Ipl - Strenght and Weakness

Topics: Indian Premier League, Twenty20, Board of Control for Cricket in India Pages: 5 (1789 words) Published: December 21, 2010
The bidding process for the eight franchises that will compete in the Indian Premier League has officially begun with the release of the prospectus for the inaugural Twenty20 competition beginning in April 2008. The tender inviting bids for the franchises will be announced sometime in December. Potential franchisees can submit bids for more than one city-team and must state the total fee they are offering for a franchise for the first ten-year term. The auction of players will immediately follow the awarding of the franchises. The prospectus also laid out the manner in which the IPL's revenue would be shared with the franchises. The franchises will receive 80% of the television revenue over the first two years, 70% in the third and fourth years, 60% between years five and ten, and 50% from the 11th year onwards. In addition, they will also receive 60% of the sponsorship revenue during the first ten years, after which they will receive 50%. Of the total amount to be distributed, 20% will be divided based on the final league positions of the franchises while the other 80% will be shared squally. The IPL's distribution model, which is based on their current forecasts for the first contracts for centralized television and sponsorship agreements, should be adjusted should the forecasts change. The competition comprises 59 matches and spans 44 days with each franchise playing the other on a home and away basis. The top four teams qualify for the semi-finals, the winners of which will contest the final. The two finalists will in turn qualify for the Champions Twenty20 tournament, which has been provisionally scheduled for October 2008. Each franchise's squad will have a minimum of 16 players and no more than four international players, drawn from the pool of contracted players, may play in a particular match. Four Under-21 players and four players from the franchise's catchment area must also be part of the squad, though these can be the same players.

Our first round-up of the IPL's finances shows the league generated $209 million in revenue in its second season, for an aggregate operating profit (earnings before interest, taxes and depreciation) of $89 million. The average franchise is worth $67 million, a 31% increase in just one year. The Rajasthan Royals, winners of the league's first championship, has risen in value by 71%. This despite the uncertainty and logistical headaches caused by moving this year's entire 59-game slate, including the final, to South Africa with only three weeks' notice. (After terror incidents, the Indian government was anxious about providing security as parliamentary elections coincided with the month-long season.) The IPL was conceived in 2007 near some hallowed ground for sports: in London's Wimbledon suburb. There, Lalit Modi, representing the Board of Control for Cricket in India (BCCI), the governing body of Indian cricket, and Andrew Wildblood, an executive at sports management powerhouse IMG, discussed the disconnect between cricket's worldwide popularity and the lack of commercial success of any domestic league. Their solution: a franchise ownership structure modeled after top U.S. sports leagues. Since then, the league has grown at breakneck speed.

In January 2008, eight IPL teams were auctioned for a combined $724 million (to be paid in 10 annual installments to the nonprofit BCCI, an umbrella for the IPL). Just three months later, the Redskins' "First Ladies of Football" were flown in to shake their pom-poms at the sold-out opener. Proceeds from the auction, as well as portions of national media and sponsorship deals, are reinvested, mostly in India's aging (as far back as the 19th century) cricket stadiums, including some of the 10 rented by IPL teams for $100,000 per match. How successful was that first season? The 2008 semifinals and final drew 62 million viewers in India, with a per-match average of 11% of the nation's total cable audience. In the months that followed,...
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