IPL franchisees To Remain Profitable Despite No Gate Revenues, Drop In Sponsorships

With just 20 days to go for the 13th edition of the Indian Premier League (IPL), the team owners are looking for another profitable year, despite a significant drop expected in revenues.

Multiple team officials told ET that while their profits will dip as a result of drop in team sponsorships, Vivo’s exit as the IPL title sponsor and no visibility on gate revenues, they would have lost money if IPL 2020 didn’t take place.

“Every franchise has been affected but at the time of pandemic, you have to look at the bigger picture,” said Dheeraj Malhotra, CEO, Delhi Capitals. “All the franchises are still going to make revenue and profits. Less revenue is still better than no revenue.”

As per the format of the league, all the franchises get a share from the central revenue pool which comes to around 50% of all the BCCI’s revenues (after subtracting licence fee).

Recently, Vivo, the title sponsor of the IPL, which was paying Rs 440 crore per season to the Board for Control for Cricket in India (BCCI) paused its association for this year amid anti-China sentiments, and Dream11 has bagged the rights for Rs 222 crore.

Vivo’s exit would mean a reduction of each team’s revenue by Rs 13-14 crore.

Further, the gate revenues which are in the range of Rs 15-25 crore per season will also vanish as the matches will be played in the empty stadiums.

However, a Rs 3,000 crore cheque from media rights holder Star India will ensure that all the teams remain profitable.

“There will also be significant savings,” said Satish Menon, CEO, Kings XI Punjab. “There was also a hosting fee earlier, so far there is no clarity on that, but we are also going to save a lot on travel costs. This time, it’s just one time to travel to Dubai. In India, the travel cost alone was 3X.”

However, both Malhotra and Menon agreed that the hospitality costs will be higher as the teams will be staying in hotels for a much longer period.

On the sponsorship front, most of the franchisees have either given discounts or had to let go of some key sponsors.

For instance, Rajasthan Royals has roped in TV9 Bharatvarsh after their principal sponsor Dubai Expo 2020 pulled out due to postponement of the event.

Kolkata Knight Riders lost Byju’s and Delhi Capitals also lost their long time principal sponsor Daikin, which pulled out as the IPL was pushed to the September- November window.

“We have given a 10-15% discount to sponsors as the deliverables like meet and greets and hospitality passes etc. were taken away,” Malhotra said. “Daikin pulled out because they are an AC brand and it makes a lot of sense for them to sponsor us during summers.”

Delhi Capitals has roped in JSW Group as the principal partners.

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