It has made cricket more popular than ever before and made players much richer — even those who could not qualify for the national cricket team — but the Indian Premier League (IPL), hit by scams in recent times, is yet to prove a good business move for its franchisees.
Even as the Board of Control for Cricket in India (BCCI) and players have made good money, all but two team owners in the T20 cricket tournament continue to report losses.
Knight Riders Sports has been the most successful franchisee, with net profits of Rs 10.42 crore, Rs 6.34 crore and Rs 9.18 crore in 2011-12, 2012-13 and 2013-14, respectively. This was after it reported a net loss of Rs11.28 crorere in 2010-11, according to details filed with the Registrar of Companies (RoC). The company’s revenue fell a little to Rs 129.48 crore in 2013-14 from Rs 138.65 crore the previous year.
GMR Sports has made its maiden profit, of Rs 7 crore, in 2013-14 — a sudden recovery from a loss of Rs 4.90 crore the previous year. Its revenue increased from Rs 151.11 crore in 2012-13 to Rs159.11 crore. By revenue generated from the tournament, GMR Sports has been the most successful franchisee.
Rajasthan Royals owner Jaipur IPL Cricket, and Royal Challengers Sports that owns Royal Challengers Bangalore, did not file financial details for 2013-14 with RoC.
India Cements, which owns Chennai Super Kings, and SUN TV Network, which owns Sunrisers Hyderabad, run other businesses as well.
Rajasthan Royal, the winner of the inaugural edition of IPL and Chennai Super Kings, which won the title twice, are likely to be defranchised for next year’s eighth season of IPL. This could eventually lead to a revenue loss of more than ~1,000 crore to the tournament.
More than 50 per cent of an IPL team’s revenue comes from BCCI, primarily through central sponsorship and fees for digital & broadcast rights that the board shares with team owners. Besides, there are other sponsorships that teams get and earnings from ticket sales. On a game day, a team owner gets about 40 per cent of the stadium revenue as well.~