Are IPL team owners set for a better run next season?

December 04, 2014 09:21 AM

It has made cricket more popular than ever before and made players much richer - even those who could not qualify for the national cricket team - but the Indian Premier League (IPL), hit by scams in recent times, is yet to prove a good business move for its franchisees.

Even as the Board of Control for Cricket in India (BCCI) and players have made good money, all but two team owners in the T20 cricket tournament continue to report losses.

The only exceptions are Bollywood actor Shah Rukh Khan's Knight Riders Sports, the owner of the Kolkata franchise that has won the IPL title twice, and GMR Sports, which owns Delhi Daredevils. While Knight Riders Sports has been reporting profits consistently since 2011-12, GMR Sports reported its first profit in 2013-14 despite its team neither winning a title nor ever reached the final tie.

GMR Sports has made its maiden profit, of Rs 7 crore, in 2013-14 - a sudden recovery from a loss of Rs 4.90 crore the previous year. Its revenue increased from Rs 151.11 crore in 2012-13 to Rs 159.11 crore. By revenue generated from the tournament, GMR Sports has been the most successful franchisee.

Indiawin Sports - controlled by industrialist Mukesh Ambani's wife Nita Ambani - the owner of the Mumbai Indians IPL team, has an accumulated loss of Rs 101.05 crore, according to its filings with RoC. In 2013-14, it reported a loss of Rs 5.04 crore, against Rs 4.4 crore the previous year. The company does not disclose its revenue figures in its RoC filings.

K P H Dream Cricket, co-owned by Bollywood actor Preity Zinta and the owner of Kings XI Punjab, reported a loss of Rs 4.35 crore in 2013-14. It had made a profit of Rs 78 lakh in 2012-13 and losses of Rs 1.5 crore and Rs 35 crore in 2011-12 and the previous year, respectively.

Rajasthan Royals owner Jaipur IPL Cricket, and Royal Challengers Sports that owns Royal Challengers Bangalore, did not file financial details for 2013-14 with RoC.

India Cements, which owns Chennai Super Kings, and SUN TV Network, which owns Sunrisers Hyderabad, run other businesses as well.

Rajasthan Royals, the winner of the inaugural edition of IPL and Chennai Super Kings, which won the title twice, are likely to be defranchised for next year's eighth season of IPL. This could eventually lead to a revenue loss of more than Rs 1,000 crore to the tournament.

More than 50 per cent of an IPL team's revenue comes from BCCI, primarily through central sponsorship and fees for digital & broadcast rights that the board shares with team owners. Besides, there are other sponsorships that teams get and earnings from ticket sales. On a game day, a team owner gets about 40 per cent of the stadium revenue as well.
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