Economics of Indian Cricket, now days

     BCCI – India’s richest sporting body and world’s richest cricket board, which lures many politicians for top positions in it. As India is large market in terms of International Cricket revenue, BCCI’s opinion carry weight in ICC’s decision making process. India can decide future of International players as well as can upgrade cricket rules. ECB, Cricket Australia and BCCI are ‘Big Three’ economic players in world cricket. BCCI is independent body which does not depend on Government for its finances. BCCI has tax liability of $4.13 bn who paid only $419mn till now.

     During 2007, Indian Cricket League (ICL) a private cricket league funded by Zee Entertainment initiated in India which feared BCCI. BCCI and ICC refused to recognise ICL and BCCI decided to launch Indian Premier League in 2008 on franchise model. BCCI increased prize money of IPL and banned ICL players. BCCI put Lalit Modi in change of starting T20 of its own.

IPL conducted bidding for selling franchise of each team. Obviously, BCCI made whooping assets from IPL bidding. It is interesting to know how IPL team owners/investors earn. Revenue of the team is generated from media rights for broadcasting, sponsorships, tickets, stall rentals and prize money.

     Media rights for broadcasting IPL matched is decided by BCCI through auction process. Sony network is having worldwide broadcasting rights. Some part of revenue obtained from it goes to each team investor. Revenue earned from media rights creates maximum share of total earning around 60-70% for each team.

     Out of total revenue of the team, 10% revenue comes from match tickets. Maximum the spectators, more is the earning and good view for broadcasters. Hence team owners decides ticket rates based on standard of living of the city. Some tickets are already reserved for BCCI which BCCI can provide to VVIPs and their relatives. KKR in first season of IPL did not do well, but they were in profit due to celebrities’ presence.

     Stalls installed inside stadium for beverages, eatables also acts as an addin to team revenue. And finally the prize money 50 cr for winners. As per the rule, 50% of prize money should go to each team members.

     There are other illegal sides of earnings in IPL. Let’s not go into the details of it. We shall wait for Tuesday 14th July, probe of CSK and RR fate result to be announced by Supreme Court.