IPL teams on a sticky wicket as profits dip

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Despite getting more sponsors, profitability has been going down, reveal RoC data

Mumbai, March 2

Even as team owners spend crores on player acquisitions, IPL teams themselves seem to need a makeover.

A revenue analysis of the teams indicate that profits are falling and companies will need to push the envelope harder to keep viewer fatigue at bay.

Latest filings by five of the tournament’s eight teams with the Registrar of Companies (RoC) show that profitability has been going down over the years despite higher number of sponsors.

According to details of revenue accessed by BusinessLine and collated by data analytics firm Tofler, Shah Rukh Khan-owned Kolkata Knight Riders is the most profitable team with a total revenue of ₹124.6 crore and a net profit of ₹6.1 crore as on March 31, 2016. Khan’s team had, however, reported a higher net profit of ₹14.1 crore in 2015.

Numbers for the current year will be available only by November-December when the companies disclose the same to the RoC.

Similarly, King’s XI Punjab, owned by Bollywood actor Preity Zinta along with Ness Wadia and Mohit Burman, too has been seeing shrinking profits with the net profit dipping from ₹12.7 crore in 2015 to ₹3.3 crore in 2016.

According to Harish Bijoor, brand strategist, Harish Bijoor Consults, “IPL is a long-term investment and team owners are here for the long haul. Sponsorships too has been tapering in the last two years and IPL, too, has been in the thick of controversies.

“But with the Lodha Commission giving clear mandates, we expect the game to come back to form. We believe that it will be another five years before IPL becomes profitable for team owners.”

For most companies, revenues come by way of ticket sales, merchandise sales, in-stadia advertisement and team sponsorships. The majority of the revenue comes in the form of central rights — the share in the IPL revenue — that the BCCI pays to the teams. The costs for most companies include franchise fee to the board, fees to local cricket associations, wage costs and spend on advertising and promotion.

IPL 9 had close to 80 sponsors for 60 matches. The previous seasons of IPL had close to 76 matches. IPL10 will see a total 60 matches being played.

Published on March 02, 2017

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