The Economics of IPL

Did you watch the 2025 Auctions of the Tata IPL? In case you did, you must have thought – “How do these teams generate so much money that they are willing to spend more than 25 CRORES on players?” This article deals exactly with these types of questions.

So, let us delve straight into the topic.

Founded in 2008, the Indian Premier League (IPL) is now the biggest cricket event in the world. The IPL has become the second richest league in 2025 by generating $12 BILLION. The IPL is held by the BCCI (The Board of Control for Cricket in India) every year.

There are a total of 10 teams in the IPL (as of 2025). We will first start by tackling the very basic ways of earning, which come to our minds before the complex methods (discussed later in the article) whenever we think about the economics of this festival.

These 10 teams have a big fanbase of their own, with the largest population of fans being of the Chennai Super Kings (CSK)*. If you are a fan of Royal Challengers Bengaluru (RCB) or of Virat Kohli, should I say, I am very sorry to disappoint you by saying that RCB has the third largest fanbase. CSK has 18.5 M** on Instagram, 14 M on Facebook, 10.9 M on X and 43.4 million followers in all.

The second most popular team is the Mumbai Indians (MI). MI has 17.7 M, 14 M, and 8.3 M followers on Instagram, Facebook, and X, respectively. Adding these numbers, we can say MI’s total fan base is 40 million followers.

RCB has 19.7 M followers on Instagram, 10 M on Facebook and 7.4 M on X (formerly known as Twitter). This comes to a total of 37.1 million followers.

We can go on and on and calculate each team’s fanbase, but that’s not the point. The point is to show how blindly people “worship” their teams. To prove their devotion, fans go to the stadiums, purchase tickets for some thousand bucks, eat and drink whatever they want, and even buy jerseys. Approximately 80% of all the money goes to the home team, 10-15% goes to the Cricket Board of that particular state, and the remaining 5-10% goes to the BCCI. For example, if the Chennai Super Kings and any other team, say the Rajasthan Royals (RR), fight at the M.A. Chidambaram Stadium (popularly known as the Chepauk Stadium) in Chennai, 80% of the revenue earned by selling tickets, food items and jerseys, will go the CSK, 10-15% will go to the Tamil Nadu Cricket Association and the remainder will go to the BCCI as commission.

This is the first way the teams of the IPL earn revenue. The second is – Sponsorship. You might have seen your favourite teams having the names of a myriad of companies printed on their shirts, pants and even caps! This is just a simple way through which the teams earn money. You must have seen your favourite cricketers in advertisements, wearing their jerseys and promoting some “Packaged Drinking Water” or some other company, but that’s not the part where we should shift our focus to. The main part is that teams generate 17-34% of their revenue by sponsorships. For example, here are the approximate earnings through sponsors of some teams:

• Royal Challengers Bengaluru (RCB) – ₹124 crore

• Delhi Capitals (DC) – ₹112 crore

• Chennai Super Kings (CSK) – ₹95 crore

• Kolkata Knight Riders (KKR) – ₹85 crore

• Mumbai Indians (MI) – ₹80 crore

Guess sponsors really want Virat Kohli in their ads!

In the Tata IPL 2025, the winner will get 20 Crores, the Runner-up will get 13 Crores, the Third Place will get 7 Crores, and the 3rd runner-up will get 6.5 Crores. This clearly shows that apart from the teams, the BCCI is also generating tons of cash! We will discuss that later, for now, let us stick to how teams roll in the dough. This prize money goes to the owners of the team, and the rest is divided equally among the players. Surely enough, these owners are paying more than 70 Crores to players, what good will some part of 20 crores do? Well, the prize money is NOT the place they earn from. Say, if your team wins the title, more people will support your team, which will lead to more people buying tickets and jerseys of your team and even more sponsors for you!

Another way of earning can be through auctions and trading players. You might say, “The teams literally spend money on players, they can’t earn while spending, right?” WRONG! They spend money on big players. These big players have a massive fan base of their own, and now that big fan base will become a part of the team’s fan base. Thus, even more people will buy tickets for that team’s matches and its jerseys. The big player will advertise for your team (result = more sponsors), and the player will help your team win. With the team’s win, more fans and sponsors will follow, and this means more money!

Moving on to the financial structure of the BCCI, you might have noticed that instead of saying, “A two-and-a-half-minute break for players”, we say “CEAT Tyres Strategic Timeout” and instead of saying “The player who turned the tables in the match”, we say “Dream11 Gamechanger of the Match” or “My11Circle Fantasy Points Award goes to …”. Just like that, we say “The Batsman hit an AngelOne Super Six of the Match” rather than “The Batsman hit it up and over for a six” (or something like that), we say “Masterfully stroked for Rupay on-the-go four” rather than simple saying “A beautiful shot and the bowl has gone all the way to the boundary”.

This is sponsoring. You can’t imagine how much BCCI charges, and these companies are willing to pay to get their names as sponsors of the “TATA IPL”. My11Circle paid 625 CRORES for a time period of 5 years to get an award after their company’s name. CEAT’s agreement is valued at ₹240 crore for the 2024-2028 cycle.

TATA paid a whopping 2500 CRORES to become the title sponsor of this league for the years 2024 – 2028.

I need not write anymore because I believe that your jaw must have dropped dead after getting to know how the IPL mint money. Oh, and by the way, for the 2023-2027 IPL broadcasting cycle, Star Sports secured the TV rights for 23,575 crore, while Viacom18 (Jio Hotstar) won the digital streaming rights for 20,500 crore. Therefore, together, Star Sports and Viacom18 paid 44,075 CRORES, making IPL’s media rights one of the most expensive in global sports.

A very critical point of view is not that all that money goes as profits. If you see how many things the BCCI has to do, the amount of money it earns gets justified. They have to pay the commentators, the staff in the stadium, the umpires, ensure the safety of the audience, keep the stadium clean, make sure violence doesn’t take place amidst the match, ensure the viewers’  cars are parked at the correct spots, and so much more.

* The Number of fans per team is as per the official social media pages of the teams on the 20th of May, 2025.

** M = Million

*** There may be some factual inaccuracy regarding how much money BCCI or any other team has earned through sponsors.