How India’s Top IPL Franchises Performed Financially

The value of the world’s biggest T-20 cricket tournament has nearly doubled in five years on the back of three of its most dominant franchises.

The Indian Premier League was worth $6.8 billion (around Rs 41,800 crore) in 2019 from $3.2 billion five year ago, according to a report by Duff & Phelps, led by billionaire Mukesh Ambani-backed Mumbai Indians, Chennai Super Kings and Bollywood actor Shah Rukh Khan’s Kolkata Knight Riders.

Among the three teams, Mumbai Indians and Chennai Super Kings have won the IPL title four and three times, respectively, in 12 seasons. Barring 2010, Mumbai Indians have won the title every time they have qualified for the finals. Chennai Super Kings have reached the finals eight times and won three titles out of the 10 seasons they were part of.

That’s boosted the teams’ brand values, which have increased over the previous year, according to the international corporate finance and valuation adviser. Mumbai Indians and Chennai Super Kings are the top two valuable franchises, Duff & Phelps said.

The brand value of two-time champion Kolkata Knight Riders, in contrast, declined in 2019 led by inconsistency in the team’s performance and its failure to qualify for the play-offs, disappointing sponsors and advertisers alike.

IPL franchises earn revenue through:

Grant of central rights.
Sponsorship income.
Gate collection.
Other franchise income.
Sales and royalty from merchandise.

The grant of central rights contributes the largest share of revenue based on the number of matches played, which is allocated on a pro-rata basis by the Board of Cricket Control for India.

Mumbai Indians recorded the highest gate collections in 2018 though its central rights revenue fell as it failed to enter the qualifiers.

IPL teams recognise their annual revenues in the year the IPL season concludes. That means, the revenues of Mumbai Indians, which won the IPL this year, and Chennai Super Kings, which was the runner-up, will be recognised in the financial year ending March 2020.

As of 2018-19, Kolkata Knight Riders, earned the most in the eleventh season of the tournament, posting a profit of Rs 132.7 crore, according to company annual reports and filings with Ministry of Corporate Affairs.

Investors

Mumbai Indians is an indirect subsidiary of India’s largest company by market Reliance Industries Ltd.

Chennai Super Kings has a diverse shareholding after owner India Cements Ltd. demerged the cricket franchise and distributed shares to its shareholders proportionately.

Shah Rukh Khan and his wife Gauri own 55 percent stake in Kolkata Knight Riders, with the remaining held by The Sea Island Investment Ltd., according to filings with the Ministry of Corporate Affairs.

U.K.-based citizen Anthony David Holt holds beneficial ownership—or is the ultimate owner—of Mauritius-based The Sea Island Investment Ltd. through Albany Trustee Co. Ltd., a company based in Guernsey.