The Economics of an IPL Franchise: Where the Money Actually Goes
4 June 2026 · 9 min read · The Pavilion
Every February or March, a few days before the IPL season begins, news cycles in India fixate on the same number: the price an overseas pacer just fetched at auction. ₹24.75 crore for Mitchell Starc in 2024. ₹20.5 crore for Pat Cummins. A young Indian batter going for ₹14 crore to a franchise that already had three top-order players.
These are the numbers that travel. They are also the most misleading numbers in the league.
The auction is the visible tip of a much larger and more interesting business. What actually pays for an IPL franchise — the media rights, the central pool, the title sponsor, the gate receipts, the merch — and what those rupees are then spent on, is a story that gets told in the financial pages of business newspapers and almost nowhere else. It is, by some distance, the most lucrative business in cricket.
This is a look at how it works.
The Pie: How an IPL Franchise Actually Makes Money
Roughly speaking, an IPL franchise has two buckets of revenue. The first is the central pool — money the BCCI collects on behalf of the league and distributes to teams. The second is local revenue — money each franchise raises directly for itself.
The central pool, in the current 2023–2027 media rights cycle, is by far the larger of the two. The BCCI sold those five years of broadcast rights for about ₹48,390 crore — split roughly evenly between Star India (television) and the JioCinema / Viacom18 group (digital). That works out to nearly ₹10,000 crore per season of media revenue alone. The BCCI typically keeps half of this for itself and distributes the other half equally among the ten franchises.
The math on that is straightforward and large: each franchise receives somewhere around ₹450–500 crore per year purely from its share of central media rights. Before they sell a single jersey sponsor or a single match-day ticket, every franchise is already running a ₹500-crore-a-year business.
The second bucket — local revenue — is what separates the well-run franchises from the rest. Title sponsors. Co-sponsors. Kit and equipment sponsors. Gate receipts from home matches. Merchandise. Prize money. Local broadcast and digital rights for franchise-owned content. This bucket varies enormously between franchises — a top-tier team can pull in another ₹150–250 crore a year here; a struggling team substantially less.
The Media Rights Engine
The IPL's media rights deal is the single most important number in modern cricket economics. The fact that it now exceeds the value of broadcast rights for entire international cricket calendars in some markets tells you something about where the gravity of the sport has shifted.
A few useful comparison points: the IPL's current per-match media value is approximately $14–15 million. By way of comparison, the English Premier League's per-match value sits around $11 million, the NBA's around $4 million per regular-season game. The IPL is not the largest sport on earth. It is, on a per-match basis, one of the most valuable broadcast properties in any sport.
This is why franchises that lose money on operating costs in any given season are still considered valuable assets. The next media rights cycle is expected to be even larger; ownership of a franchise is, in effect, ownership of a fractional share of that next number.
The Salary Cap and What Sits Outside It
The auction salary cap for the 2025 IPL season was ₹120 crore per team. That is the limit on what a franchise can spend on its 25-player squad. It is also the only player-spending number most fans ever hear.
What gets less attention is everything the salary cap does not cover.
It does not cover the head coach's salary, which for the highest-paid IPL coaches now sits in the ₹10–15 crore range per season. It does not cover the assistant coaches, the batting coach, the bowling coach, the fielding coach, the spin consultant, the strength and conditioning team, the team physiotherapist, the team doctor, or the analysts who now travel with every squad. A top franchise's full support staff payroll can run another ₹25–40 crore a year on top of the ₹120-crore squad cap.
It does not cover the cost of player accommodation, internal travel between cities, on-ground catering, training facilities, or the security detail that travels with every team. It does not cover marketing — the brand campaigns, the influencer partnerships, the city activations that build local loyalty. And it does not cover the league fee a franchise owes the BCCI.
The salary cap is a constraint on one line item. The rest of the operating budget is uncapped, and it adds up.
Where the Money Goes
Stripped down to its core components, a top-tier IPL franchise's annual cost base looks roughly like this:
- Player salaries (capped portion): up to ₹120 crore
- Support staff and coaching: ₹25–40 crore
- Travel, accommodation, logistics: ₹20–30 crore for a full season across 8–10 host cities
- Marketing, brand activation, content: ₹40–80 crore for the bigger franchises
- Stadium rentals and home-game operations: ₹15–25 crore
- BCCI franchise fee (more on this below): variable, typically ₹40–60 crore for the older franchises
- Administrative overhead, legal, finance, team office: ₹15–25 crore
Total operating costs for a well-run franchise: somewhere in the range of ₹275–380 crore per season. Set against a total revenue base that, for the top teams, now sits well north of ₹600 crore in a normal year. The math works.
The BCCI Franchise Fee
One of the more opaque numbers in IPL economics is the annual franchise fee paid to the BCCI. When the league launched in 2008, the eight original franchises were sold for between roughly $67 million (Kings XI Punjab) and $111 million (Mumbai Indians) for ten-year licences. The BCCI took 10% of each year's bid amount as the annual fee for the first decade.
When the league expanded to ten teams in 2022, the two new franchises — Lucknow Super Giants and Gujarat Titans — paid significantly more for their licences. Lucknow's owners paid approximately ₹7,090 crore; Gujarat's paid roughly ₹5,625 crore. These were structured as 10-year deals, with the annual fee owed to the BCCI calculated as a percentage of those amounts.
The practical effect: the two newer franchises are paying meaningfully higher annual fees than the older eight. This is one reason a Lucknow or a Gujarat needs to be tighter on operational costs than, say, a Chennai or a Mumbai with much longer-tenured (and cheaper) licence amortisation.
The Title Sponsor Game
Outside the central pool, the single biggest local revenue line for most franchises is the title sponsor — the brand whose name sits on the front of the jersey.
These deals vary widely. A top franchise — Mumbai Indians, Chennai Super Kings, Royal Challengers Bangalore — can command upwards of ₹30 crore per year for the front-of-jersey position. Mid-tier franchises pull in somewhere in the ₹15–25 crore range. A struggling team in a year where the brand has lost its competitive shine can struggle to clear ₹10 crore.
Beyond the title sponsor, every franchise sells the back of the jersey, the sleeves, the helmet, the trousers, the leading partner slot, and an ascending ladder of co-sponsorship tiers. A well-monetised franchise stitches together ₹100–150 crore of total sponsorship revenue across all of these.
This is also why brand strength matters more than match results, year to year. A franchise that wins the championship boosts its sponsor value for the following auction cycle. A franchise that builds long-term cultural identity — Chennai's yellow, Mumbai's blue, Kolkata's purple — accrues sponsor pricing power that is partly independent of any single season's wins.
Why the Business Pencils Out
Until roughly 2018, most IPL franchises operated at a loss in cash terms. The bet ownership groups were making was on the franchise valuation increasing — that they could sell the team for more than they paid for it.
That changed with the 2023–2027 media rights cycle. The jump in central pool revenue pushed virtually every franchise into operating profitability for the first time. The top-tier teams now generate operating margins in the 15–25% range, which translates to roughly ₹80–150 crore of annual profit. The mid-tier teams clear smaller but real profits. Even the newer expansion franchises, with their higher annual fees, are approaching break-even faster than expected.
The valuations have followed. Independent brand-finance estimates now place the top IPL franchises at values approaching ₹3,500–4,500 crore each. A team purchased for $111 million in 2008 — roughly ₹450 crore in 2008 rupees — is now worth more than ten times that amount.
Whether that valuation is fully realisable in a sale is a separate question. But on the central economic question — is owning an IPL franchise a good business? — the answer is now unambiguously yes.
What IPL Economics Means for the Rest of Cricket
The shape of IPL franchise economics is now bending the rest of world cricket.
International cricket boards outside India are now competing for the calendar window in which their best players can be available for IPL contracts. Some have begun structuring central contracts to encourage availability — others to discourage it. Several smaller boards have started their own franchise leagues, modelled directly on the IPL, and are competing for the same overseas pool of T20 talent.
The economics of a top-five IPL salary now exceed the central contract value of an international captain in most countries. This produces career decisions that would have been unthinkable a decade ago — players retiring from international cricket in their early thirties to focus on franchise circuits, players turning down national team selection to honour a franchise commitment, players negotiating availability windows with their own boards.
The IPL did not invent franchise cricket. But IPL franchise economics — the central pool, the media rights cycle, the salary cap, and the cultural pricing power of the established teams — set the template that every other league now copies. Cricket's future revenue map will look more like the IPL's, not less.
The auction-day headline numbers are still the ones that travel. But they are, as ever, the smallest part of the story.
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