Sourav GangulyApart from the initial fee of Rs 36 crore (US$9m) per franchise per year, the annual operating costs to run an IPL campaign are expected to be in the range of Rs 40-50 crore (US$10-12.5m). The franchises will also receive a share of media rights sales, title sponsorship and ground signage earnings (See graphic: The owners).

Their additional income will come from team shirt sponsors, 12 signs out of 72 in their home ground, ticket sales (at best Rs 50 lakh/$125,000 per game, adding up to Rs 3.5 crore/US$875,000 per IPL season) and team merchandising, but profits are not expected in the first few years.

IPL though is not about profits or even about cricket, says Samir Kale, managing director, media consultancy CMCG. “This is a valuation game.

The value of a franchise is based not on cricket but what you can realise from it a few years later,” he adds. In this scenario, many who believe that the franchises have made a wise investment. Anirban Das Blah, CEO of Globosport, maintains, “In about five years’ time, for the Mumbai franchise to attract twice its price today will not be a problem.”

The presence of BCCI vice-president N. Srinivasan in India Cements’ winning bid in Chennai and IPL Chairman Lalit Modi’s personal friendship with key backers in three (Mohali, Kolkata and Jaipur) of the eight bids are raising eyebrows and whispers