IPL first season made Rs 661 cr, cricket board got only Rs 15 cr

August 28, 2009

In its first season, the Indian Premier League (IPL) contributed less than Rs 15 crore to the coffers of the Board of Control for Cricket in India.

A draft note on the IPL's income and expenditure in the year ended March 2009, part of the BCCI's detailed financial accounts being circulated among board members for their perusal, shows that while the high-profile tournament generated Rs 661 crore in total income, its surplus, which is the amount left after accounting for expenses, was only Rs 14.86 crore.

The expenses included share of franchisees in IPL's income from media rights and sponsorships, prize money, opening ceremony expenses, advertisements, and Rs 26 crore as compensation to Chennai Super Kings and Rajasthan Royals for the cancelled Champions League 2008.

Two senior members of BCCI confirmed that the board was reviewing its accounts for the 2008-09 year and a draft copy of the financial statements had been sent to the members for vetting. The accounts are expected to be approved by the board in its meeting scheduled for September 2.

According to the draft note, a copy of which is with The Indian Express, one of the biggest contributors to IPL's income were the media rights sold to broadcast company Multi Screen Media Pvt Ltd and sports marketing company World Sports Group.

The league got Rs 242 crore in the first year from the deal, which was negotiated at $1.02 billion for 10 years. This included a $108 million commitment for promoting the event. The media rights were renegotiated with the same partners at $1.6 billion, for nine years, from the second season onwards.

In the first year, franchisee consideration brought in around Rs 290 crore and sponsorships Rs 111 crore. Among the other sources of income were pouring rights (Rs 10 crore) signed with beverage company PepsiCo.

As promised by the IPL management, a large part of the revenue generated was shared with franchisees and also on initiatives to build the excitement around the event. Around Rs 220 crore, for instance, was awarded to franchisees as part of their share in IPL's central revenue pool. The league also shared the Rs 10 crore from the income from pouring rights with the franchisees. The IPL management spent around Rs 33 crore on advertising, whereas league and administrative expenses accounted for an additional Rs 65 crore.

Lalit Modi, the chairman of IPL, declined to comment saying he had not seen the accounts. He, however, said: "...profits may have been less, but you should look at the total money (generated by IPL)."

M P Pandove, honorary treasurer of the BCCI, said he could not comment on the issue because the financial accounts of BCCI for 2008-09 were still with the auditors.