Industry POV

Despite Controversies, IPL 2016 Was a Money-Spinner

13 June, 2016

The Indian Premier League (IPL) has amassed about Rs 2,500 crore in overall revenue in its recently concluded ninth season, growing at a double-digit pace over the year before, show ET's estimates based on industry discussions.

The figure includes revenue that TV and digital channels made from advertisements, as well as teams from sponsorship, ticket sales and merchandising, and BCCI from on-ground sponsorship. The biggest chunk of revenue, obviously, came from TVs, as advertisers vied to grab ad spots when matches were telecast during the nearly two-month long tournament which, with its fast paced short-format, has become very popular in this cricket-crazy nation.

Official broadcaster Sony Pictures Networks India (SPN) made just under Rs 1,100 crore, while the eight IPL franchisees together earned Rs 200-230 crore from sponsors, ET had reported. The Board of Control for Cricket in India generated Rs 220-250 crore from on-ground sponsorships, whereas Hotstar, the digital rights holder, got around Rs 40 crore, according to media buyers.

"India is a market where a lot of new brands are launching. These need to chase salience and eyeballs and IPL's viewership has remained rock solid," said Mallikarjun Das, chief executive at media buying agency Starcom Media-Vest Group. "So, I believe advertising will continue to remain the mainstay." But it is not just the advertising revenue that IPL generates. This season, it made ticketing revenue of Rs 150-160 crore.

"IPL is celebrated like a festival that unites India once a year and brings families, friends and colleagues together to enjoy the spirit of cricketainment," said Vinit Karnik, business head at ESP Properties, a GroupM company. "IPL has developed many unique skill sets and generated lot of job opportunities that are making a difference to the larger sports and events industry in India," he said.

According to people with knowledge of the matter, in terms of ticketing revenue, Royal Challengers Bangalore (Rs 25-26 crore), Mumbai Indians (Rs 24-26 crore) and Delhi Daredevils (Rs 22-24 crore) topped the charts, followed by debutant Rising Pune Supergiants (Rs 18-20 crore), Kolkata Knight Riders (Rs 16-18 crore), Sunrisers Hyderabad (RS 15-16 crore), Gujarat Lions (Rs 14-15 crore), and Kings XI Punjab (Rs 13-14 crore). The BCCI ended up with almost Rs 10 crore in its kitty from ticketing revenue.

"IPL is progressively growing at a 10-12% rate year-on-year. It may not be galloping, but it is definitely not sinking either. It is going in the right direction. This year also, the revenue growth is in line with our estimates," said Ashish Bhasin, CEO-South Asia, at Dentsu Aegis Network. Another small revenue stream for the franchisees was merchandising, which is estimated to have generated Rs 17-20 crore for the teams put together. While it is hard to put a definite number to it, there is substantial revenue to the broadcaster from the TV channels that are subscription-based.

SPN may allocate this revenue, estimated to be anywhere from Rs 250 crore to Rs 400 crore, to the three channels — Sony Max, Sony Six and Sony ESPN — which air IPL. ET could not independently verify this number. SPN's payout to the BCCI of Rs 820 crore per year (the 10-year deal is worth Rs 8,200 crore) as well as franchisees' fee has not been considered for the estimates. A major chunk of this goes into a central revenue pool, from where it is distributed among the franchises.

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