There is an obvious way to evaluate an IPL team. Look at the points table. Businesses have a different metric. Revenue. Sponsorships. Media rights. Tickets. Franchise value. It has an intriguing implication for sport: a team can have a disappointing season on the field and a successful one off it. Why? Because the IPL has an economic model in which it sells its sport product intensively.

The Single Biggest Product Is the Broadcast

A cricket team plays around two months of IPL matches in a year, which is much shorter than the duration of a typical sports league. However, those matches produce something much more valuable than the stadium seats. The television and digital platforms on which they air.

The BCCI sold media rights for the IPL 2023–2027 season for ₹48,390.32 crore (BCCI TV). This reflects the sums that broadcasters and streaming services believe they can make by selling advertising space and attracting subscribers to watch a sport played by millions. While a fan in Kolkata and a fan in California could both watch the same match, only one could watch it from within the stadium.

Media turns the sport into a product that is much bigger than any one game or location. In contrast to the relative scarcity of stadium seats, TV and digital platforms enable the IPL to reach a vast audience.

The Teams Sell Together

Now let's think about the teams. The IPL franchises do not independently sell the rights to telecast their matches in the way that an independent entertainment company might. Instead, the primary revenue sources - media rights and central sponsorships - are shared among the teams. According to Reuters, "the IPL's centralized revenue sharing model ensures that key media and sponsorship revenues are distributed to all teams, providing a financial safety net."

So, even the worst team in the league generates income from a media asset that few others can rival. Similarly, even if a particular franchise does not perform well on the field, its ability to benefit from the IPL brand is not diminished. Winning has its rewards, but total dominance by one team is unlikely as it would diminish the value of the other teams. That is not the case for an independent business.

If a product fails, its revenue is sharply reduced. For the IPL, the competition is carefully balanced to ensure that overall demand - and therefore revenue - is not reduced by the presence of other teams. Investors buy into the IPL's media franchise.

Why Private Equity Is Excited About the IPL Model

The predictability of these shared revenues makes sports franchises much like a scarce media asset. There is only one IPL, and there are only eleven teams. An investor who owns a franchise gets a permanent license to benefit from one of these unique assets. This creates tremendous value, particularly for sophisticated investors.

According to Reuters, global private-equity firms were considering investing in IPL franchises in 2026. Moreover, in 2025, the value of the IPL business was estimated at $18.5 billion, suggesting that investors saw significant value in the media asset. An investor in the IPL buys much more than the eleven players on whose performances the on-field outcome depends. These players change almost every year, but the asset - scarce franchises - remains the same.

Local Revenue Makes Stars More Scarce

So, what determines the value of an individual franchise? Everything that drives demand for the sport. A team could potentially sell jersey sponsorships, local sponsorships, tickets, and other items, and the value of each of these would be determined by the number of fans.

The number of fans that a team can attract is, in turn, impacted by the size of its following. A firm would be willing to pay more to sponsor the team with the larger following than the one with the smaller following. This is where winning matters. A team with superstar players has greater drawing power. So does one with a storied past or one that dominates social media. Central revenues reduce risk, but a team's ability to generate local revenues can add value.

A Player Is an Asset Beyond Runs Scored and Wickets Taken

When a team buys a player, it is not just paying for his batting average or bowling strike rate. The player has value beyond his sporting contribution in that he helps drive merchandise sales, social media engagement, sponsorships, and so on. It is not easy to quantify these, which is why debates rage on about whether a particular player is over- or under-valued. However, one should not ignore the potential commercial benefits when evaluating a player.

A team with a strong commercial presence has an asset that is far more valuable than one with a weaker presence. So, the IPL auction often reflects commercial considerations beyond the sporting impact of the players.

Stadium Seats Are the Smallest Audience

A stadium holds a certain number of people. A telecast carries a much bigger audience. That is why the TV and digital rights command such a large share of the revenue. This does not devalue the stadium seats; on the contrary, the atmosphere generated by the fans enhances the experience for everyone. However, the most important audience for generating revenue is not in the stadium. It is watching on television or streaming services.

The Competition Is Good for Business Even If the TV Rights Are Shared

There is an apparent contradiction in the IPL business model. Although teams share the lion's share of revenues, including media revenues, they still compete intensely. Why? Because the very existence of the IPL media asset depends on competition. If teams did not compete, no one would watch them. That would diminish the media value of the IPL, reducing the total revenues that are then shared. Therefore, teams compete to generate revenues that then get shared. The rivalry is integral to the IPL business model.

The Trophy Is Not the Only Prize

An IPL team owner wants to win the title. Of course, he does. But he has another objective: he wants to win the IPL franchise business model. By owning one of the few franchises, a team owner benefits permanently from the media revenues that the IPL generates. Furthermore, by competing successfully with other IPL teams, a franchise can make itself more valuable by capturing a bigger share of media revenues as well as local revenues like sponsorships.

Moreover, by making itself commercially attractive, it captures more value from the growth in the IPL brand. Ultimately, an IPL winner realizes that the trophy is a wonderful prize that lasts for a year. What matters more are the opportunities offered by owning a scarce asset that will generate revenues tomorrow, next week, and next year