Riding on big money: IPL and its chief Lalit Modi

The Indian Premier League (IPL), where Lalit Modi has been the undisputable king until now, is expected to earn more than Rs 500 crore this year as profit from the ongoing 45-day cricketing extravaganza. Considering the high stakes, it is no surprise the tournament often attracts controversy.

IPL makes money from the fees which the eight franchisees pay them annually. It also gets a 20 per cent share of what Sony Set Max forks out for getting the rights to broadcast the feed, and a similar share of fees paid by central sponsors like DLF or Vodafone.

ACTION TODAY

# Modi alleges that Tharoor has a hidden agenda of taking away the Kochi franchise to Abu Dhabi

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# Opposition parties decide to keep up the pressure on Tharoor; BJP, SP, RJD and other parties demand that Prime Minister should explain to the Parliament why he is not sacking Tharoor

# Tharoor’s associate — Sunanda Pushkar — hires a Dubai based lawyer Ashish Mehta; to consider filing for damages, according to news reports

Add to that the new rights sold this year for showing the matches on YouTube and for theatrical rights. It has also levied a programming licensing fee from Viacom network, which is showing entertainment programs associated with the game.

Experts who closely watch IPL’s finances say the revenue it will generate is around Rs 634 crore this year.

The eight franchisees, who together bid Rs 3,300 crore for owning their respective teams, pay 10 per cent of the amount each year before the IPL begins. And they will do so for the next seven years.

Thanks to the high bids made by the two new franchisees — Sahara and Rendezvous Sports — the franchisee income of BCCI will nearly double to Rs 653 crore next year.

In simple terms it means other things being equal, BCCI will earn nearly Rs 1,000 crore from just one season next year. With more games and more days being added to IPL next year, most analysts expect it will also make more from sponsorships. Obviously with this kind of money controversy cannot be far behind.

While break up of costs are not so easy to find, those involved in the process say that it could be in the region of around Rs 100 crore. These include match prize money, travel, security, umpire fees and other organizational costs.
 

GAMING RICHES
EARNINGS OF IPL
Central sponsors, YouTube sponsors, theatrical rights:	Rs 170 cr
Broadcasting fees:	Rs 134 cr
Franchises fees:	Rs 330 cr
TOTAL:	Rs 634 cr
EXPENSES OF IPL
Umpire salary:	Rs 6 cr
Prize money:	Rs 27 cr
Others including travel,: security and organisation	Rs 50-65 cr
TOTAL:	Rs 83-98 cr

"The controversy will not have any bearing on the earnings of anyone involved in IPL. The earnings of BCCI as well as the franchises rest on legal contracts which are not going to be affected due to this issue," said Rajesh Jain, head of media and entertainment, KPMG India.

IPL for instance has secured sponsorship deals this year from a host of new players — Swiss watch brand Banderlier, Karbonn Mobiles, Indiagames, Maxx Mobile, which collectively are worth at least Rs 125 crore a year. Tyre Company MRF too joined the IPL bandwagon by sponsoring the blimp, a balloon that floats over the stadium, in a deal said to be worth Rs 15 crore a year

IPL commissioner Lalit Modi however earlier said that he only expects the earnings to go up "This season, stadiums are going packed. Therefore, there's obviously more potential to be exploited where viewers are concerned," he said. "Not just fans of the game, with every edition we are finding more strategic partners and potential stake-holders wanting to be part of IPL," he added.