The Board of Control for Cricket in India (BCCI) is expected to see a 30 to 40 per cent jump in revenues from the second edition of the Indian Premier League (IPL) tournament over the first edition held in India last year. Profits, however, are expected to increase marginally.
Early assessments by senior IPL executives show that the cricket body is expected to earn Rs 450 crore to Rs 500 crore as revenue. But owing to higher expenses incurred on the 36-day tournament, which was relocated to South Africa owing to security concerns in India, profits could be Rs 300 crore to Rs 350 crore, against Rs 305 crore in IPL-1.
Together with other tournaments, BCCI's profit for 2008-09 touched Rs 500 crore.
"We are still in the process of compiling the financial numbers and our accountants have stayed behind in South Africa for this purpose. Revenues should be around double last year's. But we have to factor in our expenses, which were higher," said a top IPL executive, requesting anonymity.
The BCCI's main source of earnings will also come from the renegotiated broadcasting rights with Multi Screen Media or MSM (owners of SET MAX channels) and World Sport Group (WSG). In March, BCCI and MSM-WSG reached an out-of-court settlement under which BCCI will be paid Rs 8,200 crore over the next nine years for the telecast rights of IPL.
The telecast rights are shared in an 80:20 ratio in favour of the eight franchise teams for the first five tournaments. Later, the ratio changes to 60:40, also in favour of the franchise team owners.
A back-of-the-envelope calculations show that BCCI will earn around Rs 183 crore in broadcasting rights and another Rs 190 crore as franchise fees, plus Rs 100 crore to Rs 150 crore from advertising. However, IPL sources said that the accountants will have to factor in the conversion cost of the rupee to the South African rand.
Meanwhile, the eight franchisee teams are said to have collectively made a profit of Rs 225-240 crore, early estimates show.
"We have made money courtesy an increase in the broadcasting rights. I think, everybody has made money," said P K Iyer, managing director, Deccan Chronicle Holdings, the owners of Hyderabad Deccan Chargers, the winners of IPL 2.
Last year, only two IPL teams, Kolkata Knight Riders and Rajasthan Royals made cash profits. This year, the main source of income for the eight franchisee teams comes from the revised broadcasting rights fees that works out to around Rs 70 crore per team. The main expenses of the eight teams were only two -- franchise fees to BCCI and player fees, said an executive involved with Delhi's IPL team.