KKR led profitable IPL teams in FY17 and RCB saw a turnaround

While the IPL 2018 frenzy grips the country and fans don their team shirts, it’s a good time to take stock of the profits the franchises are making. Four out of the eight teams have registered their FY17 revenues with the Registrar of Companies. This year too, Shah Rukh Khan’s KKR (Kolkata Knight Riders) has proved to be most profitable. Meanwhile, Royal Challengers Bangalore (RCB) saw a turnaround and covered its losses for the first time in four years.

According to data reported by Tofler, in FY 2017 KKR doubled profits to INR 19.7 crore and saw a 23.7% increase in revenue to INR 154.2 crore. Meanwhile, RCB saw revenues jump 19.8% to INR 162.1 crore and reported profits of INR 3.15 crore. Until this year, the team had been in the red, having registered huge losses of INR 43.9 crore in FY 16.

KKR’s Winning Combination

KKR has been champion twice, in 2012 and 2014, but so have Mumbai Indians and Chennai Super Kings. Despite the competition, KKR is the IPL team that has been profitable for the longest time. Consistent performance and the star power of co-owners Shah Rukh Khan and Juhi Chawla has been KKR’s winning combination. Winning championships brings in more from sponsorship revenues, performance bonuses and qualifying bonuses. SRK’s brand power brings in higher sponsorship revenues of between 40 to 45 crore.

KKR has also been ahead of other teams in opening other revenue sources. It has partnered with startups like The Souled Store for merchandising and with digital agency 22feet for aggressive social media marketing since 2011.

Long before other IPL heavyweights like Delhi Daredevils (DD) and Mumbai Indians (MI) had broken even, KKR saw profits in 2011. In 2014-15, the team saw profits leap 54% even though the first half of the T20 tournament was held in the UAE.

KKR is owned by Knight Riders Sports Pvt Ltd., a subsidiary of Shah Rukh Khan and wife Gauri Khan’s production banner Red Chillies Entertainment.

Changes for RCB

RCB, with its home in Bengaluru’s Chinnaswamy Stadium, has taken its time to move from using its in-house brands to roping in third-party brands. In the past, the team’s biggest expenses have been player fees. However, RCB has not yet won the IPL trophy despite exciting moments in 2009 against Chennai Super Kings and against Gujrat Lions in 2016. In 2014-15 it realised losses of INR 20 crore. Since then, it has come a long way in raising sponsorships of between INR 35 crore and INR 40 crore in FY 17.

Amrit Thomas, who took over as head of Royal Challengers Sports Pvt. Ltd. from Vijay Mallya in 2016, brought changes in the auction for players for the 2018 season. Preparations for the auction were made in the quintessential Bengaluru way, with a massive analytics engine.

The two other teams that reported their revenues were Delhi Daredevils and Kings XI Punjab. Like KKR, the team from Punjab has been consistent in making profits for the last three fiscal years. In FY 17 it made a profit of INR 6.6 crore.

By contrast, in FY 17, DD realised losses of 9 crore, a further rise from INR 6.1 crore in the previous fiscal year.

 

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