The IPL and Its Financial Challenges
Lalit Modi, the man who played a pivotal role in establishing the Indian Premier League (IPL), has recently spoken out against the Board of Control for Cricket in India (BCCI) over what he perceives as poor management of the league. His comments have sparked discussions about the financial structure and future of one of cricket’s most lucrative competitions.
Modi’s relationship with the BCCI has always been complex. In 2010, he was suspended from his position as IPL chairman and commissioner due to allegations of misconduct, indiscipline, and financial irregularities. Three years later, he received a lifetime ban from the organization. Despite this history, many acknowledge that Modi has an in-depth understanding of the IPL, having contributed significantly to its development and success.
Financial Structure of the IPL
In an interview with Sportstar, Modi highlighted concerns about how the BCCI handles the distribution of match revenues. He explained that the BCCI currently retains half of all IPL match income, which he estimates at around INR 118 crore per game. The remaining 50% is then split equally between the two teams involved in the match, with each receiving 25%.
Modi pointed out that during the group stage, teams are required to play against each other twice—once at their home venue and once at the opponent’s venue. This arrangement, he argues, is crucial for maximizing revenue and ensuring fair distribution.
He added: “For every game, the BCCI gets 50 per cent, and the remaining 50 per cent is distributed to teams. So, teams are now losing out on 20 games. It is by contractual obligation for the fees that they’re paying to provide them home and away.”
Expansion Plans and Their Impact
The BCCI had initially planned to expand the number of matches in the IPL. Broadcasters were promised an increase from 74 to 84 games in the 2023–27 media rights cycle, and later to 94 games. More matches could potentially boost franchise earnings, but this expansion has not yet materialized.
Modi claims that the delayed process results in each franchise losing approximately INR 120 crore during every season. He emphasized that the issue is not just about the number of games but also about the structure of the schedule.
Arun Dhumal, the current IPL chairman, has also addressed these concerns, highlighting the need for a more balanced approach to scheduling and expansion.
The Importance of Home and Away Matches
Modi stressed that the value of the IPL lies in the home and away format. He argued that if the BCCI cannot accommodate this structure in the calendar, it should not increase the number of teams. “If you don’t have time in your calendar, don’t increase the number of teams. Simple as that,” he said.
He further stated: “That’s not what we sold. Has everybody signed off on it? I guarantee not. Why are they not playing home and away? There are excuses. It is our contractual obligation. This is a commercial transaction for the teams.”
Potential Revenue Growth
Modi believes that the BCCI has not fully realized the potential of the IPL. He argues that both the league and its teams could be even bigger than they are today. Recent sales of franchises like the Royal Challengers Bengaluru and the Rajasthan Royals have reached record levels, indicating strong market demand.
However, Modi suggests that if the league had maintained a home and away format with 94 matches, the revenue would have been significantly higher. He calculated that with 94 matches, each generating INR 118 crore, the total media rights revenue would have been INR 2,400 crore. Out of this, INR 1,200 crore would have been distributed to the 10 teams, with each team receiving INR 120 crore.
This, he argues, would have led to higher team valuations and greater overall growth for the league.
