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5 Way by Which IPL team owners earn money and revenue | IPL 2016

The audience for cricket and the population is growing in the largest democracy in the world and I don't see it decreasing in the near future. Sponsorship contracts are based on viewership, so increasing number of viewers means more revenue. Here we Discuss 5 Ways of Earning in IPL 2016
The revenue of all IPL teams are classified into the following:
1. Media rights
2. Sponsorship
3.Ticket sales
4. Stall rental
5. Prize money

1. Media rights(TV broadcasting rights)
The media rights forms about 60 to 70 percent of all types of revenue earned by an IPL team. This income is referred to as Central rights income.

2. Sponsorship 
The logos on the players jersey,helmets, teams training kits and the barricades near the boundaries all form part of sponsorship revenue.The sponsorship revenue forms about 20 to 30 per cent of revenue for an IPL team.

3.Ticket sales 
The sales of ticket in stadiums form a part of revenue for the home team. The denominations of ticket pricing  is decided by the owners. A certain (small) portion of tickets are given to sponsors and the BCCI as per the agreement, The team management outsource the booking and collection of revenue to third parties like "big tree entertainment (book my show)". These guys charge a commision of the total revenue from ticket sales, usually between 1 to 5 per cent. The ticket revenue forms around 10 per cent of revenue of the ipl teams.

4.Stall rental
The food served to the various spectators is given on a contract basis to a third party who in turn sub contracts it. The term is usually a fixed amount and collected on per stall per match basis.

5. Prize money 
The prize money goes to the owners and the amount is distributed at their discretion among the players and support staff. (Terms lay down that, at least fifty per cent of the prize money is distributed among the players).

6. Merchandise sales
The franchises sell merchandise like T-shirts and caps through their web-site and other channels. This revenue stream can be a big money spinner depending on the fan base of the team.

7. Champions League Twenty20
The top four teams in the IPL qualify for the Champions League every year and are entitled to a share in the amount paid for the broadcasting rights.

Q: 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)

Q: 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 franchisee
  • Revenue from own sponsorship and corporate sponsorship

Q: 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

Source: Quora