IMPACT OF IPL ON THE INDIAN ECONOMY

The Indian Premier League (IPL) stands as a professional Twenty20 cricket league in India that has significantly contributed to the nation’s economy since its establishment in 2008. 

According to a 2015 report by KPMG, the IPL’s impact on the Indian economy was estimated to be around INR 11.5 Billion (~ USD 160 million) in 2015. However, it is crucial to acknowledge that this figure represents an estimation and not a precise reflection of the IPL’s contribution to the Indian GDP which saw a manifold increase from 2015 to 2023. 

HOW MUCH DOES IPL EARN?

The revenue generated by IPL 2023 has surged to an amount of Rs 9,978 Crore, with each match contributing 130 Crore. IPL has proven to be a lucrative venture for BCCI, owing to its substantial earnings. With its widespread appeal, IPL continues to expand its reach and impact with each passing year. At present, IPL stands as the most affluent cricket league globally, surpassing even prominent American sports leagues in terms of both popularity and financial prowess.

Approximately half of India’s population eagerly anticipates the commencement of IPL each year. Their enthusiasm has catapulted IPL’s profits by an impressive twelvefold increment. If we dissect this growth into average annual revenues, the sale of media rights brought in Rs. 820 crore in 2008. Soaring to an impressive Rs 9,978 crore in 2023.

IPL has emerged as the BCCI’s most triumphant venture. In the fiscal year 2006-07, BCCI garnered earnings amounting to Rs 651.81 crores. In the fiscal year 2021–2022, the amount increased to Rs 4,360 crores, with the IPL accounting for almost Rs 2,200 crore of this total.

Let us delve into the diverse avenues through which the IPL enriches the country’s economy:

1. Media Exposure and Viewership: According to data collected by the Economic Times of India, the T20 extravaganza achieved remarkable milestones in viewership during the 2019 season,  witnessing a record-breaking 462 million viewership instances, accumulating watch time of 338 billion minutes. Fast forward to 2023, the cricketing spectacle broadcasted on the Star Sports Network garnered a staggering 505 million viewers, as verified by the Broadcast Audience Research Council (BARC) India. The significant contribution from Hindi-speaking markets, accounts for 334 million viewers, marking a remarkable 47 per cent increase from the preceding year. The tournament’s allure extended to the younger demographic, evidenced by a 64 percent surge in their viewership. Notably, the high-definition (HD) broadcast of the tournament on Star Sports HD channels drew in viewership of 101 million, tripling last year’s figures. The cricketing league has garnered sponsorship from internationally renowned corporations, including but not limited to Coca-Cola, Maruti Suzuki, PhonePe, and MRF.

2. Enhancement of the Tourism Sector: As a pivotal catalyst for the Indian tourism industry, IPL draws a substantial influx of foreign tourists to India annually, allured by the prospect of witnessing their favourite cricket stars in action. By enabling people to journey to various corners of India for match spectating, the league has spurred local tourism. A vivid example of this is seen in the data shared by renowned travel company Cox & Kings in 2019, which highlighted an astonishing 30 percent surge in travel revenue attributable to the IPL.

3. Advancement of Infrastructure: The IPL’s requisites extend to the establishment of world-class stadiums and state-of-the-art facilities, fostering their development across the nation. This endeavour has not only elevated the caliber of sporting infrastructure but has also generated employment opportunities.

4. Generation of Employment: The Indian Premier League stands as a robust engine of employment. It engenders a myriad of job opportunities, spanning cricketers, support staff, groundskeepers, security personnel, and hospitality staff. The league’s influence spans across industries, encompassing companies, stakeholders, sports personalities, aspiring athletes, and more. Citing the UN General Assembly report on Peace and Development, the IPL’s economic worth is quantified at a substantial USD 3.2 billion. This influence further reverberates in the sporting goods market, which has swelled to INR 40 billion. 

5. Upsurge in Tax Contributions: Prior to the advent of the IPL, the BCCI enjoyed a status akin to a charitable organization, exempt from taxation. With the categorization of IPL as a commercial enterprise, the BCCI was obligated to make tax contributions. Throughout the cricketing competition’s existence, the BCCI has significantly bolstered the tax coffers through its tax payments.

    

Losses BCCI can incur due to the cancellation of IPL

As per Duff & Phelps, the assessed brand worth of the IPL stood at INR 475 billion (~ USD 6.7 billion) in the year 2019.

In the event of a complete cancellation of the IPL, the BCCI (exclusively) could potentially incur a substantial financial setback, amounting to INR 3,869.5 crore. This encompassing figure includes the subsequent components:

• The cessation of broadcast and streaming revenues would account for a loss of INR 3,269.5 Crore.

• The forfeiture of central sponsorship translates to a deficit of INR 200 crores.

• The withdrawal of title sponsorship would contribute to a shortfall of INR 400 crores.

Star India, within a five-year period, secured the media rights to the IPL for a substantial sum of Rs 16,347.5 crore, while Vivo, also within a five-year span, acquired the title sponsorship at a value of Rs 2,000 crore.

Beyond this, the IPL matches also give rise to numerous additional avenues for employment materializing through the sale of team jerseys, caps, and merchandise, as well as through increased bookings in the hotel and restaurant sector which would be at a loss.

Please note that all the figures presented in the loss section pertain to the COVID-19 period, as it marked the first instance when the possibility of an entire IPL season cancellation emerged.

CONCLUSION

To conclude, it is evident that the Indian Premier League (IPL) holds a substantial influence on India’s GDP. Beyond its role as a mere sporting event, the IPL wields economic influence through avenues such as tourism, advertising, and associated industries. While it enhances employment prospects and fosters entrepreneurial endeavours, maintaining a comprehensive set of policies becomes pivotal for ensuring well-rounded development. This intricate interplay between the IPL and the GDP casts a spotlight on the economic potentials inherent in the realms of sports and entertainment. As the IPL continues to evolve, its enduring impact on the GDP remains a captivating subject, underscoring India’s adeptness at seamlessly blending passion with economic advancement.