Why IPL player pay has not grown in sync with BCCI and franchise revenue?

Rohit Sharma and Hardik Pandya of Mumbai Indians get Rs 15 and 16 crore respectively. That amounts to huge sums in comparison to all sports in India. Given that it is only for hardly three months of cricket, it is exceedingly huge. However, what we are seeing in terms of players' salary is only the tip of the iceberg when it comes to money being made by the Indian Premier League franchise and the parent body, the Board of Control for Cricket in India (BCCI).

Exponential Increase in Broadcasting Rights

The BCCI gets its major share of the IPL revenues from the broadcasting rights which has gone through the roof since the start of the league in 2008 now till the latest five-year deal signed in 2023. According to a Livemint report, in 2011, the broadcaster Star Sports paid Rs 820 crore a year for a six-year deal. In 2018, it was Rs 3270 crore per year for a five-year deal and then in 2023 the combined deal for TV, digital rights gave BCCI a whopping Rs 9768 crore a year for the IPL.

How Are Franchises Growing?

Since the 10 franchises get 590 per cent of the total share of the revenue generated by IPL, be it via the broadcast rights or the sponsorship deals, they are bound to get richer with every broadcast deal cycle. While the broadcasting rights have grown at a Year on Year 23 per cent rate, the franchises' own value has increased exponentially too.

According to a report by Brand Finance, "Lucknow Super Giants (LSG)'s' valuation increased at 48 per cent between 2022 and 2023. Even the entire value of IPL has grown at 433% from 2008 to 2023 to be valued at Rs 89,000 crore.

What About the Players' Salary?

Though the players' salary looks handsome as the entire IPL is run on the gimmicks of auctions, when it comes to the growth of the salaries in proportion to the growth of the brand value of the league, BCCI, and franchises, it is not at all at par.

According to the Livemint's story, the Kolkata Knight Riders (KKR), Royal Challengers Bengaluru (RCB), and MI paid only 33 per cent of their total revenue as players' salary. It was during the 2022-23 season, With the IPL's broadcast share jumping a huge amount, the percentage of revenue being used as players' salary by IPL teams would fall further below 33.

This, when compared to football leagues in Europe or the sports leagues in the USA, is significantly low. While Ligue 1 clubs devote nearly 87 per cent of their revenues to players' salary, English Premier League clubs contribute 67 per cent.

While the value of IPL has increased by 433%, the salary cap of the franchise has only increased from Rs 20 crore in 2008 to Rs 100 crore in 2024.