Women’s IPL to make BCCI richer by Rs 4000 crore: Report | cricket news

The BCCI is all set to be at least Rs 4000 crore richer with some top business houses bidding aggressively for the five Women’s IPL (WIPL) teams that will be auctioned on Wednesday. According to market experts, the teams are expected to shell out in the range of “INR 500 to 600 crore” per team in the closed-bid auction. “WIPL has huge potential but most legacy teams want to mix optimism with realism,” an industry insider, who previously worked on the men’s IPL team bid, told PTI ahead of the auction.

“Expect some bids above Rs 500 crore. Rs 800 crore plus may be a bit ambitious but BCCI won’t complain,” he added.

More than 30 companies bought bid documents worth Rs 5 lakh including 10 men’s IPL teams. Well-known corporate houses like Adani Group, Torrent Group, Haldiramer Prabhuji, Capri Global, Kotak and Aditya Birla Group have also shown interest in buying a team.

Some of these companies failed when the BCCI invited bids for two new men’s teams in 2021.

Among the traditional IPL teams, Mumbai Indians, Rajasthan Royals, Delhi Capitals, KKR could seriously consider adding to their already existing bouquet of men’s teams across the globe.

According to market insiders, there are two principles on which these bids are placed by trading firms.

The first is “Return on Investment” (ROI), which is the key principal of any business. It is profit on what an entity spends.

The second is not a business principle as such, but in the business community they call it the “return of pride”.

This is something where some big business names are ready to shell out any amount of money if they have their eyes on buying a particular property. Even if it takes five to seven years to touch the breakeven point.

It’s about wanting to buy something at any price an existing IPL franchise with its “steady revenue stream” can “bleed” a bit more in the early years which is essential.

A former IPL franchise official, who once worked on the bids, explained the rationale behind the bidding.

“Let’s say, a franchisee makes a winning bid of Rs 500 crore for five years. Now it has directly committed Rs 100 crore for each of the next five years,” explained the source.

Now what will be the source of income of franchisees? “BCCI distributes its media broadcast revenue which is a major revenue segment. Second is a segment of BCCI’s central sponsorship. Third is a franchise’s own set of sponsorship revenue. Fourth is money earned from gate sales, tickets,” he elaborated.

So what could be the franchisee’s earnings from WIPL’s media revenue pool.

“For the women’s IPL BCCI will share 80 per cent media rights money with the teams (for men, it’s 50:50) to help them build a sustainable model.

“So what’s the math here? JIO fetches media rights of Rs 950 crore (approx) for five years which is about Rs 190 crore per year. So 80 percent of 190 crore is Rs 152 crore.

“Let’s round it to Rs 150 crore. That’s what each franchisee gets over five years which is about Rs 30 crore a year,” he explained.

“Now BCCI will also distribute a portion of its central sponsorship (title sponsor, co-sponsor, various award sponsors) with the franchise. Add to this the franchise’s own revenue pool. So it could be between Rs. 15 to 18 crore. Per year. Gate sales in the first year. Won’t earn you much,” he said.

So the revenue of a team is expected to be Rs 50 crore per year.

Now apart from the franchise fee of Rs 100 crore per annum what will be the remaining cost.

“There is a salary cap of Rs 12 crore for the squad. Add another Rs 6 to 8 crore to support staff salaries. Let’s make it Rs 20 crore. Add hotel expenses, fees paid to state associations for stadiums and other operational expenses. It’s Rs 6 to 8 crore. could be between Rs.In the first year a single city will reduce the cost.

“So the incremental expenditure per year could be Rs 128 to 130 crore. The revenue would be around Rs 50 crore. So there is a possibility of a loss of Rs 50 crore or more in the first few years,” he explained. .

This is where it gets caught.

“Legacy franchises (MIPL) are better placed to make up these losses as they are already making profits after 15 years of IPL. They will club their men’s and women’s teams together and likely create faster profit zones,” the official added.

The five-team WIPL will be held in March across several venues in Mumbai.

(Except for the headline, this story was not edited by NDTV staff and appeared on a syndicated feed.)

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