For once, each IPL franchisee poised for ₹150+ crore profit

The Indian Premier League franchisees will finish the 2018 season with assured profits. The gestation period for the ten-year-old league is over. For each of the team owners. The eleventh season is poised to witness each one of the eight franchisees earn an approximate ₹150 crore profit – a first for some of the team owners.

The IPL revenues across the board, including the franchisees’ sponsorship sales, have seen an unprecedented surge this season. The windfall was triggered by Vivo’s ₹2,199 crore commitment to retain the IPL title sponsorship rights – a 554% annual raise over the previous two-year deal. Next came Star Sports’ blockbuster ₹16,347.5 crore commitment for absolute media rights of the league between 2018 and 2022 (both seasons included). The twin deals have assured each franchisee of approximately ₹ 194 crore average revenue from the IPL central pool and an annual gross profit in the range of ₹150 crore.

The franchisees collectively gain a net 40% from revenues in BCCI’s IPL account. “It (the revenue distribution) is 50-50 between the BCCI and the franchisees. However, at the same time, the board also has a 20% share in franchisees’ respective revenues. Hence, after taking that into account, it becomes 40% for the franchisees and 60% to the BCCI,” BCCI officiating treasurer Anirudh Chaudhary had clarified to insidesport.co earlier.

In addition to the Central Pool share, the franchisees will be earning ₹55-65 crore from their sponsorship sales, gate receipts, and other affiliate sales. For once, they need to pay the big fat franchisee fee to the BCCI. Instead, the board takes 20% from the franchisees earnings on account of the franchise rights.

The BCCI Central Pool revenues will primarily come from media rights (STAR Sports), title sponsorship (Vivo) and other central sponsors. The gross annual revenue in BCCI IPL account for season 2018 is set to reach ₹3,910 crores.

Each franchisee share from the central pool revenue will vary in proportionate to the license fee each team owner had paid for the franchisee rights. The fee and revenue share for the teams like Mumbai Indians and Delhi Daredevils has been higher than for the teams like Kings XI Punjab and Rajasthan Royals as the former centers hold better revenue potential – both in terms of sponsorship and gate receipts.

The numbers given are a referral indicator derived from the information gathered from the franchises and the BCCI officials. The gross revenue for all the franchisees, like in the previous years, are set to vary. However, for once each of the franchisees is assured of a profit in their balance sheets for the IPL 2018 season. For some, though, it might take a season or two to write off their accumulated deficit for the past ten seasons.

The franchisees, meanwhile, are scheduled to receive ₹ 85 crores as the first installment form their share from this season’s net central rights income. The BCCI/IPL will disburse a total of ₹680 crore as the first consolidated share installment to the franchisees. BCCI’s Committee of Administrators, among various other payments, have cleared to release the first installment of franchisees’ central pool revenues.