The Indian Premier League is a twenty twenty cricket league founded in 2007 with the first season starting in 2008. There are 10 franchised teams based around the major cities in India. The team ownership were auctioned off expecting around $400 million (originally 8 teams) and eventually reached $720 million. The two new franchises added in 2010 were purchased for $330 million a piece showing how much the early franchises grew in value.
Each franchise has to place a 10% purchase price guarantee with the BCCI ( Indian Cricket Board). The teams signed a deal with the cricket board that shares all the revenue at a 60/40 split with the teams earning the 60%.
This season there are 74 matches in total between March 28th and May 31st so basically two months. Each match generates roughly $16 million in central sponsorships and TV rights. This is roughly $2 billion and does not include team sponsorships so one can see how this is a big money spinner. The tv rights and central sponsorships negotiated by the cricket board account for around 70% of the teams revenue with team sponsorships making up the remaining 30%.
A recent change has seen many of these franchises being part of other tournaments around the world so they have become more global expanding their fan bases in multiple countries.
Just to get an idea the top earning team this season being Kolkata Knight Riders is expected to earn $82 million. Fan base is definitely a major money spinner with KKR having multiple fan parks available for fans who cannot afford or obtain tickets for the live home matches.
The teams have a budget of 125 crore or $76.3 million dollars to build a team of 18-25 players with a maximum of 8 overseas players. This budget also accounts for the coaches and back room staff plus accommodation and travel of the squad.
The top players are paid big salaries for the 2 month tournament and are the highest paid cricketers in the world. One player this year is earning $3 million for the 8 weeks and the top international stars are not far behind. The top Indian players are the big earners because local players represent 9 of the playing 11 besides the substitutes which are allowed to be swapped in and out according to what the situation requires.
The majority of the squad is made up of the young up and coming players who will be on smaller salaries, but still big money compared to salaries earned in India.
The IPL as a sports league business is maturing so teams need to work according to budgets and not get carried away spending big money on one or two players. This after all is still a business even though a few of the teams have risen into the billions of dollar range now. Some teams have bought in directors of cricket to get the balance right between players and coaches so the owners are able to control the team budget better. In the past you had the owners and then the head coach followed by his coaches who ran the show. This is not necessarily the case now and things are far more business like which can only be a good thing really.