How IPL Earns Money From Ads - Finance Revelation!

The Indian Premier League (IPL) is a money-spinner!

An advertising fiesta.

The game-changer of the digital marketing.

A mega festival for brands.

Don’t believe us? This post takes you through how IPL changes the finance game by earning money from ads.

The Indian premium League (IPL), which is the affluent franchise cricket league and one of the most viewed annual sporting events, is back to make its yearly contribution to the Indian Economy. The 2023 IPL has brought new rivalries, not just among the cricket teams but broadcasters as well. Considering that sponsors are pouring a huge amount of money, this money-spinner is all set to earn heftily for franchises.

Apart from the game and ever-exciting matches, the IPL earns mega-money from advertisements, ticket sales, etc. The tournament will be played in the country after three years and spectators are going to be allowed in the stadium, which was a huge miss since the onset of Covid. Popular celebrities will also be adorning the galleries. Moreover, it could also be the final season for Mahendra Singh Dhoni, making it all the way more important.

When it comes to ad revenue, over the last decade, IPL has emerged as the game-changer for the advertising Industry. Take a look at this exciting insight.

Potential Aspects of IPL Business Model

The significant ways through which IPL earns are as follow:

• Sponsorships
• Broadcasting rights
• Ticket sales
• Merchandise sales
• Player salaries
• Prize money

How does the IPL Generate Revenue?

Apart from in-stadia Earnings and ticket sales, a significant part of the IPL’s revenue comes from sponsorship and sale of broadcasting rights. Merchandise sale is also taking in the limelight. The Board of Control for Cricket in India (BCCI) auctions the broadcasting rights for a period of five years. Out of it, the BCCI retains 50% and gives the rest to franchises. Out of the remaining 50%, 45% is distributed among the franchises equally. And, the 5% goes to the franchise whose team performs the best.

How does IPL Advertising Business Work?

The cost of advertising during IPL can vary depending on various factors such as the type of ad, duration of the ad, time slot, popularity of the match, and the number of viewers expected to watch the match. Each match of IPL has around 2300 seconds of ad inventory. The charge is for 10 seconds of opening ads. Usually, a title sponsor purchases at least 300 seconds every match and pays nearly Rs. 5 lakhs for every second. The cost of a 10-second ad during IPL 2020 was estimated to be around Rs. 10 - 15 lakhs for some of the popular matches.

It is reported that, during the World Cup between India and Pakistan, the broadcaster reportedly charged Rs. 25 lakhs for 10 second advertisements, and Rs. 16-18 lakhs for the same duration in other World Cup matches. If compared, the pricing of the World Cup ads to that of the IPL, then the IPL ads seem reasonable.

The cost of advertising can be significantly higher for the playoffs and the final match. Moreover, the cost of advertising can also vary depending on the channel/platform chosen for advertising. For example, advertising on TV channels can be more expensive than advertising on digital platforms.

How will Spectators Spend their Money on IPL?

Currently, the country is undergoing an inflationary pressure where prices of everything, from staple to luxury, are on the rise while the employment levels are facing a dropping picture. But, the frenzy for cricket is going to dominate a substantial part of the population from different areas of the country, who will be doling out money in a gamut of ways, both directly and indirectly.

Indians will be using more broadband data or purchasing cable TV packs to stay hooked to the entire 52-day event; thus, consuming more electricity when the country is already facing stress with increasing power demands. Moreover, pub visits, restaurants, and potential stadiums will be adding more to the bills as people will be fascinated towards live action. Not just that, people will be exposed to plenty of brands; thus, they will be making impulse purchases as well.

IPL Ad Spends in 2023 – Rs. 5,000 crore and 140 Million Views!

On the Basis of the deals that Viacom 18 and Disney Star have bagged, IPL will be generating more than Rs. 5,000 crores from digital and TV advertising in 2023. After picking up the digital rights for billions, these two companies are in direct competition for generating the maximum profits.

As per data released by BARC, the opening game of IPL has reached a record number of 140 million people through the live broadcast on the Star Sports Network. There has been a 47% growth in consumption in comparison with 2022, while there has been a 39% growth in TV ratings. The Jio Cinema recorded a massive 50 million views in the first day itself.

Reliance picked the lion's share of IPL broadcasting rights (for 2023-2027) for a total of Rs. 23,758 crore. Disney Star got the TV rights for the Indian subcontinent by paying a whopping amount of Rs. 23,575 crores. Not just that, this brand has also bagged the sponsorship deals that are worth Rs. 2400 crores. Apparently, Viacom18 has a goal of achieving Rs. 3700 crores through ads. It has already closed a deal worth Rs. 2700 crores.

Alongside, there are several top brands that have sponsored both these digital platforms, such as:

All about Money Deals & Sponsorships

IPL is a cash-rich tournament and has turned into a decacorn with a valuation of $10.9 billion. In 2021, IPL contributed a whopping amount of Rs. 11.5 billion to the Indian economy despite being under the scrutiny of Covid guidelines. Considering this, it is nothing but obvious that brands would like to establish an association with something as huge as IPL. For a two-years of title sponsorship, Tata has paid approximately Rs. 670 crores. But, generally, sponsorships go beyond the ordinary and you can have headgear, audio, stumps, and umpire sponsors as well.

In 2023, small finance banks, such as Ujjivan Small Finance Bank, Equitas, and more have also joined the bandwagon of being sponsors. For this season, Rise Wordlwide (a Reliance-owned sports marketing company) has got 60 deals that are worth Rs. 400 crores.

How is IPL 2023 Different?

It is happening for the first time that the media rights were distributed among four different broadcasters, which put a full-stop on the monopoly of one media company.

In the beginning of 2023, the BCCI put four broadcasting rights packages for auctions.

• Package A: It went to Disney Star for the television rights across the Indian subcontinent. This package was sold at an amount of Rs. 23,575 crores for 410 matches

• Package B: It went to Viacom18 and covers the digital rights for the Indian subcontinent. This package was sold at an amount of Rs. 20,500 crores

• Package C: It went to Viacom18 again and contains non-exclusive digital rights for 18 chosen games in every season (13 double header games + four playoff matches + opening match) for the digital space. This package was sold at Rs. 3,273 crores

• Package D: This was for the broadcasting rights in the remaining parts of the world. This package was sold at a price of Rs. 1,058 crores. This package got split between the Times Internet (for the US, North Africa, and West Asia) and Viacom18 (for the UK, South Africa, and Australia)

Apart from these changes in the current season, the number of matches has increased from 74 to 94. The women’s IPL has been announced too.