Beyond the Boundary: Examining the IPL's success and future
- Dr Bidit Dey
- May 14
- 8 min read
Executive Summary:
Despite a decline in cricket's popularity in many parts of the world, South Asia, particularly India, remains steadfastly loyal to the sport, which is deeply rooted in the region’s colonial past. Over the years, cricket has encountered various existential challenges, including the prolonged format of the game, competition from other globally popular sports, and match-fixing scandals. Nonetheless, the sport has shown resilience by embracing innovation and addressing governance issues while developing profitable business models to ensure sustainability. The Indian Premier League (IPL) is a striking example of such initiatives. Built upon the enduring popularity of the shorter format of cricket, the IPL has been developed through a franchising business model. Since its inception, it has steadily grown, boasting a brand value of approximately $10 billion and establishing itself as a formidable financial powerhouse in the sports arena. The tournament's immense appeal within India and among millions of Indian expatriates worldwide, combined with its innovative format, impressive marketing campaigns, synergy with Bollywood, and a professional governance framework, contributes to its success. However, the IPL and cricket continue to grapple with challenges such as corruption scandals and the struggle to meet the increasing number of games to cater to global demand. This article explores these issues by examining the historical context of cricket, the emergence and recent accomplishments of the IPL, and the challenges and opportunities that lie ahead.
Introduction:
With a population of nearly 1.5 billion, India is the most populous country in the world. It is also emerging as a regional powerhouse in industrial and economic development. The nation is home to diverse people, characterized by their religious, linguistic, and ethnic identities. Despite these differences, cricket is a unifying interest for this vast population. For millions of Indians, cricket is not merely a sport but a passion and, in many ways, a religion. Furthermore, it has evolved into a significant business. Much like the NBA and NFL in the United States, or football in major European nations, cricket in India holds considerable commercial value, thanks to various revenue streams including the Indian Premier League (IPL), media rights, and bilateral series. In the 2024 financial year, the Indian cricket industry generated a total revenue of $2.47 billion USD, marking an impressive 25% increase compared to the previous year. The Board of Control for Cricket in India (BCCI) stands as the wealthiest among cricketing nations, with revenues surpassing those of the second (Cricket Australia) and third (England and Wales Cricket Board) largest boards combined.
History of cricket around the world and its position in India:
The precise origin of cricket remains unclear, but it is believed that the earliest reference to the sport dates back to the 13th century. Cricket began in the rural areas of southeastern England, initially as a children's game, before gradually gaining popularity among adults. By the 18th century, it had evolved into a favored pastime across various regions in England and its colonies. In 1788, the Marylebone Cricket Club (MCC) formalized the rules of the game. Due to its roots in Great Britain, cricket quickly spread through the British colonies worldwide, particularly in South Asia, Australia, parts of Africa, and the Caribbean Islands.
The colonial legacy has significantly shaped the enduring popularity of cricket in the post-colonial world, particularly in the Commonwealth nations. Among these, South Asia exhibits the most fervent support for the sport. Countries such as India, Pakistan, Sri Lanka, and Bangladesh directly inherited cricket's popularity from the colonial era. Furthermore, Afghan refugees in Pakistan reintroduced the sport to their homeland, helping to establish its growing popularity there. Additionally, the intense national rivalry between India and Pakistan often transcends into a fierce cricket rivalry, making it one of the most competitive international sporting contests globally.
Cricket's nature, format, and supporting infrastructure have undergone significant changes over time. Although transformation is a common aspect of most sports, cricket's evolution is particularly linked to colonial relations and political and economic shifts in recent years. During the colonial period, cricket was an elitist pastime, primarily enjoyed by feudal lords. This legacy persisted in England for an extended period. However, with the independence of former colonies, the sport began to garner popularity among the general populace. Political turmoil in various cricket-playing nations has also impacted the sport. For instance, South Africa faced international boycotts during the Apartheid regime, while the Australian cricket team declined to travel to Sri Lanka for the 1996 World Cup due to security concerns. Additionally, the Sri Lankan cricket team were subject to a terrorist attack in Pakistan in 2009. Nevertheless, the enduring political tensions and recurring conflicts between India and Pakistan—two of the largest cricket-playing nations—have remained a persistent source of contention over the sport.
Figure 1 illustrates the varying degrees of cricket's popularity across different countries. The four major South Asian nations demonstrate an increase in interest, with Sri Lanka and Bangladesh topping the chart. Bangladesh achieved Test status—an esteemed recognition for competing in Test cricket—in the early 2000s, which accounts for a significant rise in its popularity. Cricket has consistently been the leading sport in India and Pakistan; therefore, the increase in these countries is relatively modest. Meanwhile, all other nations have witnessed a decline in cricket's popularity.
Over the past fifty years, cricket has undergone a significant transformation. The traditional longer formats, such as five-day Test cricket, faced an existential crisis. In response, the shorter format of cricket was explored, and by the 1980s, one-day limited-overs cricket gained widespread popularity. However, this format was still perceived as lengthy compared to other globally popular sports like football. With the dawn of the new century, innovations in cricket accelerated, leading to the introduction of the 20-20 format. Simultaneously, franchised league structures emerged across all cricket-playing nations, drawing inspiration from the business models of the NBA and the English Premier League. Amongst all these leagues, the Indian Premier League (IPL) is the most popular and richest in terms of its financial involvement.
Cricket’s business significance in India:
As stated earlier, the Board of Control for Cricket in India (BCCI) is widely acknowledged as the most affluent governing body in the global cricket landscape. The revenues generated from the sale of broadcasting and digital streaming rights for matches, particularly the Indian Premier League (IPL) and international contests, constitute a substantial income stream. For example, the media rights for the IPL were sold for approximately $6.2 billion for the period spanning from 2023 to 2027. Numerous corporations invest significant amounts to sponsor the Indian national team, the IPL, and individual players. Notably, IDFC First serves as the title sponsor for all international and domestic home matches organized by the BCCI. Dream11 holds the primary sponsorship for team branding, while Adidas supplies the team kits. Additionally, ticket sales for both international and domestic events, particularly those affiliated with the IPL, are crucial for revenue generation. The sale of official team jerseys, cricket equipment, and various merchandise contributes to income through both online platforms and physical retail channels.
The BCCI allocates a portion of the revenues obtained from the IPL to the franchise teams, retaining the remainder for its own operations. In return, the franchises remit a portion of their earnings back to the BCCI. Furthermore, the International Cricket Council (ICC) distributes a substantial portion of its revenue to the BCCI, predominantly due to India's considerable viewership, which accounts for roughly 80-85% of global cricket event audiences.
Franchise teams are integral to the business model of the IPL and are owned by a combination of private individuals and corporate entities. These teams enjoy autonomy, enabling them to pursue their objectives and generate revenue through various channels, including lucrative sponsorship agreements, merchandise sales, and ticket sales that attract enthusiastic spectators to the venues. However, managing these franchises entails significant expenditures, including substantial investments in player salaries to secure elite talent and operational costs associated with effective team management. The BCCI excels in its capacity to generate significant revenue by negotiating sponsorship arrangements and securing lucrative media rights. This intricate relationship among franchises, sponsorship entities, and the governing body fosters a collaborative ecosystem that effectively nurtures and sustains the league.
The Indian Premier League (IPL) – from inception to the current stage:
IPL is by far the most popular franchised cricket league in the world. The top players from the major Test-playing nations play for the IPL teams. However, due to political tension between India and Pakistan, the players of the latter country are barred from taking part in the IPL. Over the years, IPL has significantly contributed to developing cricketing infrastructure and popular engagement in India.
Last year, the IPL's overall brand value exceeded the $10 billion threshold, reaching an impressive $10.7 billion. This marks a significant 28% increase from the IPL's valuation of $8.4 billion in 2022. For context, the total brand value of the English Premier League in football stands at $9.9 billion, making it the wealthiest among the top five European leagues[i].
IPL controversies:
Cricket has faced numerous match-fixing controversies throughout its history. Prominent figures such as Hansie Cronje, Mohammad Azharuddin, and Salim Malik are among those who have received bans for their involvement in such activities. The Indian Premier League (IPL) is not exempt from this scrutiny; the tournament has been marred by controversy since its inception. There have been multiple incidents of financial irregularities and allegations of spot-fixing. In 2013, three players from the Rajasthan Royals, including former Indian national team player S. Sreesanth, were arrested on spot-fixing charges. Further investigations uncovered team owners' involvement in illegal betting, resulting in the two-year suspension of the Chennai Super Kings and Rajasthan Royals franchises. One of the most significant controversies surrounding the IPL is linked to Mr Lalit Modi, the founder of IPL. He was banned for life from cricket-related activities due to financial irregularities, misuse of power, and money laundering.
Moving forward – the future of the IPL:
Despite ongoing controversies and a decline in global support for cricket, the IPL is anticipated to remain resilient and continue its growth trajectory. It draws not only on its strong local fanbase in India but also on the global South Asian diaspora, which enhances its popularity in regions such as the UK, US, Middle East, and Australia, contributing significantly to the tournament's expansion. Furthermore, the IPL's commitment to continuous innovation, by introducing new formats and features, ensures it avoids stagnation and stays ahead of the competition, thus capturing the interest of a younger generation.
Since its inception, the IPL has effectively leveraged its connection with Bollywood, the Indian film industry. Prominent Bollywood figures, including Shah Rukh Khan, have actively participated in owning franchise clubs. As mentioned, the IPL's financial model is robust and sustainable, ranking its media rights deals among the most lucrative global sports. Although the tournament's initial ownership and governance faced controversies, it successfully navigated these challenges. There is a consensus that the current governance now exhibits a more professional and transparent approach to managing and leading the tournament, which is essential given its attraction to unscrupulous business entities.
Nevertheless, significant challenges persist within this sport. Like many others, there is often a temptation for unregulated expansion through an increased number of matches, which can lead to player fatigue and fitness concerns—factors that are generally viewed as detrimental to both the sport's future and the players' well-being. The IPL faces formidable competition from global sports, especially European soccer leagues, popular among younger Indians and their diasporic communities worldwide. While challenges are inevitable, the league has proven its resilience and possesses the essential elements for ongoing success and growth as one of the premier sporting leagues globally.
Dr Bidit L. Dey
Associate Professor in Marketing
Sheffield University Management School (the University of Sheffield), UK
LinkedIn: Bidit Dey | LinkedIn
