Commercial Success of the Indian Premier League (IPL)

The Indian Premier League (IPL) (currently known

as the Pepsi Indian Premier League for sponsorship
reasons)
is
an
annual
Indian Twenty20
cricket tournament, founded in 2008 by the BCCI. It
consists of a number of teams (currently 8) which are
named after Indian cities and owned by franchises and
is held in India, between April and June.
The IPL is the most-watched Twenty20 league in the
world and is also known for its commercial success. In
2010, the IPL became the first sporting event to be
broadcast live on YouTube. The brand value of
the 2014 Indian Premier League was estimated to be
around US$7.2 billion.
The IPL is currently supervised by BCCI Vice-President
Mr. Ranjib Biswal, who serves as the League's
chairman and Commissioner. Mr. Sundar Raman has
been the IPL chief operating officer (COO) since its first
season, after he was appointed by the former IPL
Commissioner Mr. Lalit Modi in 2008.
Of the 11 teams to have competed since its inception,
five have won the title: Kolkata Knight Riders (2
times), Chennai
Super
Kings (2), Rajasthan
Royals (1), Deccan
Chargers (1),
and Mumbai
Indians (1). Chennai Super Kings are the most
successful team so far, having won the title twice and
have managed to qualify for the finals in every season
except in 2009 and 2014.
The IPL was inaugurated in 2008, in the middle of the
period during which the Indian Cricket League was
operational. Until 2012, the Indian Premier League was
sponsored by DLF after they paid $50 million for a fiveyear sponsorship of the competition. Pepsi took over
the contract for the 2013 IPL season after paying close
to $72 million for the 5-year contract. In 2008, Sony
paid $1 billion for the broadcasting rights over a tenyear period. The IPL is watched globally, and in 2010
made history by becoming the first sporting event to
be broadcast live on YouTube.
The winning bidders for the eight franchises (or clubs)
were announced on 24 January 2008. While the total
base price for auction was US$400 million, the auction
fetched US$723.59 million. Chennai Super Kings, Delhi
Daredevils, Kings XI Punjab, Kolkata Knight Riders,
Mumbai Indians, Rajasthan Royals, Royal Challengers
Bangalore and Deccan Chargers were the founding
clubs of the new professional league.
IPL games utilize television timeouts, hence there is no
time limit for teams to complete their innings.
However, there may be a penalty if the umpires find
teams misusing this privilege at their own choice.
Additionally, each team is given a two-and-a-halfminute "strategic timeout" during each innings; the
bowling team between the 6th to 10th overs, and the
batting team between the 11th to 16th overs must
take one.
The total spending cap for a franchise in the first
player auction was US$5 million. Under-22 players are
to be remunerated with a minimum annual salary of
US$20,000 while for others it is US$50,000.
India's biggest property developer DLF Group paid Rs.
2.50 billion (around US$50 million) to be the main
sponsor of the tournament for 5 years from 2008 to
2012. From 2013 season, the American food and
beverage company PepsiCo took over title sponsorship

Questions

for

five years valued at Rs 396.8 million, and also

exclusive beverage supplier for the IPL teams in the
2013 season.
The IPL is expected to bring the BCCI an income of
approximately US$1.6 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
franchises and 6% as prize money. The money will be
distributed in these proportions until 2017, after which
the share of IPL will be 50%, franchises 45% and prize
money 5%. The IPL signed up Kingfisher Airlines as the
official umpire partner for the series in a Rs 1.06
billion (US$17 million) (approximately 15 million)
deal. This deal sees the McDowells No.1 brand on all
umpires' uniforms and also on the giant screens
during third umpire decisions.
Other sponsorships include, a deal with Hero
MotoCorp worth $22.5 million, with PepsiCo worth
$12.5 million, and a deal with Kingfisher at $26.5
million.
On 17 January 2008 it was announced that a
consortium consisting of India's Sony Entertainment
Television
(Set
Max) network
and
Singaporebased World Sport Group secured the global
broadcasting rights of the Indian Premier League. The
record deal has 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. The initial plan was for 20% of
these proceeds would go to IPL, 8% as prize money
and 72% would be distributed to the franchisees from
2008 until 2012, after which the IPL would go public
and list its shares. However, in March 2010, IPL
decided not to go public and list its shares. Sony-WSG
then re-sold parts of the broadcasting rights
geographically to other companies.
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. In
2010, the contract was abolished and the BCCI decided
to run the IPL Digital properties in-house. The official
website
of
the
tournament
is www.iplt20.com.
Incorporating popular forms of social media, the
website now contains a more holistic presence across
all online mediums to empower user interaction.
With the popularity of IPL increasing at a greater rate,
more and more audiences, players and sponsors are
getting attracted to the commercial success of the
newly formed cricket tournament of the T20s.

1. How successful is Pepsi IPL in terms of becoming a major Branded Event?

2. How does Sponsorship in Sports able to create Brand Awareness for the Sponsors?
3. Do you think that such kind of multi glamorous expensive event contributes to the welfare of
the Sport and the Sector? Why or why not, discuss the issue.