When it started IPL was a startup. It barely made any money for the franchises.
Now it’s one of the most profitable sporting leagues in the world.
Here’s how IPL became so great. A thread🧵
Now it’s one of the most profitable sporting leagues in the world.
Here’s how IPL became so great. A thread🧵
The business and revenue model of IPL is quite simple, yet admirable.
They sell entertainment to India which is emotionally attached to cricket.
The major portion of the total revenue (around 60%- according to some reports) comes from selling media rights to broadcasters.
They sell entertainment to India which is emotionally attached to cricket.
The major portion of the total revenue (around 60%- according to some reports) comes from selling media rights to broadcasters.
BCCI conducts this auction and earns a huge revenue from big giants.
We always witness a cut throat competition among big media companies over the streaming and broadcasting rights, so BCCI might come up with multiple broadcasters this year again.
We always witness a cut throat competition among big media companies over the streaming and broadcasting rights, so BCCI might come up with multiple broadcasters this year again.
BCCI keeps some amount with itself and shares the rest with the team owners.
Companies like Reliance, SONY, Amazon are trying to steal the headlines and entertain 1.5 billion people of this country.
Companies like Reliance, SONY, Amazon are trying to steal the headlines and entertain 1.5 billion people of this country.
Their other source of revenue is bringing big corporate houses on the field for franchise as well as advertisement slots.
Companies pay a huge sum to buy the franchise and become team owners like…
Reliance Industries, United Spirits Ltd. and Red Chilies Ltd. (SRK)
Companies pay a huge sum to buy the franchise and become team owners like…
Reliance Industries, United Spirits Ltd. and Red Chilies Ltd. (SRK)
Franchises tie-up with the big brands who are willing to endorse their logos on the jerseys and kits for sponsorship.
Companies pay a hefty sum to put their logos in front of cameras to make their audience aware about them and their products.
Companies pay a hefty sum to put their logos in front of cameras to make their audience aware about them and their products.
It helps them to imprint their identity on the memory of their customers, generate repeated sales and also build a lot of trust.
When we see Dhoni wear a brand on his jersey, we’re definitely going to trust it.
When we see Dhoni wear a brand on his jersey, we’re definitely going to trust it.
We’ve also seen our favourite players in the major advertisements on the screen as part of their sponsorship deals using certain products.
How can we forget O la la la O ley O 😂, and Jio Dhandhana dhan ads😂
How can we forget O la la la O ley O 😂, and Jio Dhandhana dhan ads😂
Apart from this, the franchise owners have the right to charge the ticket price as per their will in their home match.
They give a small cut to their sponsors and BCCI, and the rest belongs to the company itself.
They give a small cut to their sponsors and BCCI, and the rest belongs to the company itself.
Obviously the pricing power does not entirely lie in the hands of the team owner.
There are certain qualitative and quantitative components like- hype of the match, seating capacity of the stadium etc- that affects the price.
There are certain qualitative and quantitative components like- hype of the match, seating capacity of the stadium etc- that affects the price.
All franchises sell their customised merchandise like t-shirts, caps etc. that earns them a good money.
All this is the product of building a long term Intellectual property.
All this is the product of building a long term Intellectual property.
IPL teams weren’t very profitable till 2018. Now they are creating a ton of cash because of their IP value going up, popularity of the tournament going up, brands are willing to pay more but most importantly...
The rise of consumerism in India is the main reason why brands are willing to throw more money for more attention and getting their name attached to franchises.
Another reason is the broadcasting rights are being sold at a crazy high price now.
Star purchased rights till 2022, now we’ll see them being purchased for a much higher price.
50% is kept by BCCI and the other is shared between the teams.
Star purchased rights till 2022, now we’ll see them being purchased for a much higher price.
50% is kept by BCCI and the other is shared between the teams.
Attention is the real oil right now. The more the eye balls, the more money anyone is willing to pay for it.
Cricket already had India’s attention, but IPL totally changed the game by creating this small festival which matters to a lot of people.
Cricket already had India’s attention, but IPL totally changed the game by creating this small festival which matters to a lot of people.
People love watching their players compete and brands, distributors, broadcasters run for such an opportunity.
This concept of attention through a limited event isn’t new though. NFL has been doing it for years.
This concept of attention through a limited event isn’t new though. NFL has been doing it for years.
The Super Bowl is the final of the NFL and people literally sit and wait for the innovative ads brands run on that day. T
he ads are crazy expensive, but brands won’t mind paying that because it’s worth it.
he ads are crazy expensive, but brands won’t mind paying that because it’s worth it.
When so many people watch the match, it’s very easy to make it a talking point.
IPL season is a time for companies to come up with innovative marketing campaigns and ads as people eagerly wait for this event and celebrate it like a festival.
IPL season is a time for companies to come up with innovative marketing campaigns and ads as people eagerly wait for this event and celebrate it like a festival.
Can’t wait for the CRED ad tomorrow 👀. These ads have literally made CRED a talking point in the country.
Attention also becomes a great breeding ground for distribution and creation of new IP. IPL created intellectual property out of all these teams. This brand value is used to sell anything.
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