WIPL Team Bid: BCCI set for another 4000 cr windfall

The BCCI is all set to get richer by at least Rs 4000 crore with some of the top business houses set to bid aggressively for the five Womens IPL WIPL teams that would be auctioned on WednesdayAccording to market experts the teams are expected to shell out in the range of 500 to 600 crore INR per team in the closedbid auctionWIPL has huge potential but most of the legacy teams would like to mix optimism with pragmatism an industry insider who has previously worked on mens IPL team bid told PTI ahead of auctionExpect a few bids in the range of Rs 500 crore upwards Rs 800 crore plus could be a bit ambitious but BCCI wont complain he addedMore than 30 odd companies have bought the bid documents worth Rs 5 lakh including all the 10 mens IPL team Wellknown corporate houses such as Adani group Torrent group Haldirams Prabhuji Capri Global Kotak and Aditya Birla Group have also shown interest in buying a teamSome of these companies were unsuccessful when BCCI invited bids for two new mens teams in 2021Among the traditional IPL teams Mumbai Indians Rajasthan Royals Delhi Capitals KKR could seriously contemplate to add to the bouquet of their already existing mens teams across the globeAlso readHarmanpreet Kaur hails new era as Womenrsquos IPL rights fetch Rs 951 croreAccording to market insiders there are two principles on which these bids are placed by the business housesFirst one is Return on Investment ROI which is the core principal of any business It is profit on what an entity spendsThe second one isnt a business principle as such but in business community they call it Return of EgoThis 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 touching breakeven pointIts about wanting to purchase something at any costAn existing IPL franchise with its steady revenue stream in place can afford to bleed a bit more in initial years which is imperativeA former IPL franchisee official who had once worked on bids explained the rationale which goes into the biddingLets say a franchise makes a winning bid of Rs 500 crore for a period of five years Now thats Rs 100 crore committed straightaway for each of next five years the source explainedNow what will be source of earning for the franchisesThe BCCI distributes its media broadcast revenue which is one of the major earning chunk The second is a share from BCCIs central pool of sponsorship The third is a franchisees own set of sponsorship earnings Fourth is gate sales money earned from tickets he elaboratedSo what could be a franchisees earning from WIPLs media revenue poolThe BCCI in case of Womens IPL is going to share 80 percent of media rights money with the teams in case of men its 5050 to help them develop a sustainable modelSo what will be the mathematics over here 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 croreLets make it a round figure of Rs 150 crore Thats what each franchise gets over a period of five years which approximately Rs 30 crore per annum he explainedNow 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 franchisees own revenue pool also So it could be anything between Rs 15 to Rs 18 crore per year Gate sales wont earn you a great deal in first year he saidSo the per year earning for a team is expected to be Rs 50 croreNow apart from Rs 100 crore franchisee fee per year what will be the other expensesThere is a salary cap of Rs 12 crore for the squad Add another 6 to 8 crore on salary of support staff Lets make it Rs 20 crore Add the hotel expenses fees paid to state associations for stadium and other operational costs It could be anything between Rs 6 to 8 crore First year single city would reduce expensesSo the cumulative expenses per year could be Rs 128 to Rs 130 crore The earnings would be around Rs 50 crore So there is a chance during first few years there would be a loss of Rs 50 crore or more he explainedHerein lies the catchThe legacy franchises MIPL are better placed to offset these losses as they are already making profits after 15 years of IPL They will club their mens and womens team together and perhaps quickly make the profit zone the official addedThe fiveteam WIPL will be played in the month of March in Mumbai at a couple of venuesThis story has been sourced from a third party syndicated feed agencies Midday accepts no responsibility or liability for its dependability trustworthiness reliability and data of the text Midday managementmiddaycom reserves the sole right to alter delete or remove without notice the content in its absolute discretion for any reason whatsoever