Top 5 Richest T20 Leagues in the World – Sportzwiki

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Top 5 Richest T20 Leagues in the World 

Top 5 Richest T20 Leagues in the World
Sourav Ganguly had lead the Indian Premier League franchise Kolkata Knight Riders (KKR) in the inaugural season. Image Courtesy: Getty Images

Penning down the top 5 richest T20 cricket leagues in the world leads us to an argument that Cricket and Economics often go hand in hand, and one doesn’t need to look beyond the modern day arena to understand this statement.

While the good old days might remind viewers about the persona, charm and beauty of red ball cricket, the current generation might beg to think otherwise. T20 as a format has captivated one and all and continued to attract millions across the globe annually.

It all started in England nearly one and a half decade ago, as some lucrative minds came up with the idea. Slowly, but steadily, the bug of T20 cricket spread across the globe, and once India got crowned winners of the inaugural World T20 in South Africa in 2007, it was just a matter of time.

The Indian Premier League (IPL) soon burst on to the arena, mainly as the now disgraced Lalit Modi’s brainchild. With a mix of high octane T20 action, the game’s biggest superstars and some glamour in the form of Bollywood’s partnership with the league, the tournament rewrote the financials for the game.

Lalit Modi IPL
Lalit Modi was the one who floated the idea of bringing in an Indian Premier League in 2008. Image Courtesy: Getty Images

Cricket, as a sport changed 360*once IPL was born, and from that day of April 2008 onwards, there has been no looking back. The bug of the tournament caught everyone so viciously that today after ten seasons it continues to garner some eye-popping numbers.

Based on the mercurial success garnered by the Indian Premier League (IPL), other cricketing boards too came up with their franchise-based T20 leagues throughout the globe.

As of this moment, there are at least six major T20 leagues across the globe, which have an annual turnover of millions of dollars throughout. The steep increase in the scope of economy and business brought together by the inception of these T20 leagues has tremendously impacted the global economic fundamentals.

The numbers generated by each of the well-known tournaments are simply staggering in nature and adds enormous value to the respective economies. While the relationship between the functioning of a T20 tournament and the overall economy as a whole prospering may seem a little strange, it can be broken down with a little ease.

For instance, consider a tournament as colossal as the Indian Premier League. For eight weeks, you have the best players in the business sweating it out in India and entertaining the audiences.

This, in turn, leads to sheer money getting minted due to jam-packed stadiums in the form of ticket revenues. Well, if a further scope is to be considered, then one cannot ignore the impact on the Hospitality and tourism industry of India. With hundreds of rooms getting booked across several five and seven stars in India for nearly two months, the numbers generated further are dramatic and at the same time staggering.

Thus, what a tournament like the IPL does is, creates a vicious cycle of money moving from one end to the other and which keeps on multiplying on a daily basis.

To understand the well-to-do T20 leagues, its advisable to take a step by step analysis, starting with the biggest fish – the Indian Premier League.

Indian Premier League (IPL):

IPL
The Indian Premier League (IPL) took the world by storm after getting started in 2008. Image Courtesy: Getty Images

On the list of top 5 richest T20 cricketing league comes the cash-rich Indian Premier League. In 2015, Duff and Phelps conducted an in-depth valuation analysis of the IPL as a brand, and if anything, the numbers generated were simply alarming.

The IPL as a brand alone was valued at an eye-popping tally of USD 4.5 billion. Mind you, this figure at present is much more, thanks to the annual compounding and the global economy as a whole prospering with the passage of time.

Call it the extreme high quality of cricket on offer, the marketing genius of the league, or the overall craziness of Indian cricket fans, the league as a whole has simply changed the way in which the game is being played currently.

The episode began in when construction giant DLF bagged the title sponsorship for the first five editions of the tournament. Back then, the total amount bid by DLF to win the rights was INR 200 crore. The numbers went up colossally when soft drink giants PepsiCo entered the fray. For the five seasons commencing from 2013, PepsiCo shelled out INR 396.8 crore to gain the title sponsorship.

However, the tenor of the firm never saw its end, as it abruptly came to a close due to two lucrative franchises in the form of Chennai Super Kings and Rajasthan Royals getting suspended.

Chennai Super Kings Rajasthan Royals IPL
Chennai Super Kings and Rajasthan Royals were banned for two years in 2015 over the match-fixing charges. Image Courtesy: Getty Images

The last couple of seasons have seen mobile heavyweights, Vivo as the title sponsors. The latest bid involved Vivo as the firm won the rights to host the next five seasons for a whopping amount of INR 2199 crore, or IN 439.8 annually.

If these numbers seem high, then be ready to be further jolted, as the figures surrounding the broadcasting rights are simply to the next level. In September 2017, Star India won the broadcasting rights for the subsequent five editions of the coveted tournament for a figure as gigantic as INR 16,347.5 crore. One only wonders the return on investment for Star India as the amount invested in an ocean and if the profits are generated as planned, then saying that the IPL is a cricketing cash cow, remains an understatement.

To answer the question, what makes the IPL the richest cricketing tournament of all time, the answer lies in brief.  First and foremost, it’s the extreme high quality of cricket on offer. If the most sought after and cherished names of the game are turning up for a tournament, then its bound to be the best one. Game after game, you have jam-packed houses witnessing some classical encounters. Jam-packed houses. Does this ring a bell or two?

Well, jam-packed stadiums are just a form of revenues for the IPL franchises. As per the current split, for a “home franchise” split with the local cricket association remains at 80-20. In order to simplify, an example is more than enough.

The Feroz Shah Kotla stadium in Delhi is home of the Delhi Daredevils. Thus, the amount generated by the home games of Delhi is split between the franchise owners and the Delhi District Cricket Association (DDCA). So say, if a ticket costs INR 100 (Just an example!), 80 of that will go to the franchise owners of the Delhi Daredevils, and 20 will go to DDCA. This revenue model holds true for all eight franchises and the sheer masses which occupy the arena, makes it a win-win episode for both, the franchises as well as the domestic cricket associations.

A similar concept holds true for the revenues shared from title and broadcasting sponsorship rights. Till the first five editions of the tournament, the ratio between franchises and the IPL committee remained at 80-20. However, the share now is a little more balanced, with 60% of all revenues attained through title and broadcasting sponsorship being divided between the eight franchise owners and the remainder 40% being earned by the IPL organizers.

Mind you, all these figures DO NOT include the revenues earned indirectly by an array of Indian industries such as Aviation (Travel), Hospitality (Hotels) and the Tourism. Such is the sheer aura and size of the richest cricketing league of the globe.

The table below indicates the brand value (in USD) of the IPL franchises. A point must be noted that since the Chennai Super Kings and the Rajasthan Royals mark their return to the league after two years, it isn’t possible to value them at present. Hence their numbers are ignored.

Team Brand Value (USD)
Mumbai Indians 106
Kolkata Knight Riders 99
Royal Challengers Bangalore 88
Sunrisers Hyderabad 56
Delhi Daredevils 44
Kings XI Punjab 41

 

Not a major source of income, but ultimately, the prize money too plays a critical role in determining the fortunes of a tournament. The total prize money for the IPL stands at INR 40 crore. Out of this 40, 15 is bagged by the winner, while the runner-up gets ten while the teams finishing 3rd and 4th get 7.5 each.

Also, the team wallet as decided by the IPL core committee before the mega-auction, which took place recently in January 2018, stands at INR 82 crore. Out of this 82, it is compulsory for the franchises to spend at least 75% of the allocated amount while buying the players. The purse is expected to further shoot up to INR 85 crore in the 2020 edition of the IPL.

In all, to understand the functioning of the IPL and to cut their earnings short, one can ascertain that the major chunk of the earnings garnered by the IPL comes from its able, efficient and sought after distribution model through ticket sales, the title sponsorship and the broadcasting rights. Not to forget, all of this is only possible due to the extremely high quality of cricket on offer.

  1. Big Bash League (BBL):
Big Bash League
Sydney Sixers had won the inaugural season of Big Bash League in 2011. Image Courtesy: Getty Images

Second on the list of top 5 richest T20 cricketing league is Big Bash League. Originating from Down Under, the once bland league has innovated itself in a significant way and reinvented the form of the sport in Oceania. With fast food giants KFC being the chief sponsors of the league since its inception in 2011, the tournament is highly sought after and more than a lucrative affair for Cricket Australia.

One difference between the IPL and the Big Bash League is that while private entities own franchises or lease, in BBL, it is Cricket Australia who has authority over all franchises and itself looks after the finances and distribution of revenue.

A total of eight city-based franchises battle it out in this tournament, which runs for a good portion of the Australian summer. An eye-catching aspect of this league remains that despite the national team playing its international matches and the first choice players busy with national commitments, the crowd attraction to BBL games remains sky high. As a matter of fact, hardly any games in the tournament witness empty stands and more often than not, jam-packed stands are seen for the BBL.

SOURCE OF INCOME:

Like the IPL, the source of income for BBL can get segregated into two distinct categories, ticket sales and broadcasting rights. The ticket sales on average saw an attendance of 26,531 individuals attending each game for the recent 2017/18 edition. In 2013, Cricket Australia (CA) entered into a contract with the Ten Network to broadcast the matches, for an amount estimated to be at $ 100 mn. The contract was a five-year agreement, and if fundamental experts are anything to go by, the number is set to shoot up once further the next round of discussions are up for the global broadcasting rights of the game.

Speaking of innovation, one has to credit CA for their over the counter thinking style. BBL was the first cricket league to implement electronic bails and stumps. While acts like these may not seem to be too financially viable, they surely enable a far greater brand recall from cricket fans. To add to that, one also has to salute CA for its approach in promoting the sport for women, as the Women’s Big Bash League (WBBL) too is a major hit with the audiences.

Women's Big Bash League
WBBL, the official domestic T20 league for women was the innovation brought in by Cricket Australia. Image Courtesy: Getty Images

WBBL takes place simultaneously with the main league and has the same franchises competing.

PRIZE MONEY:

Speaking about the Prize Money, the winner of the tournament bags $450,000, while the runner-up gets $260,000. The teams finishing third and fourth get $80,000 each.

In all, while BBL may not be able to replicate the sheer amount staggered by the IPL, it surely is a force to reckon with. Considering the fact Australia’s population is barely 1.86% to that of India, one has to credit CA for ably monitoring the tournament and making it a major success in Australia. Not to forget, the quality of matches on offer in the tournament is simply superb!

  1. NATWEST T20 BLAST:
NatWest T20 Blast
NatWest T20 Blast was the first T20 league been played. Image Courtesy: Getty Images

England’s T20 league is third on the list of top 5 richest T20 cricketing leagues in the world. While a comment might be made that the Natwest T20 Blast as a whole is a little outdated, one also has to appreciate the fact that it was the first ever T20 tournament to be conceived.

Nevertheless, considering the England and Wales Cricket Board’s rigid approach in managing the sport in the UK, the league has been far overshadowed by IPL and BBL. With a total of 18 first class counties competing across three months, to go hand in hand with the domestic First Class and List A tournaments, the scheduling is simply a mess. As a result, the viewership numbers for the same are not as high as one would associate with a tournament like the IPL or even the BBL for that matter.

With an extremely complicated domestic structure, in all the ECB earns a total of GBP 5-7 million from broadcasting revenues. In order to make England’s domestic T20 structure far more proactive, the ECB is considering privatizing the league on the lines of the IPL, and making it a city-based franchise affair, rather than the traditional county affair.

A total of eight cities are planned to host the new league, and if this proposal gets passed, one could witness the broadcasting revenues going up by at least three times as a far more exciting structure will simply make it irresistible for the broadcasters. As of now though, the ECB needs to put on its thinking hat and make privatization of the league its priority. If needed, an auction could be held which puts monetary terms far clearer rather than the current player drafting and transfer process.

  1. CARIBBEAN PREMIER LEAGUE (CPL):
Caribbean Premier League
West Indies Cricket Board soon followed the path and inaugurated the Caribbean Premier League in 2013. Image Courtesy: Getty Images

Hailing from the land of inaugural World Cup winners, Caribbean Premier League (CPL) comes fourth on the list of top 5 richest T20 cricketing leagues in the world. Home to the ultimate party holders from the Caribbean, the Caribbean Premier League, has been a major revelation. Once it replaced the old domestic-based Caribbean T20 tournament, the involvement of franchises saw it make a complete change. Following the lines of the IPL, while the league as a whole is governed by the West Indies Cricket Board (WICB),

The title sponsor of the league is Indian automobile company, Hero MotoCorp. Speaking of India, one needs to understand that IPL franchise Kolkata Knight Riders have decent business affiliations with the league. The Shah Rukh Khan-owned Knight Riders also has a major chunk of the Tribango Knight Riders and are a part of the same family.

When the league first commenced in 2013, Virgin airlines owner and the ever flamboyant Richard Branson too got affiliated with the tournament as one of the co-owners. To add more glamour, Hollywood hunk Mark Wahlberg too had an association with the tournament.

Speaking about the primary revenues for the tournament, broadcasting is the main source. The tournament as a whole is witnessed on TV screens in 15 countries, with average global audiences being somewhere close to 208 million annually.

  1. PAKISTAN SUPER LEAGUE (PSL):
Pakistan Super League
Pakistan Super League (PSL) later came on the floor in 2016 and had attracted a lot of attention over a few years. Image Courtesy: Getty Images

Last but not the least, Pakistan Super League (PSL) comes fifth on the list of top 5 richest T20 cricketing leagues in the world. Based on the lines of the IPL, Pakistan wanted a cash-rich T20 league of its own. While the games might not be played in Pakistan (except the finals), the cities of Dubai and Sharjah host the tournament annually.

Having commenced in 2016, the tournament has already been a massive positive for the Pakistan Cricket Board, not just regarding the talent scouted from the league, but even from a financial front.

The teams are based out of the main Pakistani regions, with city-based franchise modelling being used. When the tournament was conceived, the franchises were sold for USD 93 million, with the contract being valid for ten years.

Commencing this year, another franchise has been added, and this has been seen as a move to expand the tournament further.

Franchises:

  1. Peshawar Zalmi
  2. Karachi Kings
  3. Islamabad United
  4. Quetta Gladiators
  5. Multan Sultans
  6. Lahore Qalandars

As per the valuations modelling, the tournament has a market value of USD 300 million, and the number is expected to shoot up in the years to follow. The inaugural edition of the tournament saw the PCB earning an annual profit of USD 2.6 million, and the numbers are eagerly awaited for the editions to follow.

Franchise Valuation:

  1. Multan Sultans – USD 41.6 mn:

The latest entrant into the league, originating out of the Punjab province is the most valued franchise at 41.6 mn. The franchise is owned by Schon Properties and is in an eight-year agreement with the PCB.

  1. Karachi Kings – USD 26 mn:

Emerging out of the busiest city of Pakistan, the heavyweight media group of ARY owns the Karachi Kings franchise. The esteemed franchise is valued at USD 26 million and is based out of Pakistan’s port city of Karachi.

  1. Lahore Qalandars – USD 25 mn:

The franchise owned by Qatar Lubricants Company is valued at USD 25 million and is owned by the company’s Managing Director Fawad Rana.

Peshawar Zalmi – USD 16 mn:

The franchise owned mainly by Javed Afridi, and Haier Pakistan is valued at USD 16 million and remains a crowd favourite. Being based out of the tribal areas of Pakistan gives this team a bigger competitive edge than the other franchises, as the interest garnered in the rural areas of Pakistan is quite huge.

  1. Islamabad United – USD 15 mn:

Leonine Global Sports owns the franchise which is based out of the Pakistani capital. Valued at a decent figure of USD 15 million, the presence of icon Misbah Ul Haq has a big role behind the fan following of this team.

  1. Quetta Gladiators – USD 11 mn:

The lowest valued franchise on paper is the Quetta Gladiators team, which is led by Pakistan’s captain Sarfaraz Ahmed. The team is owned by Omar Associates and has ended up as the runner-up on both the editions of the tournament.

As a whole, the success achieved by PSL has been quite good. However, with the tournament being placed in the Middle East, the PCB is losing out millions due to high maintenance costs and an extremely dismal crowd turnover. Several afternoon games are witnessed barely by a thousand people, and these numbers are dismal for any league.

If the tournament is to survive for the long term, the only way for it to sustain would be to function in Pakistan, where packed houses would witness each game. By doing so, PSL would surely capitalise on ticket sales as well.

The table below gives us a financial summary of all the vital numbers for the above-mentioned T20 Leagues.It must be noted that these numbers are taken from secondary sources, available all over the internet, and this website does not guarantee its true authenticity.

League Brand Value Combined Prize Money Combined Team Purse Broadcasting Rights
IPL $4.16 bn $6.1mn $98.36mn $3.2bn
BBL $2.8mn $16mn $100mn
Natwest T20 Blast $2.6mn $45mn $120mn
CPL $ 102 mn $1mn $4.8mn
PSL $ 150 mn $1mn $7.2 mn

 

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