Lalit Modi promises more millions in IPL

Barely two years after its inception, the Indian Premier League (IPL) has already grown into the BCCI’s multi-billion dollar baby. Apart from the staggering sums paid for the two new teams, IPL commisioner Lalit Modi estimates the Twenty20 tournament is growing – in terms of revenue — at the rate of almost 100 per cent every year.

Modi promises to rake in more moolah for everyone – the new franchisee owners from Pune and Kochi included.

“IPL is the biggest Indian global brand, which is worth $4.5 billion,” asserted Modi said. “In its first season, each IPL match was worth $1 million in revenues. In 2009, each match was worth $2 million and in this ongoing third year, it’s worth $3 million,” he said.

From here on, Modi’s projections get bigger. He estimates an exponential jump in revenue per match to $5.5 million, next year – and to $15 million to $20 million within the sixth or seventh year. What contributes to these sums is payments from media rights, central sponsorship (including title, ground and team), ticketing and hospitality.

The IPL franchisees get 72 per cent of this revenue as their share. In addition to this, another 8% is distributed among them depending on their standing in the league. In total, therefore, 80% of the IPL’s central revenues goes to the franchises.

In the 2010 edition of the IPL, for instance, team owners should earn $2.4 million of the $3 million earned from every match played by their team. The remaining $600,000 would go to the BCCI coffers.

From 60 matches played this season, that translates to about $144 million of revenue generated for all the teams put together, yielding an average of $18 million for every franchise.

In Season IV, with 94 matches slated to be played, Modi’s projection of per match revenues of $5.5 million would translate into $517 million. With 80% of this amount being divided among 10 teams, every team would on average earn a little more than $41 million.

That’s if the projection come true. Industry sources believe Modi’s maths for the IPL’s future earnings are exaggerated. Modi says he stands by his calculations. “This season, stadiums are going packed. Therefore, there’s obviously more potential to be exploited where viewers are concerned,” he reasons. “Not just fans of this game, with every edition we’re finding more strategic partners and potential stake-holders wanting to be part of IPL,” he adds.

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