WIPL Set To Make BCCI Richer By INR 4000 Crore: Report

Some of the largest corporate houses are expected to make competitive bids for the five Women’s IPL (WIPL) franchises that will be up for auction on Wednesday, increasing the BCCI‘s wealth by at least Rs 4000 crore. Market analysts predict that each team would spend “between 500 and 600 crore INR” during the closed-bid auction.

More than 30 firms, including all 10 of the clubs in the men’s IPL, have purchased the bid paperwork for INR 5 lakh. The Adani Group, the Torrent Group, Haldiram’s Prabhuji, Capri Global, Kotak, and Aditya Birla Group are just a few well-known corporations that have expressed interest in purchasing a team.

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BCCI Expecting Bids In The Range Of 500 Crores

When the BCCI requested offers for two new men’s teams in 2021, several of these corporations were unsuccessful. Mumbai Indians, Rajasthan Royals, Delhi Capitals, and KKR are among the traditional IPL clubs that would seriously consider adding to their current men’s squads abroad.

“WIPL has huge potential but most of the legacy teams would like to mix optimism with pragmatism,” Prior to the auction, a business source who had previously worked on the offer for the men’s IPL franchise informed PTI.

“Expect a few bids in the range of Rs 500 crore upwards. Rs 800 crore plus could be a bit ambitious but BCCI won’t complain,” he added.

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Market experts claim that corporate houses base their offers on two guiding concepts. The first is “Return on Investment,” or ROI, which is the foundational idea behind any firm. On what an entity spends, is profit. The second one isn’t a business concept in the traditional sense, but it is known as the “Return of Ego” in the business world.

When it comes to this, some of the most well-known corporate brands are willing to spend any sum to acquire a certain piece of real estate. even if it takes between five and seven years to reach breakeven.

It has to do with wanting to buy something at all costs. A current IPL team can afford to “bleed” a little bit more in the early years, which is essential because they already have a “stable cash stream” in place. An IPL franchisee officer from the past who had previously worked on bids,explained the rationale which goes into the bidding.

“Let’s say, a franchise makes a winning bid of Rs 500 crore for a period of five years. Now that’s Rs 100 crore committed straightaway for each of the next five years,” the source explained.

“Now, what will be the source of earning for the franchises? “The BCCI distributes its media broadcast revenue which is one of the major earning chunk. The second is a share from BCCI’s central pool of sponsorship. The third is a franchisee’s own set of sponsorship earnings. Fourth is gate sales, money earned from tickets,” he elaborated.

BCCI To Share 80% Of Media Rights Money With The Teams

What would a franchisee make from WIPL’s media income pool, then?

“The BCCI in case of Women’s IPL is going to share 80 percent of media rights money with the teams (in case of men, it’s 50:50) to help them develop a sustainable model.

“So what will be the mathematics over here? JIO has brought media rights for five years at Rs 950 crore (approx) which is roughly Rs 190 crore per year. So 80 percent of 190 crore is 152 crore.

“Let’s make it a round figure of Rs 150 crore. That’s what each franchise gets over a period of five years which is approximately Rs 30 crore per annum,” he explained.

“Now BCCI will also distribute a chunk of its central pool of sponsorship (title sponsor, co-sponsors, various award sponsors) also with franchise. Add to it the franchisee’s own revenue pool also. So it could be anything between Rs 15 to Rs 18 crore per year. Gate sales won’t earn you a great deal in the first year,” he said.

Franchises To Bear Loss In First Few Years Of WIPL

So the per year earnings for a team are expected to be Rs 50 crore. Now, apart from the Rs 100 crore franchisee fee per year, what will be the other expenses?

“There is a salary cap of Rs 12 crore for the squad. Add another 6 to 8 crore on salary of support staff. Let’s make it Rs 20 crore. Add the hotel expenses, fees paid to state associations for the stadium and other operational costs. It could be anything between Rs 6 to 8 crore. The first-year single city would reduce expenses.

“So the cumulative expenses per year could be Rs 128 to Rs 130 crore. The earnings would be around Rs 50 crore. So there is a chance during first few years, there would be a loss of Rs 50 crore or more,” he explained.

“The legacy franchises (MIPL) are better placed to offset these losses as they are already making profits after 15 years of IPL. They will club their men’s and women’s team together and perhaps quickly make the profit zone,” the official added.

The five-team WIPL will be contested in Mumbai in March at a few different locations.

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