IPL 2024 Most Expensive Players; What Is IPL’s Business Model And How Does It Compare To Other Global Leagues
The recently concluded IPL 2024 auction witnessed a mini-auction that shattered previous records, with Mitchell Starc becoming the most expensive player in the league's history. As the cricketing world marvels at the staggering sums spent on star players, we look into the IPL's business model and how it stands in comparison to other sports leagues globally.
IPL 2024, Record-Breaking Auction And Most Expensive Players
In the IPL 2024 mini-auction, records were shattered as franchises splurged significant amounts to secure top-tier players.
Mitchell Starc emerged as the costliest player in the league’s history after Kolkata Knight Riders snagged the left-arm quick for a staggering Rs 24.75 crore. The historic moment was marked by a tweet from the official IPL handle, breaking the news of Starc’s unprecedented deal.
Notably, Starc, with a base price of Rs 2 crore, reenters the IPL scene after his last appearance in 2015, having been a crucial part of Australia’s victorious World Cup 2023 ODI team.
Meanwhile, the previous record-holder, Sam Curran, was sold to Punjab Kings in the 2023 IPL auction for Rs 18.50 crore.
Joining the league of high earners were other international players, with Daryl Mitchell from New Zealand securing a Rs 14 crore deal with Chennai Super Kings, making him the third-highest paid player in the auction.
West Indies’ Rovman Powell went to Rajasthan Royals for Rs 7.40 crore, and Travis Head of Australia will play alongside Cummins for Hyderabad after being sold for Rs 6.8 crore.
Notably, Alzarri Joseph from the West Indies was acquired by Royal Challengers Bangalore for Rs 11.50 crore. On the contrary, New Zealand all-rounder Rachin Ravindra, despite his stellar performance in the ODI World Cup, received limited interest, eventually being signed by Chennai Super Kings for Rs 1.8 crore.
Australian speedster Spencer Johnson made waves as Gujarat Titans secured him for a significant sum of Rs 10 crore.
Among the Indian players, notable deals included pacer Harshal Patel’s acquisition by Punjab Kings for Rs 11.75 crore, while uncapped players like Shubham Dubey and Shivam Mavi also clinched lucrative deals.
Expensive Players List (Rs 10 crore and above) – IPL 2024
- Mitchell Starc – Kolkata Knight Riders – Rs 24.75 Crore
- Pat Cummins – Sunrisers Hyderabad – Rs 20.50 Crore
- Daryl Mitchell – Chennai Super Kings – Rs 14 Crore
- Harshal Patel – Punjab Kings – Rs 11.75 Crore
- Alzarri Joseph – Royal Challengers Bangalore – Rs 11.50 Crore
- Spencer Johnson – Gujarat Titans – Rs 10 Crore
Expensive Players List (Rs 5 crore to Rs 10 crore) – IPL 2024
- Sameer Rizvi – Chennai Super Kings – Rs 8.40 Crore
- Rilee Rossouw – Punjab Kings – Rs 8 Crore
- Rovman Powell – Rajasthan Royals – Rs 7.40 Crore
- Shahrukh Khan – Gujarat Titans – Rs 7.40 Crore
- Kumar Kushagra – Delhi Capitals – Rs 7.2 Crore
- Travis Head – Sunrisers Hyderabad – Rs 6.80 Crore
- Shivam Mavi – Lucknow Super Giants – Rs 6.40 Crore
- Umesh Yadav – Gujarat Titans – Rs 5.8 Crore
- Shubham Dubey – Rajasthan RRajasthan Royals – Rs 5.80 crore
- Gerald Coetzee – Mumbai Indians – Rs 5 Crore
- Yash Dayal – Royal Challengers Bangalore – Rs 5 Crore
- Jhye Richardson – Delhi Capitals – Rs 5 Crore
- Yash Dayal – Royal Challengers Bangalore – Rs 5 Crore
IPL’s Global Dominance
The IPL stands as the second-most valuable sports league globally, following the National Football League (NFL); it also holds the title of being the second-costliest sporting league worldwide after the NFL.
DailyExcelsior notes that the IPL has surpassed other major leagues such as the English Premier League (EPL), Major League Baseball (MLB), and the National Basketball Association (NBA).
In terms of average audience per match, the Indian Super League (ISL) ranks fifth among football leagues worldwide, recording a peak of 130 million viewers in 2021.
The IPL Business Model
India, as the second most populated country globally, exhibits an unparalleled passion for cricket.
In 2023, a staggering 130 million people tuned in to watch the IPL online, emphasizing its colossal popularity; have you ever wondered about the financial intricacies behind the IPL phenomenon?
The IPL boasts a nuanced business model that seamlessly integrates cricket, entertainment, and revenue generation, and nine primary revenue sources collectively form the backbone of the IPL’s financial ecosystem.
1. Team Ownership
Franchise owners acquire the rights to own and operate teams, investing substantial amounts in team management, player acquisition, and marketing.
Notably, the Mumbai Indians lead the valuation charts at $1.3 billion, while the Royal Challengers Bangalore stand as the third-richest franchise with a net worth of Rs 697 crore as of 2022
2. Player Auction
Preceding each IPL season, a dynamic player auction unfolds, where teams competitively bid to secure players, creating an environment of fierce competition as teams endeavour to build the most formidable squad. Players, in turn, earn salaries from their respective teams.
3. Broadcasting Rights
Live coverage of IPL matches generates substantial revenue through global broadcast rights, amounting to over a billion dollars.
Broadcasters can further capitalize by reselling portions of these rights to other territories, with a significant share of the revenue flowing back to the franchisees; at the same time, television advertising during matches enhances this revenue stream.
4. Sponsorships
Crucial to the revenue streams of IPL franchises, sponsorship deals involve partnerships with various brands, including apparel companies, beverage manufacturers, and mobile phone brands.
These agreements infuse funds into franchise operations, aiding in covering their essential expenses.
5. Ticket Sales
Fan engagement extends to purchasing tickets for stadium attendance, contributing significantly to revenue, especially for matches held in expansive venues like the Narendra Modi Stadium in Ahmedabad.
6. Merchandise and Fan Engagement
Merchandise sales featuring team jerseys, caps, and accessories emerge as an additional revenue source for IPL franchises.
The soaring demand for IPL-related merchandise spotlights its popularity, allowing franchises to capitalize on this trend.
7. Advertising
The IPL opens avenues for advertising during matches, including commercial breaks and digital advertising, providing companies with opportunities to connect with vast and engaged audiences.
8. Franchise Fees
Teams contribute franchise fees annually, constituting a consistent revenue source for the IPL.
9. Digital Rights
Digital rights sales enable streaming platforms to broadcast matches online, catering to viewers who prefer digital platforms for IPL content consumption.
IPL in Comparison To Global Sporting Giant
The Indian Premier League (IPL) stands as a sporting phenomenon with a business model that seamlessly blends cricket, entertainment, and marketing.
Distinguishing itself from leagues like the English Premier League (EPL) and NBA, the IPL’s primary revenue source is media rights, deviating from the conventional reliance on ticket sales.
Additional revenue streams for the IPL include title sponsorships, merchandise sales, and franchise sales, setting it apart in the global sports landscape.
Here are key differentiators between the IPL and other major leagues
1. Sponsorships
The IPL boasts a remarkable edge in the sponsorship arena, surpassing even the EPL and NFL in terms of the number of sponsors.
2. Ticket Sales
Unlike the EPL and NFL, which significantly rely on revenue from ticket sales, the IPL’s business model places less emphasis on this particular income stream.
3. Revenue Distribution
The IPL follows a unique revenue-sharing model, distributing 50% of its earnings to the participating teams and retaining the remaining 50%; this approach diverges from the traditional models observed in other major leagues.
4. Franchise System
With ten teams representing various Indian cities, the IPL operates on a franchise system. These franchises, privately owned, participate in a revenue-sharing arrangement, contributing to the league’s distinct structure.
The High Media Rights
In 2023, the IPL sold its media rights for the period 2023–2027 to Viacom18 and Star Sports for a staggering US$6.4 billion.
This deal translates to a per-match valuation of $13.4 million, positioning the IPL as the second-costliest sporting league globally, trailing only the NFL.
Comparing per-game broadcast costs, the NFL leads the pack with a substantial $17 million, followed closely by the IPL at $13.4 million.
The EPL comes in next at $11 million, with Major League Baseball posting figures nearly identical.
BCCI Secretary Jay Shah highlighted that in the previous five-year cycle, a single IPL game generated $9 million in revenue.
Beyond TV and digital rights, the BCCI plans to elevate the IPL’s status further. While the league is relatively young, celebrating its 16th year, discussions include expanding the tournament to 84 or even 94 matches in the final two years of the upcoming 5-year cycle (2023–2027).
This potential expansion aligns with the IPL’s continual growth, marking a significant leap in the world of sports, especially when compared to the longstanding history of leagues like the NFL, EPL, and Major League Baseball.
As the IPL charts a path of unprecedented growth, its unique business model and strategic initiatives position it as a formidable force in the global sporting landscape.
Impact on Viewers, Balancing Profit And Accessibility
While the Board of Control for Cricket in India (BCCI) revels in its financial windfall, the potential downside for viewers looms large.
The prospect of additional IPL games may delight cricket enthusiasts, but there’s a genuine concern that they might have to dig deeper into their pockets.
The TV and digital companies, committing hefty amounts of Rs 57.5 crore per game and Rs 50 crore per IPL game for the upcoming five-year cycle, may inevitably pass on these costs to the consumers.
In the world of profit-driven dynamics, an increase in rates for TV channels and streaming platforms broadcasting live matches seems probable.
Viewers can anticipate an influx of commercials between overs, during matches, and heightened in-brand promotions; likewise, the cricket commentary might evolve into a promotional platform for various brands.
Yet, the question remains – will these efforts suffice to cover the escalating costs?
The practical feasibility seems uncertain, leaving another option on the table – elevating the rates of media platforms presenting the matches.
