the past and has been able to devise a smarter plan to keep the tourney in India, this year. “Unlike previous seasons the BCCI has started to work closely with the government. As a result, the tournament is being held in the country, despite the voting for the General Election to be held around the same time,” a senior media analyst, who did not want to be mentioned, explained.
According to industry estimates with 72 matches being held this year, this leads to the tourney with 30,000 seats. The average ticket price for IPL matches is about Rs 1,500. This is about a basic revenue of Rs 4.5 crore. Matches will be held largely across eight cities namely Mumbai, Delhi, Kolkata, Bengaluru, Hyderabad, Chennai, Mohali and Ahmadabad. By that calculation, the ticketing revenue per team is about Rs 36 crore. And now if this is multiplied by 10 teams then the total ticketing revenue opportunity is about Rs 360 crore. Typically a few teams such as KingsXI Punjab are provided with the rights to hold their matches in two cities including Mohali and Dharamshala. “The impact of general elections on Indian Premier League’s ticketing revenue would be negligible. If there is an impact, it would be on the afternoon games because the evening games would be a packed house. The introduction of new stadiums in Dharamshala, Visakhapatnam and Guwahati would lose out on a minuscule amount of revenue since the seating capacity is slightly higher in the stadiums in the metro cities. There are sports fans everywhere and I don’t expect the ticket pricing to vary a lot in these stadiums,” Indranil Blah, senior sports analyst, highlighted.
Delhi Capitals which is co-owned by the GMR Group and the JSW Group for instance earned a revenue of Rs 18.14 crore in FY23, from the sale of tickets as per regulatory filings accessed by business intelligence platform Tofler. As for the BCCI, the sporting body earns from ticket sales via the payback from the franchise to the central pool. Data from the BCCI’s earning report revealed that in total it earned Rs 33.86 crore in FY22 (Season of ‘21) from the sale of tickets. The sporting body earned Rs 14.73 crore from the sale of tickets for the playoff matches and another Rs 19.13 crore from the sale of tickets for league matches.
Fans and advertisers bet big
The IPL has always been thought of as an advertiser’s delight simply because of the reach of the tournament. In 2008, the total revenue recorded was to the tune of Rs 2,423 crore ($564 million), as per the latest GroupM ESP Properties report titled, Sporting Nation in the Making XI. It has been consistent growth since then for a decade and a half, with the 2023 numbers reaching Rs 15,766 crore ($1900 million). In 16 years, the industry scaled up to 6.5 times the value of the launch year of the IPL. To take a decade-long view, the compound annual growth rate (CAGR) from 2013 is a hugely impressive 13.7%, stated the report.
While the IPL system has grown in brand valuation by 433% as per the Brand Finance report), the learning curve gained by the industry through this ultra-competitive cricket league has had a snowballing effect on Indian sports. Moreover, Viacom18 with its OTT platform Jio Cinema, made major inroads into the IPL by picking up digital rights for the Indian subcontinent, and more, for 2023-2027 at a bid value of Rs 2,3758 crore ($2862 million). The Disney-backed Star Network kept the TV rights for the sub-continent, paying Rs 2,3575 crore ($2,840 million) for the same period. The two add up to a significantly higher overall value in comparison with the previous cycle from 2018 to 2022, when Star had gained global TV and digital rights for an amount of Rs 16,347.50 crore ($1,970 million). “This year too the title sponsorship from digital has been sold to the tune of Rs 150 crore. What has changed is the volume of sponsors or advertisers have increased, with each getting air time of two-three slots of 10 seconds each during any match,” a senior media planner, explained on the condition of anonymity.
As far as broadcast value is concerned the report stated that each match at this T20 cricket competition works to Rs 118.5 crore ($14.2 million). This puts it above the English Premier League (EPL) and America’s Major League Baseball (MLB), both standing at Rs 91 crore ($11 million) and the National Basketball Association (NBA) which has a per-match broadcast value of Rs 75 crore ($9 million). Meanwhile, The T20 competition contributed upwards.
of Rs 3,000 crore ($361 million) in 2023 to sponsorship spending. This includes central, team and franchise), with the two new outfits Gujarat Titans (GT) and Lucknow Super Giants (LSG) playing their part in scaling up the competition to the current ten-team format with an increased number of league games, the report stated. As per the terms, the eights team which completed 10 years in the eco-system currently pay 20% of their revenue to the BCCI. The sporting body pays about 44% of the central revenue to the 10 franchises. On average it means, each team ends up earning about 40% of revenue from the central pool post deductions. For instance, Sun Risers Hyderabad owned by the Sun Group earned revenue of Rs 262.4 crore for season 2022. “Even as one can expect an inflationary increase in sponsorship, there is a concern about start-ups and e-commerce companies not investing in the tourney heavily, unlike in previous years. Thereby to say that this year the IPL will see a good rate of growth is too soon,” a senior media analyst on the condition of anonymity said. What is to be noted here that Star India and Viacom18 are selling the inventory to advertisers separately. The merged entity is most likely to sell a bundle deal from next year, post clearance from the Competition Commission of India besides other regulatory aspects.
Merchandise is yet another sore area for the T20 tourney. Due to a large number of counterfeit jerseys and other items being sold at a cheap rate, the branded merchandise business is yet to completely take off. Nonetheless, the fanbase has continued to increase year-on-year. Industry experts opine that it is too soon to draw a verdict on this year’s IPL, as only a handful of matches have been played, the reality will be soon revealed post 15-20 days into a tournament, till then it is a wait-and-watch moment for everyone.