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Original 8 set to hit pay dirt

cricket Updated: Apr 08, 2011 12:37 IST
Gaurav Choudhury
Gaurav Choudhury
Hindustan Times
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All the eight franchisees of Indian Premier League (IPL) last year are expected to clock profits this year, a sign that the snappier version of the game is getting swankier and more lucrative.

In fact, all but one of the eight teams already logged operating profits in the last season itself.

During the fourth season that kicks off on Friday with a Chennai Super Kings-Kolkata Knight Riders face-off will have a bigger format with two new contenders.

The new participants have emerged as game-changers, as following Subroto Roy-promoted Sahara Adventure Sports purchasing the Pune team and Rendezvous Sports acquiring the Kochi team, valuations of all the teams shot through the roof.

While Roy paid $370 million (Rs 1,702 crore), Rendezvous Sports coughed up $333 million (Rs 1,531 crore).

Last year, when Emerging Media, owner of Rajasthan Royals, sold 12% of stake to an entity owned by actor Shilpa Shetty and her husband, Raj Kundra, the team turned out to be worth $140 million (Rs 644 crore) that was more than double the price it was bought for - $67 million (Rs 301 crore).

Sources in team franchises said their books were now looking cleaner and healthier.

"We expect to break even this year," said a top executive of an IPL franchisee.

Team sponsorship is the largest revenue source.

Teams can leverage their players in getting sponsorship as players are also bound by contracts to provide four free outings with their teams, which can be used for commercial purposes.

Gate receipts or ticket sales are another source of revenue.

Mumbai Indians earned Rs 24.6 crore from sponsorship revenue and gate fee in 2009-10, while Delhi Daredevils mopped up Rs 48 crore from sponsorship fee alone during the year ending March 31, 2010.

"There are many other sources of revenues that are being tapped. Franchisees are expecting a big jump in receipts from ticket sales and merchandise sales," said a report by equity broking and consulting firm IIFL.