Is IPL pro Indian economy or against it?

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The Indian Premier League (IPL) is a league for Twenty20 cricket championship in India, organized by Board of Control For Cricket in India (BCCI). The Premier League is generally considered to be the world’s showcase for Twenty20 cricket, a shorter format of cricket consisting only 20 overs. Top Indian and international players take part in IPL, contributing to what is the world’s “richest cricket tournament”.

According to the data provided by BCCI, the Indian Premier League (IPL) contributed Rs 11.5 billion ($182 million) to India’s Gross Domestic Product (GDP) in 2015.

In this season, a total of 60 matches were played between 8 franchises over 44 days in 13 host venues in 12 cities across the country.According to estimates, the media rights for television and digital coverage of the IPL are expected to garner at least Rs 12,000-14,000 crore for the next five years (2018-2022). The title sponsor Vivo has already committed Rs 2,199 crore in that pool with three or four official partners, expected to shell out Rs 700-800 crore in that period as well. This would fatten BCCI’s revenue stream by at least Rs 15,000 crore (Rs 3,000 crore per year).

As per the agreement and terms, BCCI will start sharing 40% of this Rs 3,000 crore – or Rs 1,200 crore – among the eight IPL franchises that will be in competition.As per current estimates, each IPL franchise spends Rs 120-150 crore a year in running the team. It includes player costs, franchise fees, and other administrative and operating charges. From next year onwards, teams won’t be paying a fixed franchise fee but will have to fork out 20% of their revenue to BCCI.

IPL has its revenue streaming from various sources.here are some:

1.Ticket Sales(online and offline)
2.Sponsorships
3.Merchandising Rights
4.Internet and Television Rights
5.Ground advertisements and various other innovative advertising techniques.
6.Cellular service providers VAS

IPL’s contribution to the country’s economy goes way beyond the ticket sales. The key benefits and opportunities that arise are employment generation across sectors, tourism development, support of tier two cities providing key media exposure and development of cricket and sports participation across the country.

For all we know, the teams have to annually dish out 10% of the final bid amount that they had placed in the inaugural season to the BCCI. They also spend money to buy players and spend on the salaries of the team support staff including the coaches. Apart from this, there are expenditures like booking the flight tickets and hotels for the players and support staff, running the administrative offices for meeting logistics of the team and marketing before and during the tournament. They also have to pay a certain amount to the cricket associations in order to host their home games.

The biggest source of income remains sponsorship. BCCI distributes a certain percentage of the income that the tournament generates from its sponsors (around 60%) equally among the franchises. The second major source of income is broadcasting rights. Again, the board distributes this amount among the franchises.

IPL’s significant contribution to India’s GDP but also the positive effect on employment generation across various sectors, tourism development, upliftment of the tier 2 cities through media exposure and development of cricket and other sport participation across India.

 

  • Founder and Editor at "Knowledge Portal.co.in"