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Indian Premier League(IPL) in a Finance Perspective

Indian Premier League(IPL) in a Finance Perspective. Introduction. Indian Premier League's origin is quite interesting. IPL has been launched in response to the rebel Indian Cricket League (ICL) launched by Zee Group.

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Indian Premier League(IPL) in a Finance Perspective

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  1. Indian Premier League(IPL) in a Finance Perspective

  2. Introduction • Indian Premier League's origin is quite interesting. • IPL has been launched in response to the rebel Indian Cricket League (ICL) launched by Zee Group. • It all started when Lalit Modi, the Vice President of the Board of Cricket Control in India (BCCI) envisioned the Indian Premier League. • It is created along the lines of club football in Europe, specifically the English Premier League.

  3. How does IPL make money? • Auction of broadcasting rights. • Title sponsorship and corporate sponsorship. • Sale of tickets (20% of tickets allocated to IPL). • Auction of franchisees rights. • Official Umpire’s sponsorships.

  4. What are the sources of income for an IPL Franchisee (ROI)? • Share in revenue from broadcast rights (equal share for all franchisee after IPL’s share). • Share in sponsorship money (60% of the amount distributed equally). • Share in revenue from sale of tickets. • Revenue from in-stadium advertising. • Sale of players to other franchisees. • Revenue from own sponsorship and corporate sponsorship.

  5. How is the IPL income distributed? • Share of broadcasting money with franchisees. • Share of sponsorship money with franchisees. • Share of ticket money with franchisees. • Inauguration expenses. • Prize money: $5 million ($3 million for winner; $2 million divided among others).

  6. How is the Franchisee income distributed? • Franchisee fees – 10% of total franchisee costs every year to IPL. • Players’ cost (Each franchise have paid around $4-6 million per year). • Match fees and Inauguration expenses. • Rent of stadium (expense of around Rs.2.5mn per match). • Marketing and promotional cost (around $3-4mn per team). • Fee for coaches, physiotherapists and other members. • Administrative cost.

  7. Inflows & Outflows

  8. Taxation • To be Accrued as Tax Deducted at Source (TDS) from the remuneration paid to players, umpires, coaches, commentators • Advertising, marketing and consultancy services of the sporting extravaganza will be taxed under the service tax bracket • Rs 91 crore as taxes (TDS) from the IPL 2008, while IPL 2009 hosted in South Africa had fetched a “few crores” as income tax accrued from the BCCI (the organiser) • Expected to rake in more than Rs 200 crore as taxes in IPL 2010 Source: Deccan Herald (Print media) March ‘09

  9. Thank You

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