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In about a month, the celebrity owners and top executives of Indian Premier League (IPL) franchises will try to outbid each other to buy cricketers for hundreds of thousands of dollars at a live-streamed auction. As a prelude to that, earlier this month, the eight existing teams announced up to four players they’d like to retain for the 2022 edition of the glitzy Twenty20 cricket tournament.

As expected, Chennai Super Kings (CSK) named skipper Mahendra Singh Dhoni among the four players it would like to hold on to. The 40-year-old wicketkeeper-batsman led the franchise to its fourth IPL title earlier this year. CSK is now one championship shy of equalling Reliance Industries Reliance Industries The Ken Reliance’s unrelenting quest to become a sporting giant Read more -owned Mumbai Indians’ record.

With nine trophies between them, it’s fair to assume that these two teams are much better off, financially, than the rest. But that’s not entirely true, if The Ken’s analysis of the franchises’ most recent financials is any indication.

Not surprisingly, the 2020 season champions Mumbai Indians made money in the year ended March 2021. But Punjab Kings, which stood sixth on the points table that season, turned a higher profit. And so did Rajasthan Royals, the worst-performing team in the 2020 edition, which was held in the United Arab Emirates. (Kolkata Knight Riders, partly owned by Bollywood star Shah Rukh Khan, hasn’t yet filed its results for the year ended March 2021. And extensive financial details of Sunrisers Hyderabad, which is a division of the media company Sun TV Network, are not available.)

In the IPL, profitability is undoubtedly divorced from winning. And that is largely a function of the lucrative deals the Board of Control for Cricket in India (BCCI), which organises the IPL, has managed to land for the league, both for media rights and sponsorships.

Winning is not a prerequisite for quoting a high price tag for team sponsorships, either. Royal Challengers Bangalore’s sponsorship rates are next only to Mumbai Indians and CSK, even though RCB’s biggest achievement is reaching the IPL final three times. But with their balance sheets in far better shape than their rivals, Mumbai Indians and CSK show why it pays to have large backers.

The performance-profits non-correlation

“You get Rs 200 crore ($26 million) from central rights whether you like it or not,” says a sports management professional. They and a few others The Ken spoke to for the story requested anonymity since they did not want to be seen commenting on the teams.

Central rights—including media and league sponsorship—contribute between two-thirds and three-fourths of teams’ revenue.

AUTHOR

Seetharaman G

Starting out as a business journalist in 2008, Seetharaman has written about energy, climate change, retail, banking, and technology. He has worked with Business Today, a fortnightly, and the Sunday edition of The Economic Times.

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