Women's IPL 2023: BCCI all set to get richer by INR 4,000 crore with 5 new teams
Women's IPL 2023 is all set to get underway in a couple of months. Meanwhile, the BCCI would also be getting richer by ₹4,000 crore with the influx of the five teams set to compete in the tournament.
The Board of Control for Cricket in India (BCCI) is set to get richer by at least ₹4,000 crore, with some of the top business houses set to bid aggressively for the five Women's Indian Premier League (WIPL) teams that would be auctioned on Wednesday. According to market experts, the teams are expected to shell out in the "range of ₹500 to ₹600 crore" per team in the closed-bid auction.
"WIPL has huge potential, but most legacy teams would like to mix optimism with pragmatism. Expect a few bids in the range of ₹500 crore upwards. ₹800 crore plus could be a bit ambitious, but BCCI won't complain," he added. More than 30 odd companies have bought the bid documents worth ₹5 lakh, including all ten men's IPL teams. Well-known corporate houses such as Adani group, Torrent group, Haldiram's Prabhuji, Capri Global, Kotak and Aditya Birla Group have also shown interest in buying a team.
Some companies were unsuccessful when BCCI invited bids for two new men's teams in 2021. Among the traditional IPL teams, Mumbai Indians (MI), Rajasthan Royals (RR), Delhi Capitals (DC), and Kolkata Knight Riders (KKR) could seriously contemplate adding to the bouquet of their already existing men's teams across the globe.
According to market insiders, there are two principles on which these bids are placed by the business houses. The first one is "Return on Investment" (ROI), which is the core principle of any business. It is profit on what an entity spends. The second one isn't a business principle, but the business community calls it the "Return of Ego".
It is something where some of the biggest business names are ready to shell out any amount 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 purchase something at any cost. An existing IPL franchise with its "steady revenue stream" can afford to "bleed" a bit more in the initial years, which is imperative.
A former IPL franchisee official, who had once worked on bids, explained the rationale for the bidding. "Let's say a franchise makes a winning bid of ₹500 crore for five years. Now that's ₹100 crore committed straightaway for each of the next five years," the source explained. Now, what will be the source of earnings for the franchises?
"The BCCI distributes its media broadcast revenue, one of the major earning chunks. The second is a share from BCCI's central pool of sponsorship. The third is a franchisee's own set of sponsorship earnings. Fourth is gate sales, money earned from tickets," the IPL official elaborated. So, what could a franchisee earn from WIPL's media revenue pool?
"The BCCI, in the case of Women's IPL, is going to share 80 per cent of media rights money with the teams [in the case of men, it's 50:50] to help them develop a sustainable model. So, what will be the mathematics over here? JIO has brought media rights for five years at ₹950 crore [approx], roughly ₹190 crore per year. So, 80 per cent of ₹190 crore is ₹152 crore. Let's make it a round figure of ₹150 crore. That's what each franchise gets over five years, approximately ₹30 crore per annum," he explained.
"Now BCCI will distribute a chunk of its central sponsorship pool [title sponsor, co-sponsors, various award sponsors] with the franchise. Add to it the franchisee's revenue pool also. So, it could be between ₹15 to ₹18 crore per year. Gate sales won't earn you a great deal in the first year," he said.
So, the per year earnings for a team are expected to be ₹50 crore. Now, apart from ₹100 crore franchisee fee per year, what will be the other expenses? "There is a salary cap of ₹12 crore for the squad. Add another ₹6 to ₹8 crore to support staff's salary. Let's make it ₹20 crore. Add the hotel expenses, fees paid to state associations for the stadium and other operational costs," he continued.
"It could be anything between ₹6 to ₹8 crore. The single first-year city would reduce expenses. So, the cumulative yearly expenses could be ₹128 to ₹130 crore. The earnings would be around ₹50 crore. So there is a chance during the first few years, there would be a loss of Rs 50 crore or more," he explained.
Herein lies the catch. "The legacy franchises [MIPL] are better placed to offset 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 perhaps quickly make the profit zone," the official added. The five-team WIPL will be played in March in Mumbai at a couple of venues.
(With inputs from PTI)