Investors who paid top dollar to own a part of the Indian Premier League (IPL) opportunity are now on a good wicket.
Franchise owners expect to earn around four-five times more this year than they did during the inaugural season of the 20-over league in 2008, thanks to a deluge of sponsorships and brand associations, according to estimates put together by Mint after speaking with franchise owners and media buyersThis comes after initial reports that sponsors and advertisers were sceptical about IPL’s success this year, when it had to be moved to South Africa after the Indian government said it could not provide security cover to the league during the election season, and that many had walked away from earlier commitments.
The team owners will also earn significantly more from the new broadcast deal the IPL management signed with sports marketing company World Sports Group (WSG) and Multi Screen Media Pvt. Ltd (MSM) this year. Last year, the deal had been signed for around Rs4,000 crore for 10 years, while this year it was renegotiated at Rs8,200 crore for nine years.
While the three partners did not share the details of the new broadcast deal officially, two executives from IPL and WSG said that the new deal has been linked with IPL’s viewership. IPL’s management may only get 33% of the contracted revenues for the first five years. Franchisees will get 80% of this 33%.
Based on this, the eight franchisees are likely to take home between Rs60 crore and Rs90 crore each. Last year, the teams earned Rs20 crore each from broadcast rights.
Source – livemint.com