Both Knight Riders and Rajasthan Royals are expected to make a profit of Rs 5-10 crore in the first year.
Kolkata Knight Riders was initially expected to make profits in excess of Rs 15 crore in the first IPL year, but due to the new tax structures and security fee it had to shell out in West Bengal, its expenses shot up.
The Emerging Media Group, which owns Rajasthan Royals, the Indian Premier League (IPL) champions, is expected to not only break even this year but also make a profit of Rs 5-10 crore, led by local sponsorships and gate ticket sales.
This is also because Emerging Media bid a mere Rs 27 crore as the annual franchisee fee to become the least expensive franchise in the eight-team IPL.
It also bought the least expensive players during the IPL auction which fetched them admirable dividends in the end.
Mohammad Kaif was Rajasthan Royals most expensive player who came for $675,000, while captain-cum-coach Shane Warne was bought for $450,000.
Shane Watson, one of the most valuable players for Rajasthan Royals, came at $125,000, while tournament's highest wicket-taker Tanvir was bought for just $100,000.
Others like Graeme Smith and Yusuf Pathan were bought for $475,000 each.
According to industry analysts, Rajasthan Royals is expected to earn around Rs 15 crore from local sponsorships and Rs 5-10 crore from gate ticket sales in the first IPL season itself.
According to Fraser Castellino, CEO of Emerging Media, "We will try to build on local loyalties and CSR initiatives like community programmes by the cricketers, supporting local charities, and even setting up talent academies, in an attempt to keep the brand alive even after the first IPL season is over."
The other team, Shah Rukh Khan-owned Kolkata Knight Riders, is also expected to make profits in the first IPL year.
Kolkata Knight Riders is projected to make an operating profit of Rs 8-10 crore due to its huge earnings from local sponsorship of around Rs 30 crore, and gate ticket sales of Rs 20 crore.
According to Shah Rukh Khan, "Going forward, we will build on online games and newer merchandising options to keep the Kolkata Knight Riders brand alive even after the IPL season is over."
Rajasthan Royals expenses for the first year include franchise fees of Rs 27 crore, team fee of around Rs 12 crore, advertising fee of close to Rs 8 crore, and administration fee of another Rs 5 crore.
Kolkata Knight Riders expenses for the first year include franchise fee of Rs 31 crore, team fee of close to Rs 25 crore, advertising fee of around Rs 20 crore, and administration fee of close to Rs 6 crore.
All teams get Rs 32 crore from Set Max and DLF.
