INDIAN PREMIER LEAGUE(IPL) IN A ACCOUNTING PERSPECTIVE

SUMAT SINGHAL

INTRODUCTION

Indian Premier League

Countries :India, South Africa

Indian Premier League's origin is quite interesting.

Administrator: Board of Control for Cricket in India (BCCI)

ndia Format: Twenty20 :I I a Pais Official Website :iplt20.com e P : agu It: all whenofLalit Modi, the Vice President of the Le started Number teams: 8 L

IPL has been launched in response to the rebel Indian Cricket League (ICL) launched by Zee Group. n Chairman: Lalit Modi

Board of Cricket Control in India (BCCI) envisioned the Indian Premier League.

Tournament format : Double round-robin & Knockout

It is created alongIdea: the English lines of club League football Launch Premier & in Europe, specifically the English Premier League.National Basketball League

IPL (2008) First Season

Period : 18th April 1st June, 2008

Victory: Rajasthan Royals (1st title) V/s Chennai Super Kings (runner) Most runs: Shaun Marsh (616)
Most wickets: Sohail Tanvir (22)

Franchisees

RAJASTHAN ROYALS

Owner : Fraser Castellino (Emerging Media Group) CEO : Fraser Castellino Franchise fee : $ 67 million Captain : Shane Warne Stadium : Sawai Mansingh Stadium Coach : Shane Warne Colours : Blue and Gold

DELHI DAREDEVILS
Owner : G.M. Rao (GMR Holdings) Franchise fee : $ 84 million Coach : Gerg Shipperd Captain : Virender Sehwag Colours : Black and Red Stadium : Feroz Shah Kotla CEO : Yogesh Shetty Brand Ambassador : Akshay Kumar

MUMBAI INDIANS

Owner : Mukesh Ambani (Reliance Industries Limited) Franchise fee : $ 111.9 Million Ground : Wankhede stadium and DY Patil Stadium Coach : Lalchand Rajput Captain : Sachin Tendulkar Colours : Blue brand ambassador : Hrithik Roshan Director : R Balachandran

ROYAL CHALLENGERS BANGALORE

Owner : Dr Vijay Mally Company :UB group Franchise fee: $111.6 million CEO : Brijes Patel Captain : Rahul Dravid Stadium : M Chinnaswamy stadium Coach : Venkatesh Prasad Ambassadors : Deepika Padukone, Katrina Kaif, Ramya, Upendra COO : Martin Crowe Colours : Red,Golden yellow

CHENNAI SUPER KINGS

Owner : Mr.Srinivasan India Cements Ltd. Franchise fee: $ 91 million Ambassadors: Kris Srikanth And Vijay Coach: Kepler Wessels Stadium: MA Chidambaram Captain: Mahendra Singh Dhoni Colours: Yellow and Blue

DECCAN CHARGERS

Owner : Venkat Rama Reddy (Deccan Chronicle and M Group) Franchise fee : $107 million Coach : Robin Singh Captain : Adam Gilchrist CEO : J Krishnan Colours : Beige and Black Stadium : Rajiv Gandhi International Cricket Stadium

KINGS XI PUNJAB

Owners : Preity Zinta, Ness Wadia (Bombay Dyeing), Karan Paul (Apeejay Surendra Group) and Mohit Burman (Dabur) Captain : Yuvraj Singh Coach : Tom Moody Colors : Light grey and Red Franchisee: $76 million Stadium : PCA Stadium Ambassador : Daler Mehndi CEO : Neil Maxwell

KOLKATA KNIGHT RIDERS

Owner: Shahrukh Khan, Juhi Chawla, Jai Mehta

Franchise fee: $75.09 million CEO: Joy Bhattacharya Coach: John Buchanan Captain: Sourav Ganguly Colours: Black and Gold Stadium: Eden Gardens

HOW DOES IPL MAKE MONEY?

Auction of broadcasting rights.

Title sponsorship and corporate sponsorship. Sale of tickets (20% of tickets allocated to IPL). Auction of franchisees rights. Official Umpires sponsorships.

WHAT ARE THE SOURCES OF INCOME FOR AN IPL FRANCHISEE (ROI)?

Share in revenue from broadcast rights (equal share for all franchisee after IPLs share). Share in sponsorship money (60% of the amount distributed equally). Share in revenue from sale of tickets. Revenue from in-stadium advertising. Sale of players to other franchisees. Revenue from own sponsorship and corporate sponsorship.

HOW IS THE IPL INCOME DISTRIBUTED?

Share of broadcasting money with franchisees.

Share of sponsorship money with franchisees.

Share of ticket money with franchisees.

Inauguration expenses. Prize money: $5 million ($3 million for winner; $2 million divided among others).

HOW IS THE FRANCHISEE INCOME DISTRIBUTED?

Franchisee fees 10% of total franchisee costs every year to IPL. Players cost (Each franchise have paid around $4-6 million per year). Match fees and Inauguration expenses. Rent of stadium (expense of around Rs.2.5mn per match). Marketing and promotional cost (around $3-4mn per team). Fee for coaches, physiotherapists and other members. Administrative cost.

 Expenses

Summary

(For Franchisee)

Team & Financial Cost (Cost of Acquisition) Payments to Players & Others (Match Fess) Inaugural & Marketing Expenses Promotional expenses Cost of travelling& accommodation Cost of Office & support staff Team management Coach Training & Preparation Insurance Ground Expenses Floodlights

Franchise Fees:

The franchisees fees is payable to IPL in 10 Equal Installments within 10 years Ex. RoyalChallengersBangalore (RCB) cost around 111.6 Million Dollars RCB have to pay IPL = $111.6 Million 10 years = $ 11.16 Million p.a

Players Cost

Before commencement of IPL, players are purchased by individual franchisees Players have 3 years contract with franchisees but even with end of first year they can be traded between franchisees which would be subject to Capital Gains Ex. ZaheerKhan from Bangalore Royal Challengers to Mumbai Indians

Match Fees

Fees Payable to players per match other than Lump sum amount paid for acquisition Fees payable to coaches & supporting staff

Thank you for attending

Please feel free to contact us on at SUMAT foundation: by SUMAT SINGHAL

38

POWERED BY : sumat foundation