How IPL Franchise Earn Money and is it Tax-Free?

Indian Premier League IPL franchises primarily earn money from media image rights, stadium seat sales, sponsorship deals, and branded merchandise.

The IPL is a competition valued at several billion dollars since its first edition in 2008. Many franchises feature in the league every season and it continues to attract huge investment from club owners. These owners run franchises and tend to make lots of money from their expenditure on several club needs.

Let’s explore how owners make money from controlling an IPL franchise.

Ticket Sales

Many IPL games usually see packed stadiums, even if many cricket fans prefer to see games from home or in public viewing centres. Streaming services and other online platforms also make IPL games available on-the-go, wherever you are. IPL franchises get tons of cash each season from fans who wish to experience the game live.

Huge stadiums get to accommodate tens of thousands of diehard supporters each season. Gate receipts, ticket sales, and other in-stadium revenue sources directly go to the IPL franchise’s coffers. Some franchises collaborate with local organizing associations to manage and receive funding from fans during IPL games.

Sponsorship Deals

Many companies want popular IPL franchises to be the face of their brands. These companies will provide ad revenue to IPL franchises directly, boosting the money available to such teams. Every IPL team has a major brand sponsor and many sub-sponsors. Deals from such sponsors are usually money-spinners and allow brands access to a massive pool of cash.

Sponsorship agreements beneficial to IPL franchises can total over $10 million dollars depending on terms reached.

Merchandise Sales

Fans of IPL cricket love merchandise of different franchises, and this provides another money-spinning opportunity to owners. Franchise owners invest in mass production of training kits, matchday jerseys, branded accessories, and other merchandise. Buyers can access a massive collection of sports memorabilia across franchises at set prices.

Franchise owners agree contracts with wholesale manufacturers to meet demand of buyers for such sports goods. Most sports jerseys and other kits are available during matchdays, at stadium stores, or online. You can get anything from shirts, knee guards, helmets, scarves, cricket balls, and so much more from such stores.

Media Image Rights

The Board of Control for Cricket in India (BCCI) controls media rights of the IPL. Collection of streaming revenue, funding from media contracts, financed TV deal fees, and more go to this governing body.

The BCCI then shares a fraction of the entire finance pool among IPL franchises. Reports suggest that this fraction ranges between 35% and 50% of the entire funds receive. Most teams get massive funding to run operations and manage the franchise with their share of the revenue.

Winners’ Prize Money

Best-performing IPL teams also get more funding apart from image rights revenue. Teams placed first to fourth get massive prize monies added to their media rights cut, boosting total revenue to such franchises. For example, IPL 2022 prize money saw franchises placed first to fourth receive $2.6m, $1.7m, $0.93m and $0.86m respectively.

Such prize money adds a spark to the IPL competition, triggering teams to give their best in search of a bigger pay check.  

Is IPL Earnings Tax Free?

The BCCI won an appeal in 2021 at the Income Tax Appellate Tribunal (ITAT) exempting its earning from taxation. Franchises and the governing body are not liable for taxes imposed after this ruling.

Why Does the IPL Attract So Much Money?

Massive local fanbase

Cricket is India’s most-popular sport and attracts massive fanbases from foreign countries too. Every IPL game is seen by millions, raking in revenue for governing bodies, organizers, and franchises. Ad agencies also place lots of commercials in these events to drive their marketing campaigns.

Combined factors of India’s massive viewing population, huge fanbases, ad revenue, and other money sources boosts IPL revenue. Many cricket leagues worldwide do not attract as much funding available to India’s premier cricket competition.  

Star-studded lineup

IPL franchises spare no quarter in recruiting the very best cricketers worldwide. Many teams in the competition have skilled players from England, Australia, South Africa, The West Indies, and other countries. Top talent from countries worldwide ensures viewers always get the best cricketing action.

Fast-paced cricket

Twenty20 (T20) cricket is exciting, and the IPL provides viewers sporting action they need. The game offers cricket fans a refreshing dose of quick-fire cricket, allowing lovers of this sport access to unrivalled entertainment. Fans of cricket who seek entertaining sporting activity from top sides always fancy this league. That’s why IPL franchises usually attract investment from foreign brands.

IPL cricket is in such huge demand and drives the creation of sister franchises in countries like Canada and South Africa. Such publicity helps IPL franchises gain greater visibility across fanbases worldwide.

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