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BCCI Set To Get Another Rs 4000 Crore In The Women’s IPL(WIPL) Teams Auction

The auction for the teams that will compete in the inaugural Women's IPL will be held on Wednesday.

The auction for the teams that will compete in the inaugural Women’s IPL(WIPL) will be held on Wednesday. As per reports, as many as 30 companies have shown interest. They have picked up the bid paper. Only five teams among the lot will be seen in action at the Women’s IPL. The bid papers worth Rs 5 lakh have been bought by the 30 companies and 10 among them have their teams in the men’s IPL. However, there are rumor’s that Chennai Super Kings and Gujarat Titans have backed out.

Popular big names in different sectors like – Adani group, Torrent group, Haldiram’s Prabhuji, Capri Global, Kotak, and Aditya Birla Group have shown interest. Each team is expected to be sold in the range of Rs 500-600 crore. BCCI is all set to see another windfall of Rs 4000 crore as some of the top business houses are set to put it all on the table to be among the five teams in the Women’s IPL(WIPL).

As per market experts, the teams could go on to bid for amounts in the “range of 500 to 600 crore INR” per team.

“WIPL has huge potential but most of the legacy teams would like to mix optimism with pragmatism,” an industry insider, who has previously worked on men’s IPL team bids, said to PTI ahead of the auction.

“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 further added.

According to market insiders, there are two principles on which these bids are placed by business houses – “Return on Investment” (ROI) AND “Return of Ego”. ROI stands for the profit on which an entity spends while Return of Ego means that if a company is adamant about buying a team then they will go all out for it even if it takes five to seven years to touch the breakeven point.

A former IPL franchisee official, who had once 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 next five years,” the source explained.

How will the WIPL franchises earn revenue?

“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 explained.

Women’s IPL teams are going to get more share of the media rights money compared to the men’s IPL teams.

The BCCI in the case of Women’s IPL(WIPL) is going to share 80 percent of media rights money with the teams (in the 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 crores 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 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.

He estimated a loss of Rs 50 crore or even greater in the first few years. There is a salary cap of Rs 12 crore for the squad. Add another 6 to 8 crore on the 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 also.
“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 teams together and perhaps quickly make the profit zone,” the official added.

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