The Women’s IPL (WIPL) is set to rake in at least Rs. 4,000 crores for the BCCI as top business houses are set to bid aggressively for the five Women’s IPL (WIPL) teams up for auction on Wednesday.
Market experts say that the teams are expected to shell out in the ‘range of 500 to 600 crore INR’ per team in the closed-bid auction.
Industry insiders believe the WIPL to be full of huge potential and expect a “few bids” in the Rs 500 crore range, adding that upwards of Rs 800 crore would be a bit ambitious but not totally unexpected.
Corporate giants such as Adani group, Torrent group, Haldiram’s Prabhuji, Capri Global, Kotak and Aditya Birla Group have shown interest in buying a team. They are among at least 30 companies who have bought the bid documents worth Rs 5 lakh including all the 10 men’s IPL teams.
Some of these companies were unsuccessful when BCCI invited bids for two new men’s teams in 2021.
Among the traditional IPL teams, Mumbai Indians, Rajasthan Royals, Delhi Capitals, KKR could seriously contemplate to add to the bouquet of their already existing men’s teams across the globe.
Market insiders say, there are two principles according to which the bids are place by business houses.
First is ‘Return on Investment’ (ROI)- the core principle of any business. It is profit on what an entity spends.
The second one isn’t a business principle as such but in business community they call it ‘Return of Ego’, which is something where some of the biggest business names are ready to shell out any amount if they have their eyes on buying a particular property. Even if it takes five to seven years for breaking even.
It’s about wanting to purchase something at any cost. An existing IPL franchise with its ‘steady revenue stream’ in place can afford to ‘bleed’ a bit more in initial years which is imperative.
A report quoted a former IPL franchisee official, who once worked on bids, explained the mindset behind the bidding process.
He said that the major earning chunk for a franchise comes from the BCCI media broadcast revenue which is distributed. Second is a is a share from BCCI’s central pool of sponsorship, while third is a franchisee’s own set of sponsorship earnings. Fourth is gate sales, money earned from tickets.
According to the official, the in case of Women’s IPL, the BCCI is going to share 80 percent of media rights money with the teams as opposed to the 50-50 arrangement it has with the men’s IPL teams.
So, if 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 crore is 152 crore, is what the franchise gets over a period of five years which approximately Rs 30 crore per annum, he explained.
Elaborating further, he added that 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 franchisee’s own revenue pool also. So it could be anything between Rs 15 to Rs 18 crore per year.
This takes up the yearly earnings for a team around Rs 50 crore.
The official elaborated on the expected yearly expenses of a team including the Rs 100 crore franchisee fee to be around Rs 130 crore, so the franchise owners can expect a loss in the orbit of Rs 50 crore or more for the next few years.It
However, he adds, the catch is that the legacy men’s IPL franchises 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 team together and perhaps quickly make the profit zone.
The five-team WIPL will be played in the month of March in Mumbai at a couple of venues.