April 26, 2025

How IPL Franchises Earn Revenue: Complete Guide 2025

Author: CMA Knowledge | Updated on: April 26, 2025

The Indian Premier League (IPL) is not just a cricket tournament; it is a multi-billion dollar business empire. IPL franchises like Mumbai Indians (MI), Chennai Super Kings (CSK), and Royal Challengers Bangalore (RCB) are some of the most valuable sports teams globally. But how do these franchises actually earn revenue? Let's dive deep into their financial strategies, income streams, and future potential in this comprehensive guide by CMA Knowledge.

Introduction: IPL as a Business Model

When IPL started in 2008, few realized it would become a sports marketing revolution. Today, each team operates like a corporate entity, managing multiple income sources, investments, and expenses, similar to a professional business house. Understanding their revenue model offers lessons not just in sports management but also in business strategy and brand building.

1. Central Revenue Pool (Broadcasting Rights and Sponsorships)

Broadcasting Rights

The biggest source of income for IPL franchises is the central revenue pool, primarily funded by broadcasting rights. Every few years, the BCCI auctions broadcasting rights, generating billions. For example, in 2022, Star India and Viacom18 bought media rights for a whopping ₹48,390 crore for five years.

Here's how it works:

• The BCCI collects the broadcasting money.
• 50% of this is distributed equally among all franchises.
• The rest is based on performance and viewership metrics.

Impact: Even the teams finishing at the bottom of the table get a massive share of TV revenue, ensuring financial stability.

Title Sponsorship

Brands like Tata, Vivo, and Dream11 have paid hundreds of crores to be IPL title sponsors. Part of this money also goes into the central pool, benefitting all teams equally.

2. Franchise-Specific Sponsorships and Partnerships

Each franchise has its own sponsorship deals:

• Principal Sponsors: Brands like Gulf Oil (CSK), Slice (MI), and Muthoot Group (RCB) pay heavily to have their logos on team jerseys.
• Associate Sponsors: Other smaller branding spaces like helmet, cap, and sleeve sponsors.
• Official Partners: Brands that partner with teams for specific seasons or campaigns.

Case Example: Mumbai Indians

MI reportedly earns ₹100+ crore just from their principal sponsorships annually, with big brands like DHL, Marriott Bonvoy, and Reliance Digital onboard.

3. Ticket Sales and Match Day Revenue

When IPL matches are held in a home-and-away format, franchises get to sell tickets for their home games:

• Stadium tickets (general, VIP, corporate boxes)
• Hospitality packages for premium viewers
• On-ground branding and refreshments

Ticket prices range from ₹500 to ₹30,000+ depending on seating categories. Premium matches (e.g., MI vs CSK) are usually sold out well in advance.

Example: Chennai Super Kings

CSK's home stadium, MA Chidambaram (Chepauk), has a loyal fan base, helping them generate significant match-day revenues. CSK often crosses ₹30-40 crore per season just from ticketing!

4. Merchandise and Licensing

Franchises sell a wide range of merchandise:

• Team jerseys
• Caps
• Flags and accessories
• Special edition collectibles

Teams tie up with e-commerce giants (Amazon, Flipkart) or sell via their own online stores. For example, RCB’s merchandise like the Bold Army jerseys is a fan favorite every season.

Licensing Deals

Teams license their brand for various products — like kids’ gear, gaming apps, fantasy sports — and earn royalties.

5. Prize Money for Performance

Based on tournament performance, franchises also earn prize money:

• Winner - ₹20 crore
• Runner-up - ₹13 crore
• Third Place - ₹7 crore
• Fourth Place - ₹6.5 crore

While prize money is smaller compared to sponsorship or broadcast revenue, it is still a vital bonus for franchises.

6. Digital Revenues: Social Media, Apps, NFTs

Social Media Sponsorships

Teams monetize their massive social media following via:

• Branded posts
• Sponsored content
• YouTube videos with ad revenues

Team Apps and Games

Many teams have their own apps offering fan experiences, exclusive interviews, and behind-the-scenes videos. These apps generate revenue through in-app advertisements and premium memberships.

Emerging: NFTs (Non-Fungible Tokens)

Teams like CSK and MI have launched NFTs, allowing fans to buy, sell, and trade digital memorabilia, opening new revenue channels in the Web3 ecosystem.

7. Player Transfers and Trades

In IPL, players are assets. Franchises often engage in:

• Direct Transfers for agreed sums.
• Trade Deals with cash considerations.

While not a primary revenue source, smart trading can save money on auctions or fetch financial compensation.

8. Equity Sales and External Investments

Many franchises are selling minority stakes to investors:

• CSK sold a 1.5% stake to a private equity fund, valuing them at over $1 billion.
• MI's global expansion (MI Emirates, MI Cape Town) is backed by Reliance Industries.

This not only brings cash inflows but also enhances brand value internationally.

9. Women's Premier League (WPL) Expansion

With the WPL's success, IPL franchises have expanded into women's cricket. Mumbai Indians, Delhi Capitals, and RCB have women's teams now, tapping into new sponsorship and fan markets, thus adding another revenue stream.

10. Challenges and Risks

Despite the booming business model, IPL franchises face certain challenges:

• Player injuries and form fluctuations affecting brand value.
• Regulatory hurdles like betting bans and tax policies.
• Competition from new leagues globally (like SA20, Major League Cricket).
• Dependence on central revenue rather than building independent profitability.

11. Future Outlook for IPL Franchise Revenues

The future is even brighter. Key trends include:

• More global expansion (MI in UAE, CSK exploring US markets).
• Higher digital engagement (Metaverse experiences, fan tokens).
• Expansion of the tournament itself (more teams, longer seasons).
• Higher valuations — a franchise like CSK could soon be worth $2 billion+!

Case Studies: Real-Life Examples

Chennai Super Kings (CSK)

• Valuation: $1.15 billion (2023)
• Revenue: ₹450+ crore annually
• Strong brand loyalty and merchandise sales.

Mumbai Indians (MI)

• Valuation: $1.3 billion (2023)
• Revenue: ₹500+ crore annually
• Global expansion through MI Emirates and MI Cape Town.

Royal Challengers Bangalore (RCB)

• Strong social media presence — highest engagement among teams.
• Massive fan base despite no IPL trophy yet!
• Revenue through digital and merchandise platforms.

Frequently Asked Questions (FAQs)

Q1: What is the biggest source of revenue for IPL franchises?

Answer: The biggest source is the central revenue pool, primarily made up of broadcasting rights and sponsorships distributed by BCCI.

Q2: How much do franchises earn from ticket sales?

Answer: Depending on stadium capacity and matches played, franchises earn between ₹20 crore to ₹50 crore per season from ticket sales.

Q3: Can IPL teams lose money?

Answer: Yes, if sponsorships dry up, performance dips, or operational costs overshoot, franchises can temporarily run at a loss.

Q4: How important are merchandise sales?

Answer: Merchandise is an important brand-building and fan engagement tool, but revenue from merchandise is smaller compared to broadcasting and sponsorships.

Q5: What role do investors play in IPL franchises?

Answer: Investors bring fresh capital, global expertise, and help franchises expand into international leagues and businesses beyond cricket.

Conclusion: IPL Franchises – More Than Just Cricket Teams

Today, IPL franchises are sophisticated businesses managing multimillion-dollar revenue streams. They earn from broadcasting, sponsorships, merchandise, ticket sales, digital platforms, investments, and now even global expansion. Understanding their revenue model is crucial not just for cricket fans, but also for anyone interested in sports business management. IPL has indeed changed the way we view sports, and the journey has just begun!

For more such detailed insights on finance, business strategies, and CMA topics, stay tuned to CMA Knowledge!