Undoubtedly, many Indian Premier League (IPL) players secure lucrative deals. For example, the most valuable deals for the 2024 season are Rs 24.75 Crore for Mitchell Starc with the Kolkata Knight Riders (KKR), Rs 20.50 Crore for Pat Cummins with the Sunrisers Hyderabad (SRH), and Rs 14 Crore for Daryl Mitchell with Chennai Super Kings (CSK).
However, considering these deals in the context of the IPL’s wealth, there is an argument that players are underpaid. The players believe this, and many have spoken out about the situation. When analyzing this argument, it helps to start by looking at the IPL’s wealth and the media rights that contribute to it.
According to Jefferies’ research, the IPL is now only surpassed by the National Football League (NFL) in the US in terms of per-match value. Jefferies estimates that this value is $15.5 million for the IPL. This value reflects the vast increase in media and broadcasting rights, which sold for Rs 8000 Crore for a 10-year cycle in the early days of the IPL and most recently sold for Rs 48,390 Crore for five years. The market value of the IPL is well above what was envisioned when the league began in 2008.
IPL player salaries are not rising as quickly as the value of media rights
Comparing the trajectory of player salaries across the same period shows that they have risen far slower than the IPL’s value. The salary cap per team in 2008 was Rs 20 Crore, and today, it’s between Rs 120 Crore and Rs 140 Crore.
So, while some IPL players have become millionaires, they are still poorly paid compared to stars of top global sports leagues like the English Premier League (EPL), La Liga, the NHL, MLB, and NBA. Standard practice in these big leagues is to pay players at least 50% of revenue. In the EPL, the pay rate is as high as 70% of revenue. In the IPL, the players are paid around 17% of revenue, which is significantly less.
The CEO of the Federation of International Cricketers’ Associations (FICA), Tom Moffat, expressed a wish for the situation to change and for players’ wages to be more reflective of IPL revenue. However, FICA cannot directly affect the situation due to the current lack of collective bargaining in the IPL.
The collective bargaining situation is partly to blame for the discrepancy in player earnings. It means that the power balance tends to be tipped towards cricket’s governing body, the Board of Control for Cricket in India, rather than the players. This results in no influence from organizations like FICA that represent players globally.
Sponsorship also brings money into the IPL and could impact player salaries
Media rights are not the only means of making money for the IPL. Sponsorship also has a vital role to play. While profitable sponsorship deals are not guaranteed to lead to higher earnings for players, they do increase revenue figures for IPL teams, which may make it more likely that earnings will catch up with other international sports leagues in the future.
Top sponsorship deals for the IPL in 2024 include Slice for the Mumbai Indians, TVS Eurogrip for the Chennai Super Kings, and Dream 11 for the Kolkata Knight Riders (KKR), Gujarat Titans (GT), and Punjab Kings (PBKS). Dream 11 was also announced as the Indian national cricket team’s lead sponsor starting in 2023.
The fantasy sports gaming platform is a profitable sponsor due to its high popularity levels and significant reach across social media platforms like Facebook and Instagram. The platform is also interesting when considering the future of IPL sponsorship due to its similarity to sports betting.
While sports betting is yet to be legalized in India, popular sports betting companies will likely play a major role in IPL sponsorship if the situation changes. If legalization happens, it will open the door for these companies to dominate due to the crossover in popularity of cricket and cricket betting that already exists in India as fans use offshore sports betting sites to place wagers.
The example of American sponsorship deals shows what could happen in India. Famous sports betting brands like FanDuel, DraftKings, and Caesars Entertainment have various sponsorship deals in place. For example, DraftKings has an agreement with the Ultimate Fighting Championship (UFC) worth $350 million over five years. All three betting brands mentioned have deals worth over $40 million annually with the National Football League (NFL).
If sports betting is legalized in India, there is an obvious opportunity for Indian-based brands to sponsor IPL teams in much the same way that Dream 11 does. This could lead to further rocketing revenues in the league, which may impact player earnings.
Even without this additional sponsorship stream, revenue increases are not slowing as fan interest in the IPL is sustained. It’s also interesting that player interest continues despite professionals being underpaid compared with participants in other sports leagues.
However, players are speaking out against the fact that their rewards represent low percentages of overall revenues, especially as they see those revenues rising so quickly. This may eventually lead to them looking elsewhere to increase their financial returns. If this happens, player salaries and auction fees may grow at a faster pace in an attempt to continue attracting the sport’s biggest names, although this is far from certain to happen.
