The Indian Premier League (IPL) is arguably the biggest cricket tournament in the world in terms of various factors like the quality of cricket, worldwide fan engagement, and the money factor. Star players from around the globe take part in the exciting league and get million-dollar deals that they fail to grasp in other T20 competitions.
The franchises, which spend a heavy amount on players, are also valued quite high and are among the most valued sports teams in the world. With the cash-rich league is now gearing up to add two new teams before the start of the 2022 edition, a big arrival of money is set to take place in the competition.
Currently, the franchises like Chennai Super Kings (CSK), Royal Challengers Bangalore (RCB), Mumbai Indians (MI), and Kolkata Knight Riders (KKR) are considered to be the richest teams and are valued really high. But the question that arises is how would a new franchise be valued?
According to a report in Cricbuzz, the Virat Kohli-led Royals are presently valued at INR 1855 crore, while the Super Kings have a valuation of INR 2200 to 2300 crore. On the other hand, Mumbai Indians are valued at INR 2700 crore to 2800 crore.
When it comes to the new franchise, INR 18500 crore could be the base price of it, while the final cost could be in the bracket between INR 22000 crore to INR 29000 crore.
“We always knew that the new teams would be upwards of USD 300-400 million. Look, we are talking of RR, which is not one of the highest-ranked franchises, going by different IPL parameters. If its value is USD 250 million, it is only good news for the BCCI,” said N Santosh, the managing partner of D&P Advisory – a Mumbai based LLP.
“In that perspective, the BCCI would be looking between USD 300-400 million. We were anticipating that six months back. With RedBird, that estimation gets reaffirmed. An average team now should cost USD 300 million, so the new team should be around 400 million (about Rs 3000 crore). If we also factor in the Ahmedabad point, the largest stadium in the world, there could be a chance of a huge gap between the price of the two new teams – one may go for USD 400 million and another for USD 350 million,” he added.
Not a surprise that several corporates have reportedly expressed their interest in buying the two new franchises, but those sources involved in the previous sale of the teams reckon each team gets up to 150 crores from the central revenue, and a top team can make another Rs 100 crore from other sources such as the gate collection and sponsorship.
So at the end of the year, a team can earn a profit of up to INR 150 crore. However, this will increase if the body creates a media hype, and the prices for the new franchise will touch the sky.
“He can recover around Rs 150-200 crore out of that in the first 10 years when some losses are inevitable. He will keep making the moolah after 10 years. The key to getting a good price is telling the world that more parties have an interest. If a potential bidder is made known that the biggest business houses have purchased the tender document, the price will automatically shoot up. The media plays a big role in creating the hype. How the BCCI will manage the sale and orchestrate the hype is important,” the source explained.