The IPL works on a franchise-system based on the American style of hiring players and transfers.
These franchises were put for auction, where the highest bidder won the rights to own the team, representing each city. The auction took place on January 24, 2008 and the total base price for the auction was $400 million. The auction went on to fetch $723.59 million.

Media rights
On January 14th, the IPL announced that a consortium consisting of India’s Sony Entertainment Television network and Singapore-based WSG (World Sports Group) had secured the media rights for the Indian Premier League. The deal has a duration of 10 years at a cost of $1.026 billion. And as a part of the deal, the consortium will pay the BCCI $918 million for the telecast rights and $108 million for the promotion of the tournament

Title Sponsorship Rights

Gurgaon based real-estate developer DLF Universal secured the exclusive rights to the Indian Premier League’s title sponsorship worth INR 200 crore (over $50 million) for a period of five years.

The sponsors are queuing up at the gates of the Indian Premier League, and projections are turning into fat cheques. The IPL central revenues were hovering on the 500-crore mark and still the dust hasn’t settled.

The latest to come on board are Kingfisher Airlines, who have paid 106 crore to become official umpire partners for the tournament

The cola wars fuelled the next bonanza as PepsiCo forked out 50 crore to become official beverage partners of the tournament.

What these deals do is lessen the financial burden on individual franchisees each of whom receive 80% of central revenues for the first five years. A number-cruncher closely monitoring IPL finances believed that each franchise would end up getting close to Rs 28 crore annually for the first five years, from these central revenues.

In addition to this franchisees have 100% rights over local revenues, which include gate receipts, team shirt sponsorships, merchandising, local sponsorship and licensing, hospitality and match day promotions.

The prize money distribution is such that even the two losing semi-finalists will earn in crores (Rs 1.2 crore) for their efforts.

The prize money will then be divided among the other teams with the team finishing fifth collecting Rs 80 lakh, while the sixth finisher will earn Rs 70 lakh.

The team finishing seventh on the league table will get Rs 50 lakh.

The IPL will kick off with Shah Rukh Khan’s Kolkata Knight Riders taking on Vijay Mallya’s Bangalore Royal Challengers at the Chinnaswamy Stadium at Bangalore.

The inaugural season will will have 59 matches spread over 44 days.

 

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