Ipl Franchise Earnings For 2008

[mage lang=”en|sp|en” source=”flickr”]ipl franchise earnings for 2008[/mage]

The Truth about IPL Tournament

The Indian Premier League (also known as the “DLF Indian Premier League” and often abbreviated as IPL), is a Twenty20 cricket competition created by the Board of Control for Cricket in India (BCCI) and chaired by the Chairman & Commissioner IPL, BCCI Vice President Lalit Modi. It is now the most watched domestic Twenty20 competition in the world. The first season of the Indian Premier League commenced on 18 April 2008, and ended on 1 June 2008 with the victory of the Rajasthan Royals against Chennai Super Kings in the final at the DY Patil Stadium, Navi Mumbai.

As the second season of the IPL coincided with multi-phase 2009 Indian general elections, the Indian Government refused to commit security by Indian paramilitary forces. As a result, the BCCI decided to host the second season of the league outside India.[3] All 59 matches of the second season, abbreviated as IPL 2, are taking place in South Africa. BCCI blamed the attitude of the UPA-led governments at the centre and in Maharashtra and Andhra Pradesh for the decision.[4]

Teams play each other two times in a round robin system, with equal number of home and away matches. The top four ranking sides will progress to the semi-finals.

The inaugural 2008 tournament started on 18 April 2008 in Bangalore and lasted for 46 days, with 59 matches scheduled, out of which 58 took place and 1 was washed out due to rain

The IPL is predicted to bring the BCCI income of approximately US$1 billion, over a period of five to ten years. All of these revenues are directed to a central pool, 40% of which will go to IPL itself, 54% to franchisees and 6% as prize money. The money will be distributed in these proportions until 2017, after which the share of IPL will be 50%, franchisees 45% and prize money 5%.[5]

[edit] Television rights

On 15 January 2008 it was announced that a consortium consisting of India’s Sony Entertainment Television network and Singapore-based World Sport Group secured the global broadcasting rights of the Indian Premier League.[6] The record deal has a duration of ten years at a cost of US $1.026 billion. As part of the deal, the consortium will pay the BCCI US $918 million for the television broadcast rights and US $108 million for the promotion of the tournament.[7] Broadcast Live on Setanta.

20% of these proceeds would go to IPL, 8% as prize money and 72% would be distributed to the franchisees. The money would be distributed in these proportions until 2012, after which the IPL would go public and list its shares.[8]

Sony-WSG then re-sold parts of the broadcasting rights geographically to other companies. Below is a summary of the broadcasting rights around the world……..
Winning Bidder     Regional Broadcast Rights     Terms of Deal
Sony/World Sport Group
Global Rights, India     10 years at USD 1.026 Billion[6]
Network Ten (ONE)     Free-to-air television in Australia     5 years at AUD 10-15 Million.[9]
Sky Network Television     New Zealand broadcast rights     Terms not released
Setanta Sports
United Kingdom and Ireland on a subscription basis     5 years, terms not disclosed.[10]
Arab Digital Distribution     Middle East broadcast rights on ADD’s ART Prime Sport channel. Will broadcast to United Arab Emirates, Bahrain, Iran, Iraq, Jordan, Kuwait, Lebanon, Oman, Qatar, Palestine, Saudi Arabia, Syria, Turkey, Algeria, Morocco, Tunisia, Egypt, Sudan, Libya and Nigeria.     10 Years, terms not released.[11]
Willow TV     Rights to distribute on television, radio, broadband and Internet, for the IPL in North America.     5 years, terms not released.[12]
South Africa and Nigeria broadcast rights     Terms not released
GEO Super
Pakistan broadcast rights     Terms not released
Asian Television Network
Canadian broadcast rights. Aired on ATN’s CBN & ATN Cricket Plus channels on a subscription basis. Aired on XM Radio’s ATN-Asian Radio as well.     5 years, terms not released.[13]

In India, the IPL has become one of the most popular events of the year. Around the world, reception has varied. In Pakistan the reception was described by Pakistani cricinfo editor Osman Samiuddin as ‘massive’, suggesting that it attracted even non-regular cricket followers and that the popularity of the Kolkata Knight Riders was great.[14] GEO Super telecasted the matches and also included a popular show called Inside IPL. A similar positive reaction was seen in Sri Lanka, with interest in the Mumbai Indians being large due to the presence of cricket hero Sanath Jayasuriya. Bangladesh has also positively reacted despite only one Bangladeshi player being involved. The Knight Riders were the most popular team. These subcontinental countries were also helped in that the time-slot of the matches fitted in with prime time in these nations.

South Africa has seen moderate viewership of the IPL, and by many accounts viewers have found it enjoyable. However, many were unable to relate to any of the teams, although a large number simply supported Mumbai Indians because of the presence of Shaun Pollock. The timing worked in South Africa but the IPL did not overcome the power of Premier League football or rugby. In England, although the country’s governing body did not allow its players to take part, the IPL was very popular with those who had access to the cable television channel that aired the games.

In the West Indies, the IPL became so popular that it, according to Vaneisa Baksh, threatened to overtake test cricket completely in ‘certain sections of West Indian fans’. While free-to-air coverage has not been complete and it has not ignited passions, it has remained a popular watch.

The IPL was less popular in Australia and New Zealand, mainly due to the time zone differences. Nevertheless, the IPL consistently won its free-to-air timeslot of 8:30 P.M. and 12:30 A.M. Australian Time, and 10:30 P.M. and 2:30 A.M. New Zealand Time for subscription TV.

[edit] Rules

The official rules for the tournament are here.

There are five ways that a franchise can acquire a player. In the annual auction, buying domestic players, signing uncapped players through trading and buying replacements.[15][16] In the trading window the player can only be traded with his consent. The franchise will have to pay the difference between the old contract price and the new contract price. If the new contract is worth more than the older one then the difference will be shared between the player and the franchise selling the player.[17]

Some of the Team composition rules are:

* Minimum squad strength of 16 players plus one physio and a coach.
* No more than 8 foreign players in the squad and at most 4 in the playing XI.For the 2009 edition franchises are allowed 10 foreign players in the squad. The number allowed in the playing XI remains unchanged at 4.
* A minimum of 8 local players must be included in each team.
* A minimum of 2 players from the BCCI under-22 pool in each team.

The players accorded “icon” status are: Sachin Tendulkar, Rahul Dravid, Sourav Ganguly, Yuvraj Singh and Virender Sehwag . The total spending cap for a franchisee in the first player auction was US $5m. Under-22 players are to be remunerated with a minimum annual salary of US $20,000 while for others it is US $50,000. Icon players are to be paid 15% more than the highest paid player in their respective teams.

There are some rumours that the 2010 season of the IPL will include a new rule commonly used in “Backyard Cricket”; the one-hand-one-bounce rule.

[edit] Official website

The IPL negotiated a contract with the Canadian company Live Current Media Inc. to run and operate its portals and the minimum guarantee has been negotiated at US $50 million over the next 10 years.[18] The official website of the tournament is www.iplt20.com.

[edit] Current Season
Main article: 2009 Indian Premier League

The 2009 season coincides with the upcoming general elections in India. Due to concerns regarding players’ security, the venue had shifted to South Africa.

[edit] Franchises

[edit] Existing Original Eight

The winning bidders for the eight franchises were announced on 24 January 2008.[19] While the total base price for auction was US $400 million, the auction fetched US $723.59 million.[20] The official list of franchise owners announced and the winning bids were as follows.
Franchise     Owner(s)     Price (USD)
Mumbai Indians
Mukesh Ambani (Reliance Industries)     $ 111.9 m
Royal Challengers Bangalore     Vijay Mallya (UB Group)     $ 111.6 m
Deccan Chargers
Deccan Chronicle,Rajesh Dandu Amity Business School, Bangalore     $ 107.0  m
Chennai Super Kings     India Cements (N Srinivasan)     $ 91.90 m
Delhi Daredevils     GMR Holdings (Grandhi Mallikarjuna Rao)     $ 84.0 m
Kings XI Punjab
Ness Wadia (Bombay Dyeing),Priety Zinta, Mohit Burman (Dabur)
and Karan Paul (Apeejay Surendera Group)     $ 76.0 m
Kolkata Knight Riders
Red Chillies Entertainment (Shah Rukh Khan, Gauri Khan, Juhi Chawla and J Mehta)     $ 75.1 m
Rajasthan Royals     Emerging Media (Lachlan Murdoch, A.R Jha and Suresh Chellaram),
Shilpa Shetty, Raj Kundra     $ 67.0 m

[edit] 2010-11 Expansion

After the success of the first season, it has been reported that four new franchises will join the IPL in 2010-11, increasing the total number of teams to 12. The new confirmed franchises will be based in Ahmedabad and Kanpur, with Anil Ambani’s name associated with the ownership of the Ahmedabad franchise, and Sahara Group is touted as the possible suitors to buy the Kanpur franchise. Other cities being linked with getting a franchisee are Patna-Ranchi joined franchisee or a team from the North-East to promote the sport in the region and possibly one team from the north-western states of Jammu and Kashmir, Himachal Pradesh and Uttarkhand. [21]

Expansions- 2010-11 Season( 4 new teams)-

* IPL Ahmedabad
* IPL Kanpur
* Any two from the following-

1. A Patna joined franchisee
2. A team from the Assam
3. A team from the north-western states of Jammu and Kashmir, Himachal Pradesh and Uttarkhand

[edit] 2012-13 expansion

The unselected team from the three postulated for the 2010-11 expansion will be considered for another set of expansions in the 2012-13 season. An expansion of two more teams is expected for 2012-13. A second Mumbai or Delhi team has also been proposed for future expansion of two teams to take place in the 2012-13 season.[22] The Delhi team could be localized to Gurgaon, Faridabad, NOIDA or Greater NOIDA or could be more likely combined to create an alternative Delhi team. A Mumbai team could represent Navi Mumbai or Pune.

However, a number of issues with the expansions exist. While Indian cricket is immensely popular and new franchises will likely obtain an owner and a moderate fan base, there is a fear that the new franchise would not be able to integrate well into the tournament as most star players in the cricket world would already be involved with their existing franchises. There is also a fear of diluting the talent in all the teams and hence making each team less appealing to the audience (although this is not likely to occur, given that most overseas players currently signed in the IPL, which includes no England national players, do not play due to the 4-player limit on overseas players in a match squad). Regardless, the expansions are likely to make it longer before the IPL is fully integrated into the national and international psyche in the way the English Premier League or American franchise-based competitions are.

[edit] Revenue and Profits

The Indian Government earned Rs 91 crore as tax revenue from the 1st season of the IPL. [23]

[edit] Franchise Earnings

The first season that concluded on 1 June 2008 was a huge success for the IPL. It should be noted that during the first season no one had expected the franchises to break even since most of them had paid huge amounts to buy the clubs, but the table below shows that some of them are already profitable from Season 1.[24]
Franchise     Revenues     Expenses     Profit/Loss (Rupees Crores)
Mumbai Indians

a. Broadcasting Rights – 35
b. Team Sponsors – 20
c. Gate Receipts – 14
Total Revenues(a+b+c) – 69

a. Franchise Fees – 45
b. Team Expenses – 20
c. Advertising & Admin – 20
Total Expenses(a+b+c) – 85

Net Loss – -16
Royal Challengers Bangalore     

a. Broadcasting Rights – 35
b. Team Sponsors – 0
c. Gate Receipts – 10
Total Revenues(a+b+c) – 45

a. Franchise Fees – 48
b. Team Expenses – 22
c. Advertising/Admin – 18
Total Expenses(a+b+c) – 88

Net Loss – -43
Deccan Chargers

a. Broadcasting Rights – 35
b. Team Sponsors – 17 ;
c. Gate Receipts – 12
Total Revenues(a+b+c) – 64

a. Franchise Fees – 45
b. Team Expenses – 24
c. Advertising/Admin – 13
Total Expenses(a+b+c) – 82

Net Loss – -18
Chennai Super Kings     

a. Broadcasting Rights – 35
b. Team Sponsors – 25
c. Gate Receipts – 12.8
Total Revenues(a+b+c) – 72.8

a. Franchise Fees – 36
b. Team Expenses – 24
c. Advertising/Admin – 13
Total Expenses(a+b+c) – 73

Net Loss – -0.2
Delhi Daredevils     

a. Broadcasting Rights – 35
b. Team Sponsors – 20
c. Gate Receipts – 15.4
Total Revenues(a+b+c) – 70.4

a. Franchise Fees – 34
b. Team Expenses – 23
c. Advertising/Admin – 20
Total Expenses(a+b+c) – 77

Net Loss – -6.6
Kings XI Punjab

a. Broadcasting Rights – 35
b. Team Sponsors – 22
c. Gate Receipts – 9
Total Revenues(a+b+c) – 66

a. Franchise Fees – 30.4
b. Team Expenses – 25
c. Advertising/Admin – 13
Total Expenses(a+b+c) – 68.4

Net Loss – -2.4
Kolkata Knight Riders

a. Broadcasting Rights – 35
b. Team Sponsors – 34
c. Gate Receipts – 20
Total Revenues(a+b+c) – 89

a. Franchise Fees – 31
b. Team Expenses – 25
c. Advertising/Admin – 20
Total Expenses(a+b+c) – 76

Net Profit – +13
Rajasthan Royals     

a. Broadcasting Rights – 35
b. Team Sponsors – 16
c. Gate Receipts – 8
Total Revenues(a+b+c) – 59

a. Franchise Fees – 27
b. Team Expenses – 13
c. Advertising/Admin – 13
Total Expenses(a+b+c) – 53

Net Profit – +6

* All Figures are in Indian Rupees crores (1 crore = 10,000,000 Rupees = 201,176 United States Dollars = 152,444 Euro on June 1, 2008 [25])

[edit] Player signings
Main articles: Royal Challengers Bangalore, Chennai Super Kings, Delhi Daredevils, Deccan Chargers, Kolkata Knight Riders, Kings XI Punjab, Mumbai Indians, and Rajasthan Royals

The first players’ auctions were held on 20 February 2008. The IPL placed icon status on a select few marquee Indian players. These players were Rahul Dravid, Saurav Ganguly, Sachin Tendulkar, Yuvraj Singh, and Virender Sehwag. VVS Laxman initially named an icon player, later voluntarily opted out of his icon status to give his team (Deccan Chargers) more money to bid for players.[26] For the second season, auctions were also held, but free signings taking place in the off-season by franchises led to calls for a draft-like system where the lowest ranked teams would be given a first opportunity to sign players.

[edit] Winners
Year     Winner     Runner Up
2008     Rajasthan Royals     Chennai Super Kings

[edit] Controversies

The BCCI had found itself in the middle of many conflicts with various cricket boards around the world as a result of the IPL. The main point of contention was that signed players should always be available to their country for international tours, even if it overlaps with the IPL season. To address this, the BCCI officially requested that the ICC institute a time period in the International Future Tours Program solely for the IPL season. This request was not granted at a subsequent meeting held by the ICC. [27]

[edit] Conflicts with the England and Wales Cricket Board

Because the inaugural IPL season coincided with the County Championship season as well as New Zealand’s tour of England, the ECB and county cricket clubs raised their concerns to the BCCI over players. The ECB made it abundantly clear that they would not sign No Objection Certificates for players—a prerequisite for playing in the IPL. Chairmen of the county clubs also made it clear that players contracted to them were required to fulfill their commitment to their county. As a result of this, Dimitri Mascarenhas was the only English player to have signed with the IPL for the 2008 season.[28]

A result of the ECB’s concerns about players joining the IPL, was a proposed radical response of creating their own Twenty20 tournament that would be similar in structure to the IPL. The league — titled the English Premier League — would feature 21 teams in three groups of seven and would occur towards the end of the summer season. [29] The ECB enlisted the aid of Texas billionaire Allen Stanford to launch the proposed league.[30] Stanford was the brains behind the successful Stanford 20/20, a tournament that has run twice in the West Indies. On February 17, 2009, when news of the fraud investigation against Stanford became public, the ECB and WICB withdrew from talks with Stanford on sponsorship.[31][32] On February 20 the ECB announced it has severed its ties with Stanford and cancelled all contracts with him.[33]

[edit] Conflicts with Cricket Australia

The BCCI also experienced run-ins with Cricket Australia (CA) over player availability for Australia’s tour of the West Indies and CA’s desire for global protection of their sponsors. CA had feared that sponsors of the IPL (and its teams) that directly competed with their sponsors would jeopardize already existing arrangements. This issue was eventually resolved [34] and it was also agreed upon that Australian players would be fully available for the West Indies tour.

[edit] Conflicts with the Pakistan Cricket Board

Many players from the Pakistan Cricket Team who were not offered renewed central contracts (or decided to reject new contracts) decided to join the rival Indian Cricket League(ICL). Two such players—Naved-ul-Hasan and Mushtaq Ahmed also held contracts with English Counties. The PCB decided to issue No Objection Certificates for these players to play with their county teams on the basis that since they were no longer contracted to the PCB, there was no point in not granting them their NOCs. The latter did not sit well with the BCCI, as it went against the hard line stance they had taken on players who joined the ICL.

[edit] Conflicts with other Boards

Smaller boards like the WICB and NZCB have raised concerns over the impact the IPL will have on their player development and already fragile financial situation. Since players from smaller cricketing nations are not compensated as much, they have more motivation to join the IPL.

[edit] Media restrictions

Initially the IPL enforced strict guidelines to media covering Premier League matches, consistent with their desire to use the same model sports leagues in North America use in regards to media coverage. Notable guidelines imposed included the restriction to use images taken during the event unless purchased from cricket.com, owned by Live Current Media Inc (who won the rights to such images) and the prohibition of live coverage from the cricket grounds. Media agencies also had to agree to upload all images taken at IPL matches to the official website. This was deemed unacceptable by print media around the world. Upon the threat of boycott, the IPL eased up on several of the restrictions.[35] On 15 April 2008 a revised set of guidelines offering major concessions to the print media and agencies was issued by the IPL and accepted by the Indian Newspaper Society.[36]

Even with the amended restrictions, specialist cricket websites such as cricinfo and cricket365 continued to be banned from providing live coverage from the grounds and from purchasing match images from press agencies. As a result, on 18 April several major international agencies including Reuters and AFP announced their decision to provide no coverage of the IPL.[37]

[edit] Conflict with Cricket Club of India

As per IPL rules, the winner of the previous competition decides the venue for the finals.[38] In 2009, the reigning Champions, Rajasthan Royals chose the Brabourne Stadium in Mumbai.[39] However, a dispute regarding use of the pavilion meant that no IPL matches could be held there. The members of the Cricket Club of India that owns the stadium have the sole right to the pavilion on match days, whereas the IPL required the pavilion for its sponsors.[40] The members were offered free seats in the stands, however the club rejected the offer, stating that members could not be moved out of the pavilion. [41][42][43]

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