BCCI – Dutch Uncles

Why is the BCCI the Richest Cricket Board in the World?

Roopali Kotwal — Fri, 19 Mar 2021 10:07:50 +0000

Rise of Board for Control of Cricket in India (BCCI)

BCCI continues to be the world’s richest board. But it wasn’t always the story. The board struggled to get the live matches telecast in India until the early 1990s.

In 1992, due to the monopoly of the government-run Doordarshan (DD), the BCCI had to pay around Rs Five Lakh to the DD channel to telecast the live match in India. But then in 1993, one strategic move changed history forever. Jagmohan Dalmiya identified the trend and decided to make Indian cricket self-sufficient. Jagmohan Dalmiya along with Inderjit Singh Bindra won the legal battle against broadcaster Doordarshan. And the outcome was that DD had to pay BCCI for acquiring the rights to televise Indian matches.

In 1993, BCCI sold the television rights to Trans World International (TWI) ahead of the India-England series match and made a profit of around $600,000. In fact, after this, Doordarshan had to pay a certain amount to TWI to telecast the matches in India. This was the first of its kind in history. Dalmiya’s decision to telecast the matches by private channels led to a huge amount of income for the board and the players.

By the late 1990s, cricket became a popular sport in India with a huge fan base. This gave an opportunity to BCCI to find more revenue streams. In 1996, Jagmohan Dalmiya along with the BCCI president at that point in time secured the hosting rights of the 1996 World Cup Match. The timing was right and the crucial and significant step changed the Indian cricket forever. His strategic decision changed the history of BCCI and how cricket was telecasted in India.

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IPL changed the fate of BCCI and became one of the main sources of income for BCCI

Indian Premier League (IPL): Changed the fate of BCCI

In 2007, the inception of the Indian Premier League (IPL) turned out to be the fate-changer. It changed the fate of the cricketing fraternity and the board. The combination of Cricket and Bollywood Celebrities was an instant hit. It gathered a huge fan following and IPL became one of the main sources of income for BCCI.

IPL changed the power equations in world cricket too.

As per BCCI Annual report 2016-2017, the valuation appraisal firm Duff & Phelps estimated the IPL brand to be worth $5.3 billion (Rs. 37,100 Crore) in 2017. And as per Duff & Phelps IPL Brand Valuation Report 2019, the overall value of the Indian Premier League (IPL) ecosystem in 2019 has increased to around US $ 6.8 billion (Rs. 47,500 crores) from US $ 6.3 billion (Rs. 41,800 crores) in 2018.

What does this mean for India?

Indian audience and Indian cricket players, their passion has made Cricket the favourite and one of the most-watched sports in this day and age. India generates more than 70 per cent of the global revenue by being one of the largest populations to watch the sport. The rights to private channels to telecast the matches and IPL inception was a game-changer that led to the great transition of BCCI. In the mid-2000s the growth of Indian cricket was exponential.

As per the balance sheet in the year 2018-2019, the BCCI’s valuation has reached Rs 14,489.80 which made it richer than International Cricket Council (ICC). Therefore, BCCI has become richer and now the world’s richest board.

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Who are the new buys in IPL 2021 Auction?

Smruthi Krishnan — Thu, 18 Mar 2021 04:35:04 +0000

The Indian Premier League (IPL) is a professional Twenty20 cricket league in India usually contested by eight teams representing eight different cities or states in India. The league was founded by the Board of Control for Cricket in India (BCCI) in 2007 and is the most-attended cricket league in the world.With a large fan following and audience, the teams try to bring in the best players across the world to play in the league. These players are up for auction and the highest bidding team gets the player. Every year, new players are drawn in from different countries based on their performance and credentials. The most expensive players of this season are Chris Morris (Rs 16.25 crore), Kyle Jamieson (Rs 15 crore), Glenn Maxwell (Rs 14.25 crore), Jhye Richardson (Rs 14 crore), Krishnappa Gowtham (Rs 9.25 crore) The new buys this year include Steve Smith, Sam Billings, Umesh Yadav, Ripal Patel, Curran and Lukman Meriwala.

Player Acquisition Rules

Teams can acquire players through the annual player auction, trading players with other teams or signing replacements for unavailable players. Usually, each player signs up for the auction stating their base price and then plays for the team that bids the highest. In the trading windows, a player can only be traded with his consent, but players cannot be traded outside the trading windows or during the tournament. The team strength must be between 18 to 25 players with a cap limit of 8 players. Salary cap of the entire squad must not exceed ₹850 million. And under-19 players cannot be picked unless they have previously played List A cricket.

Each player has a one year contract and is paid the annual amount by the franchise. The franchise can extend the contract by one or two years. Prior to the 2014 season, Indian domestic players were not included in the player auction pool however due to legal and moral codes of the league, it was decided to include domestic players in the player auction.

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Usually, each player signs up for the auction stating their base price and then plays for the team that bids the highest.

New players in the league with their bidding prices

Chennai Super Kings (CSK)

Cheteshwar Pujara (50L), CH Nishaanth (20L), Bhagat Varma (20L), K Gowtham (925L), Moeen Ali (700L), and Harishankar Reddy (20L)

Delhi Capitals (DC)

Steve Smith (220L), Sam Billings (WK) (200L), Vishnu Vinod (WK) (20L), Ripal Patel (20L), Tom Curran (525L), Lukman Meriwala (20L), M Siddharth (20L), and Umesh Yadav (100L).

Kolkata Knight Riders (KKR)

Karun Nair (50L), Sheldon Jackson (20L), Ben Cutting (75L), Pawan Negi (20L), Shakib Al Hasan (320L), Venkatesh Iyer (20L), Harbhajan Singh (200L), and Vaibhav Arora (20L).

Mumbai Indians (MI)

Arjun Tendulkar (20L), James Neesham (50L), Marco Jensen (20L), Yudhvir Charak (20L), Adam Milne (320L), Nathan Coulter-Nile (500L), and Piyush Chawla (240L).

Punjab Kings (PBKS)

Dawid Malan (150L), Fabien Allen (75L), Jalaj Saxena (30L), Moises Henriques (420L), Saurabh Kumar (20L), Shahrukh Khan (525L), Utkarsh Singh (20L), Jhye Richardson (1400L), and Riley Meredith (800L).

Rajasthan Royals (RR)

Liam Livingstone (75L), Chris Morris (1625L), Shivam Dube (440L), Akash Singh (20L), Chetan Sakariya (120L), KC Cariappa (20L), Kuldip Yadav (20L), and Mustafizur Rahman (100L).

Royal Challengers Bangalore (RCB)

KS Bharath (20L), Mohd. Azharudeen (20L), Rajat Patidar (20L), Sachin Baby (20L), Daniel Christian (480L), Glenn Maxwell (1425L), Kyle Jamieson (1500L), and S Prabhudesai (20L).

Sunrisers Hyderabad (SRH)

Kedar Jadhav (200L), Jagadeesha Suchith (30L), and Mujeeb Ur Rahman (150L)

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What is the Profit for IPL Franchise?

Naina Sood — Wed, 17 Mar 2021 12:35:04 +0000

India is all geared up for the most awaited cricket tournaments — India Premier league (IPL) 2021— which will begin on April 9 in Chennai. Besides Covid restrictions, several factors affected the business of IPL in 2020. First, the IPL was moved out of India to UAE which added to the franchises’ expenses, second, BCCI and Vivo had suspended their partnership which affected the ‘central revenue pool’ of the BCCI and franchises. However, despite unusual arrangements, the 53-day long tournament scored more revenue and viewership, and 2021 is expected to ‘score’ even better. Let’s have a look at some rough figures and calculations, as to how much each franchise takes back home on an average each year.

Main Revenue Sources of IPL Teams

The ‘central IPL revenue pool’

This is a fixed source of income for both BCCI and franchises, which is shared in a 60:40 ratio. This consists of two revenue sources – Broadcasting rights and sponsorships.

Gate Revenue/ Tickets Sales

Franchise is allowed to a minimum of 8 matches and they have the complete right on the income from the gate passes and tickets.

Merchandising

This includes the sale of jersey replicas, sports souvenirs and sports equipment among others.

Prize Money

The winner of the IPL title receives a big chunk of the prize money, while the rest of the amount is equally divided among other teams.

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IPL teams are expecting a 40% jump in revenue with digital sponsorship deals. Many brands (Myntra for Chennai Super Kings) are looking at creating digital content by partnering with franchises.

Money Report Card 2020 IPL

Average Profit For Each IPL Team

Total number of franchise – Eight

Broadcasting partner: Star Channel – Rs 3,269 Cr
Title sponsor: Dream 11 – Rs 222 Cr
Official Partners: Tata Motors, Unacademy, CRED – Rs 120 Cr
Strategic Time Out Partner: CEAT – Rs 30 Cr
Umpire Sponsor: Paytm – Rs 28 Cr
Other sponsorships – Rs 300 crore

Total BCCI Central Revenue Pool = Rs 4,000 Cr

Each franchise’s share (40%) from central revenue pool = Rs 1600 Cr /8 teams =Rs 200 Cr

Now, lets calculate the total revenue earned by each franchise:

CREDIT

BCCI central pool share – Rs 200 Cr (as calculated above)
Gate revenue – Rs 20-30 Cr
Licensing – Rs 5 Cr
Jersey, associate and kit sponsorship – Rs 40-50 Cr
Total = Rs 200-285 Cr

DEBIT

Stadium operations cost – Rs 8 Cr
Stadium rent – Rs 2.4 Cr
Team support staff hiring costs – Rs 3 Cr
Team purse – Rs 85 Cr
Travel costs – Rs 4 Cr
Franchise staff – Rs 1.5 Cr
Marketing – Rs 6 Cr
Administration cost – Rs 1 Cr
Accommodation expenses – Rs 1.5 Cr
Miscellaneous – Rs 1 Cr

Franchise fees to the BCCI – Rs 54 Cr

Total = Rs 100-167 Cr

Average profit = Rs 100-120 Cr each (minus the prize money which starts from Rs 20 cr)

This is the approximate average profit that each franchise earns every IPL. Depending on the local sponsorship of each team, this figure would change.

What Will IPL 2021 Look like?

The year 2020 saw a 25% increase in viewership from last year and is set to increase further in 2021. This could also mean an increase in jersey sponsorship, which fell last year. Vivo is back as the title sponsor of the IPL for 2021 at ₹440 crore, which means a bigger central revenue pool.

IPL teams are expecting a 40% jump in revenue with digital sponsorship deals. Many brands (Myntra for Chennai Super Kings) are looking at creating digital content by partnering with franchises. These digital deals could help IPL teams score better in terms of sponsorship revenues. Such deals entail use of team name, logo or pictures of players to create digital campaigns. Though the teams fear losing Rs 25 to 35 Cr each in the view of ‘no physical audience’ diktat, the other revenue streams are likely to compensate all. We will have to wait and watch the ‘game’ for that.

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The Business of Cricket in India

Aakash Sharma — Sat, 13 Mar 2021 12:35:04 +0000

Cricket, the ‘gentleman’s game’, has leapt far beyond Britain’s boundaries over the decades. It has been adopted with more excellent skills and enthusiasm by the erstwhile colonies of the empire. And India has led the game for a long time now. India has been such a pioneer of the game that not only is its team the world’s number one, cricket is also the most profitable sport in India.

According to the report Impact of COVID-19 on Revenues of World Cricket and Indian Sports, Indian cricket revenue is approximately 45% of total world’s cricket incomes, 75% of which comes from IPL. Cricket accounts for nearly 85% of the Indian sports marketplace, with the Indian Premier League (IPL) being a significant contributor, while other sports including Football and Kabbadi follow the rank.

Let’s look into what has made cricket more than a genuinely Indian sport – a highly profitable business enterprise.

Indian Premier League (IPL) and Indian Cricket go hand-in-hand

India is a crucial performer in the global cricket economy. Cricket revenue in India accounts for 45% of the worldwide cricket industry’s valuation of $862.5 million, of which 75% is from the Indian Premier League (IPL). In an event year outside the ICC (International Cricket Council), the proportion of cricket sales in India increases by at least 10-15%.

According to the latest figures, out of the $ 1.9 billion in cricket revenue in 2019, about 72% came from cricket events’ emissions. Sponsors contributed 20%, and ticket entertainment sales were around 8% on the season’s games.

Besides Australia and the United Kingdom, which make large domestic transactions worth $1 billion each over four years, most other cricket boards rely on the Indian cricket market to strike bilateral deals with Indian broadcasters.

Despite being a cricket World Cup year in 2019, Indian Premier League (IPL) profit was 30% higher than the World Cup profit. The income from IPL 2021 is expected to be 70% higher than ICC WT20 in 2020.

When cricket took an Indian Spin- the Indian Premier League (IPL)

Launched in 2008, the Indian Premier League was led by Lalit Modi, a leader from the Indian cricket spectrum who wanted to create a cricket league in India comparable to the football leagues abroad. The Indian Premier League (IPL) is relatively new as it is only in its 11th season. Yet, it has achieved more sponsors and revenue levels than Major League Baseball in the United States.

The Indian Premier League is about business first, then cricket. It is a lucrative business in which all participants wish to participate, even in difficult times like today’s pandemic. IPL gives a fair share of the Indian economy. According to the 2019 report by Duff & Phelps, the series is worth $4.4 billion. A survey by the KPMG Sports Advisory Group outlined that the league contributed $157 million to India’s GDP in 2019 and had a cumulative impact of $265 million (1.2% of GDP) on the economy in 2019.

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India has led cricket for a long time now and has been such a pioneer of the game that not only is its team the world's number one, cricket is also the most profitable sport.

Indian Premier League (IPL) Revenue Streams

The majority of India’s sports revenue comes from streaming and sponsorship, contributing 65% and 30%, respectively. Unlike many other markets, IPL’s ticket revenue is only 5%. Since sponsors are the key drivers of the tournament, the league earns from the sale of the sponsors’ rights.

After public discontent with Chinese products, arising from the 2020 skirmishes on the Indo-China border, subsided, the Chinese tech giant Vivo is back at the helm. It has returned as the primary sponsor of IPL 2021. Other main sponsors of the event are Dream11, Pepsi and DLF.

All sponsorship deals are how companies promote their brands in the championship, as their names are mentioned, announced and photographed thousands of times. Many creative methods have emerged in the sponsorship industry over the years. IPL generates around Rs 700 crore ($ 95.6 million) per year from sponsors alone.

A lot is there in IPL to go around

While direct participants of the IPL mint fortunes off the league, there are a myriad of ways that businesses and entrepreneurs make money from the game. Celebrities get paid for appearances, and cheerleaders, media managers, marketing companies, and many other types of service providers also earn from the IPL.

The Indian Premier League is a behemoth in India’s sports scene, and everyone wants a piece of its large stakes. That is the reason why many start-ups like Unacademy, CRED, Byju’s and others have thrown their weight behind the league with the hopes of positive marketing and business expansion.

It is clear that the IPL is the grandest show in India, and it will go on for a long time, leading the change and its business spirit along the way.

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