IPL started off in 2008 with the first match played between RCB and KKR on 18th April. From that day its popularity and viewership has only continued to inflate. In fact, IPL became the first sporting event to be broadcasted live on You Tube in 2010. So clearly, the success is not just because of Virat Kohli’s irresistible charm on the field.
Brand Finance, a brand valuation consultancy, revealed that IPL’s brand value has grown by 433% since its inception. It stands at a whopping $10.7 billion, which is roughly ₹89,232 crores (2023). This valuation prices each IPL match at about $13.4 million.Mumbai Indians has emerged as the most valuable IPL Franchise followed by Chennai Super Kings and Kolkata Knight Riders
Does this mean big bucks for the teams? Let’s dive into the structure of IPL and uncover the monetary situation.
IPL was founded by the BCCI and the board, like a good boss, shares the pie with all of the franchises. The pool of revenue is distributed as follows: 50% is retained by BCCI, 45% is distributed among the teams and 5% is reserved for the final four in the form of prize money. By virtue of the soaring success of IPL it is speculated that the latest income per team could be around 600 crores.
Money inflow in IPL
- Sponsors are a great source of revenue along with merchandising. They fill the jerseys of our favourite players with colourful logos and bring money on the table.
- The Tata Group has claimed their spot as the title sponsor for the IPL for a tenure of 5 years.
- Broadcasting rights form the major part of the income. Viacom and Star Sports acquired the same for $6.4 billion for the period 2023-2027. The teams also sell their stake to major corporations.
- The GMR Group purchased Delhi Capitals (DC), originally called Delhi Daredevils, in 2008 for 84 million dollars. Furthermore, listed companies like United Breweries and Reliance Industries Ltd. own RCB and MI respectively.
IPO ahead for the franchise?
Apart from all these revenue sources of IPL, there is one more realm left unexplored i.e. inviting public offers. What if IPL teams were to issue an IPO inviting their dedicated fans to contribute to their finances? Something of this kind is not heard of in the Indian sports environment.
But it wouldn’t be something new altogether. Manchester United went public through an IPO on August 10, 2012. The current value of their share stands at $14.71 (as of 13th April, 2024).
Looking at the current scenario, a potentially successful issue, if it were to happen, is not out of the question. The die-hard enthusiasts would get a chance to be financing their favorites and mixing pleasure with business.
Currently, you can buy shares of unlisted companies like Chennai Super Kings through several portals. Since it is unregulated, obviously one cannot predict the current pricing.
While going public offers a plethora of possibilities by granting access to expansion and greater visibility, the question of why still looms there. Issuing an IPO would mean a change in the ownership structure of the teams. This will influence their conduct, their decision making and impose a paramount responsibility on them. The teams will have to be transparent in all their operations.
Also, let’s take examples of Liberty Braves (BATRA) and Madison Square Garden Sports (MSGS). It is observed that investing in sports teams is more profitable when the intention is to hold them long term. But GenZ tend to be more active traders than any other generation seen so far. This may lead to an unprofitable run of investing in the teams.
Therefore, while the market may be big enough, there are no hard numbers yet urging the IPL teams to become publicly traded.