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SBD Global/April 15, 2014/Leagues and Governing Bodies

Most Indian Premier League Franchises Yet To Taste Profit As Tourney Enters Seventh Edition

A "prodigious amount of money" rides on the Indian Premier League, according to Digbijay Mishra of the Indian BUSINESS STANDARD. Most of the IPL's teams, however, are "yet to taste profits despite the tournament running into the seventh edition" in '14. Sports marketing experts believe that "ideally a sporting property like IPL should start reaping profits after the first five years, but that has not been the case with most of the team owners, both on a standalone or cumulative basis." The Board of Control for Cricket in India has "lowered the television rights payout by 20 percentage points to the franchises on every game-day in IPL7 and gate revenues have been sliding at many of the stadiums," primarily due to an "overdose of cricket" and an "array of controversies." Stadium revenues account for about 40% of revenue for the franchise on every game day. TV ratings, too, "have slid from the initial editions of the T20 tournament." While the cost for every franchise has "gone up, the dip in advertising rates and sponsorship contracts are squeezing their accounts." Deloitte Haskins & Sells partner Ashesh Jani said, "Usually, with a property like IPL, it is expected one would make profits after five years, but logistics costs have gone up and recent controversies have infused doubts over the league among many stakeholders. I think the owners may have to wait for another one or two seasons to make any sort of profits" (BUSINESS STANDARD, 4/14).
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