Understanding the IPL’s financial levers

Raghuvir Srinivasan, writing in the Hindu's Business Line website, says that the IPL’s financial structuring remains a mystery to the larger public who heard and read about the astronomical sums that a Dhoni or a Symonds was bought for. Srinivasan draws up two simple tables and analyses the way the IPL has been structured, sizing up the main revenue streams for the franchisees - the sale of broadcast rights, sponsorship, gate receipts in matches at their home grounds and team sponsorship - with two big ticket expenses - player costs and the franchise fee payable to IPL - before asking the question: will the franchises break even in the first year itself? Read on to learn more.

Besides, trading of players could start in right earnest, especially if the BCCI decides to remove the cap of $5 million that is now placed on player purchase. The final proof of the success of IPL will come when the franchisees decide to list their teams. This is a live possibility at least by the third year of the IPL, which is 2010, assuming the concept succeeds.

The more successful teams could be prime candidates for listing, especially if player trading takes off aggressively. That is when the franchisees will feel the need for more capital and what better place to raise it than the stock market.

Sharda Ugra, the deputy editor India Today, says the Royal Challengers owner Vijay Mallya has responded to his team's defeats like a disgruntled fan.