Thursday, March 20, 2008

Karmayudh ya Dhanyudh ?

The IPL cricketing extravaganza will see eight teams representing different cities slug it out in the Twenty20 format. The teams are franchisees which are owned by the biggest names in corporate sector and Bollywood, but what’s more interesting is how the money is going to flow in this mega-event!

Let’s have a look at revenues and expenses of this billion dollar league.

*BCCI’s share: The winning bidders will immediately have to pay only 10 per cent of the price they offered. For example Mukesh Ambani’s Reliance Group has to pay a little over Rs 44 crore for the first year. But they have to make similar payments for the next 10 years.

*TV rights: The BCCI will also get TV rights money. The sum is Rs 4200 crore put up by Sony and World Sports Group. It is to be paid over 10 years.

*BCCI’s expenses: The main expense is raising prize money and that will be 16 per cent of the TV rights.

*Franchisees’ expenses: Apart from the winning bid, the franchisees will further bid for at least 16 players, whose minimum salary will be approximatrely Rs 20 lakh per season.They will also have to pay for training, coaches, support staff and their own promotions.

*Franchisees’ revenue: The Board keep 20 per cent of the money raised from TV rights every year and another 16 per cent kept aside. The remaining 64 per cent is distributed among the eight franchisees as their income. They can also raise revenue from embossing logos on T-shirts, but not the principal naming rights.

These large volume of the money indicate that the real winner (read happy) will be the franchise which makes the highest profit and may not be the team which wins the actual cricket battle, similar to football leagues in which Manchester United and Real Madrid are successful clubs because they make lot of profit. Cricket is probably, but not rightly, going to be in the sideline.

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