All 8 teams make moolah this year *Prabhakar Sinha | TNN
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* If the IPL has turned all you thought you knew about cricket on its
head, its done the same with finances too. In a year when franchisees were
complaining that shifting to South Africa would make a mess of their
budgets, every single one of them will end up with a profit.
If that’s not strange, try this: the two finalists, Royal Challengers
and Team Hyderabad, will make a fraction of the profits that bottom-of-table
Knight Riders will even if you take prize money into account.
The main reason behind the healthier bottomlines is a huge jump in the
share of revenues from broadcasting. Last year, each franchisee got Rs 25
crore from IPL as its slice from the central broadcasting revenue pie. This
year, that has more than doubled to Rs 67.50 crore each.
The franchisees won’t be the only ones partying. The BCCI’s profit too,
according to one estimate, jumped substantially to Rs 477 crore from Rs 350
crore last year. For good measure, broadcaster Sony Max is also likely to be
in the black this year.
Had the matches been in India, it’s likely the profits of the teams
would have been more because of higher receipts from ticket and merchandise
sales, which have averaged Rs 8 crore and Rs 50 lakh respectively in South
Africa. *Team Jaipur makes most profit
* All eight IPL franchisees, which were complaining about shifting of the
matches to South Africa, will make profit this year due to a huge jump in
the share of revenues from broadcasting. And if the matches were played in
India, profit should have been high because of higher receipts from ticket
sale. In 2008, teams like Knight Riders, Mumbai Indians and Team Delhi
earned around Rs 20 crore from ticket sales alone as the capacity of their
home stadiums was large enough to accommodate over 70,000 and the crowds
just poured in.
According to a report by equity research firm IIFL, Team Jaipur will
make the highest profit of Rs 35.1 crore in the group matches of the second
edition of the tournament. Jaipur had made the second highest profit of Rs
14.5 crore in 2008, including the Rs 4.5 crore ($1 million) prize money.
Knight Riders, which finished at the bottom in the league table in South
Africa, will nevertheless end up with the third highest profit of Rs 25.8
crore in IPL 2. Team Mohali, which also did not make it to the semis, will
just beat Kolkata to second spot with a profit of Rs 26.1 crore, according
to the report. In fact, the only semifinalist which also stands to make over
Rs 20 crore in profits is Delhi. This is despite the fact that prize money
in the IPL is a sizeable amount, with Rs 4.8 crore for the winner, Rs 2.4
crore for the runners-up and 1.2 crore each for the losing semi-finalists.
For those who didn’t get past the league stage, the sums are smaller—Rs 80
lakh for the team that finished fifth (Mohali), Rs 70 lakh for the
sixth-placed (Jaipur), Rs 50 lakh for the seventh (Mumbai Indians) and Rs 40
lakh for the lowest one.
The healthy bottomlines are a happy change from last year when besides
Knight Riders and Jaipur, Team Chennai just scraped into the black due to
its Rs 2.25 crore prize money for the runners-up position, said a top IPL
source. What helped IPL and franchisees is essentially the reawarding of the
broadcasting rights. TV rights were sold to WSG Sony last year for $918
million (Rs 4,200 crore at the then exchange rate) for 10 years. The
broadcasting fees had to be paid in instalments—Rs 280 crore each year for
the first five years and Rs 540 crore per year for the next five.
However, following differences on the inclusion of Big DTH as a partner
to show the matches, the BCCI decided to terminate the contract. The
renegotiated contract was for $1.64 billion (Rs 8,200 crore) for nine
years—a jump of 90% from the original figure. According to the new formula,
Sony has to pay Rs 670 crore per year for the first four years and Rs 1,100
crore per year for the next five years.
Sony, you might think, must be bleeding with such a massive jump in the
fees it has to pay. Not true. With the IPL now a proven commercial success,
Sony was able to hike its tariff from the Rs 2-3 lakh per 10-second slot it
charged last year to Rs 4-5 lakh per 10 second in the second edition. *
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Nothing ventured, nothing gained. And venture belongs to the adventurous.
GAJ.
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