The good, the bad and the ugly of the IPL phenomenon

Mint

16-06-2025

The Indian Premier League (IPL) for Cricket is the second largest sports league in the world after the American National Football League (NFL).
You read that right, second largest in the world! And the IPL is a toddler, only 18 years old, compared to over 125 years of the American Major League Baseball's existence, 100 years of the NFL's and 75 years of Formula One's. The NFL dominates all revenue metrics like total revenue (nearly $20 billion), revenue per team ($600 million) and revenue per match ($67 million).
The last of these metrics is considered the most relevant for comparison across geographies and formats, and the IPL comes in second with nearly $17 million per match. Justifying its position as a young league, the IPL has been growing revenue at a compounded annual rate of above 20% compared with about 8-10% for other major sports leagues like the NFL.
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The Board of Control for Cricket in India, widely known by its four-letter abbreviation BCCI, sits atop the IPL pyramid. It is a tax-exempt organization that oversees this entertainment juggernaut. Like for most major sports leagues around the world, the revenue model is made up of TV and digital rights revenue, central sponsorships, franchise level sponsorship, stadium receipts and merchandise revenue.
The BCCI struck a five-year $6 billion deal with Disney/Viacom 18 for TV and digital rights revenue from 2023 through 2027. In addition to this annual $1.2 billion, the Board earns another $100-200 million from central sponsorships. The BCCI shares half of this with the ten franchise teams.
So, each franchise team makes about $60 million directly from the Board and another $10 million or so at the franchise level. The BCCI imposes a total salary cap of ₹146 crore ($17 million) for cricketers and if you add about $3 million in miscellaneous expenses, each franchise stands to make a whopping operating profit of about $50 million per season.
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There are many ingredients that make up the magic sauce for the IPL. The demographics of the country naturally lend themselves to a newly introduced short form of the game. A remarkable 40-50% of IPL fans are women (thus dramatically expanding the ad market).
Some stars like Virat Kohli have a 'gram' followership (280 million) that is in the league of Kendall Jenner and Taylor Swift. The only sportspersons with a greater following are footballers Cristiano Ronaldo and Lionel Messi. Even though we in India are shocked by the vast sums of money that IPL players are auctioned for; in comparison with other major leagues around the world, IPL's 'talent cost' as a percentage of total revenue is among the lowest.
Inevitably, the number of teams and the playing season will expand, perhaps as soon as the next media auction in 2027. By my estimate, over the next ten years or so, media rights for the IPL should roughly be 10 to 12 times the current value of $1.2 billion a year. The BCCI will make a profit each year of over $5 billion. The Board pays no taxes on this profit.
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A main reason why the IPL has remained exciting in sporting terms is that literally any team can win in a given year. This is enabled by a 'mega auction' every three years, during which all but four players per team have to be released. Each team is required to have a minimum of 18 players and a maximum of 25. Each team can only have a maximum of eight international players. So, the mega auction releases somewhere between 150 and 200 players into the fray. In the intervening years, auctions are held for new players, for international players who elect not to return, and for a few who are released.
This unique process ensures that a small group of players fly the franchise flag (such as Kohli for Royal Challengers Bengaluru or Rohit Sharma for Mumbai Indians), but others get thrown in the great pot with any team being able to bid for their services. This ensures that each game remains competitive, which makes any outcome possible. Multi-year dominance by any single team is unlikely; eight different teams have won in 18 years.
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That's the good part of the story. A fast-growing, world-scale sporting league with structural elements that will keep it exciting and growing fast.
In the early years, the IPL was rocked by 'fixing' scandals rendered worse by the fact that insiders seemed to have the biggest hand in those scandals. Fortunately, large-scale fixing seems to have been eliminated. Informal and international (where sports betting is legal) betting continues, but it appears that insiders are much less involved today. The 'bad' part of the story today comes from the unbridled consumerism that has taken hold, indulging everything from binge drinking to unhealthy eating.
The 'ugly' part was visible in Bengaluru with the tragic death of 11 fans and injuries sustained by scores of others during a 'victory party' at the RCB stadium. Officials were hopelessly overwhelmed by the size of the crowds and their apathetic complacency resulted in a needless tragedy.
The IPL juggernaut is likely to crush on at its current growth rate for at least a few more years. The BCCI must reallocate some of its astonishing profits and work with cities to move stadiums to zones that are well connected by mass transit and are built to be disaster proof. Planning and systematism will be required everywhere to realize the full potential of the IPL phenomenon.
P.S: 'The great wheel of fate rolls on like a juggernaut, and crushes all in turn, some soon, some late," said the writer H. Rider Haggard
The author is chairman, InKlude Labs. Read Narayan's Mint columns at www.livemint.com/avisiblehand