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How do IPL teams make money? | IPL Business Model | Nitish Rajput - YouTube
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No team depends on the price money of 20 crores.
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They made a plan to buy Dhoni in 20 lakhs
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And make him play in turns. DLF has given 200 crores
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for saying DLF IPL instead of IPL.
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That's why BCCI terminated the Deccan Chargers and launched Sunrisers Hyderabad.
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Due to the China-India conflict, this thing was given to TATA.
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When these many people watch something then the brands get involved
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If someone has money then they can buy an IPL team.
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Or are there are some specific people or companies that can buy an IPL team?
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What are its eligibility criteria?
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And how are the teams bought? How are the players selected?
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How does an IPL team earn money even after investing this much?
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If someone wants to buy an IPL team then he has two options
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He can buy IPL teams in these ways only. The first way is to talk
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to the owner of the existing team. And buy their shares
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just like LIC has done.
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LIC bought 6% shares of Chennai Super Kings
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And the second way is to wait for BCCI to announce
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the launch of a new team.
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Because it's not like your team will be made if you go there with money.
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BCCI follows the process when it wants to add a team.
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When BCCI invites people to buy the team then
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only those firms can apply whose valuation is 3000 crores.
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Valuation means the earning power of the company.
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If a company is sold
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then how much will we get from it?
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This is decided based on revenue and profit
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So when the BCCI invites then the eligible companies have to buy
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ITT, Invitation To Tender. Its cost is 10 lakhs Rs plus GST.
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This is a non-refundable fee. All the terms and conditions
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written in this. We cannot sit in the IPL bidding process without this.
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Now, we will not get ITT on any shop
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You will have to e-mail
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as BCCI has said in 2021
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that whoever wants ITT
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should email before 5th October 2021
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And it's not necessary that you
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will sit in the bidding process if you've purchased the ITT.
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Your ITT could be canceled without any notice or reason.
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The people who get shortlisted in this
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are allowed to sit in the bidding process.
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The teams in the bidding process have a base price, normally it is
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between 1700 to 1900 crores. The team will not be sold below this.
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After this, bidding is done and the one who bids high gets the team.
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Like Lucknow was sold at 7000 crores and Ahmedabad at more than 5000 crores.
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After buying a team, you have to buy players. Bidding will be done on
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which players? For this, players have to register. So if I play cricket
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So can I register myself? It's not like that. Players register themselves
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by three methods. The first is capped player, the player who has
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played even a single match from team India is called capped players.
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The second is foreign countries players. The third is uncapped players.
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The state association sends these players.
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There is a pool of around 1100 to 1500 players.
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Out of them, 500 or 600 get shortlisted.
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The biggest example of this is Hardik Pandya
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who was an uncapped player, came with the recommendation of the state.
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When a farmer goes to the APMC market for the bidding of the grains
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Then the bidders conspire among themselves and the farmer faces losses.
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That's why farmers demand MSP. The same thing shouldn't happen in IPL
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that the teams planned to buy Dhoni at 20 lakhs and then make him play in turns.
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To avoid this, when players get themselves registered they
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set their base price. This price ranges from 20 lakhs to 2 crores.
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After this, the players do not have any control over the process.
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One team bought all the good players by the emphasis of their money
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and make the World11. The fun of IPL will be spoiled.
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That's why the bidding process has some rules.
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One team cannot have less than 18 and more than 25 players.
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And it cannot have more than 8 foreign players. Every team is given a
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the limited amount which is called purse and purse has a limit
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Initially, it was 85 crores and now it's 90 crores.
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Out of these 90 crores, a team of 18 to 25 players is to be made
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First, bidding for Marky players is done. Marky players mean the big players.
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Their base price is 2 crores and then bidding is done in groups.
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Like the batsman group will come and then ballers group will come
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And then the bidding will be done in those groups. It is very important to select
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the right players. That's why the team uses data science.
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Which player has the ability to be hard-hitting? Which player is the match-winner?
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And out of two players of the same stat, where to spend more?
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In all these things, data science is used. Teams hire
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the experts of data science and analytics by giving them a huge salary.
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And not only in IPL, using data science has become
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the necessity for the company to sustain the market.
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And this is the reason why this is becoming a very popular skill.
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And people are growing in their careers by using this.
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If you have interest in this field
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Then you can start your career in data analytics through UPGRAD.
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Data analytics from prestigious Indian and international institutes
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like IIT Bombay, Madras, Caltech University
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Other than these, UPGRAD also offers other degrees all over the world
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in the same format like MBA from IU Germany, MS degree from Clarke University, US
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or BCA from Decan University, Australia
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With this, you will get one on one mentorship and guaranteed placement assistance
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The best thing is you can study all this according to your time.
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Because UPGRAD is providing you with flexible learning hours.
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So start your learning journey to excel in your career.
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Click on the link given in the description box to register.
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Bidding on players is done in a very controlled manner
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The players whose base price is from 20 lakhs to 1 crore
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You can increase their bidding by 5 lakhs. Bidding from 1 crore to 2 crore
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You can increase it by 10 lakhs.
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All the teams get completed by this. And with this mini bidding is done every year
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A team releases the players which are not useful in mini bidding.
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And the bidding is done between the released players and new players.
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A mega auction is done every 3 years. It can be before or after
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In this, a team has to release all the players except 4.
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A lot of money is needed to buy an IPL team.
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Buying a team,
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salary of support staff and player's fees,
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admin and operation cost, hotel and
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tickets for flights because matches are conducted in different locations
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A lot of money is required. And then also, 20% of what a team
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is earning have to be given to the BCCI. After investing this much, the winning
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team gets only 20 crores. So the business model of IPL is very different.
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No team depends on the prize money of 20 crores. So how does an IPL team
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earn money? The first and major income of an IPL team is broadcasting rights.
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The channel that has the broadcasting rights of IPL can only telecast the IPL.
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From 2008 to 2017, Sony had broadcasting rights. If you wanted to
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watch IPL then, then you had to watch it on Sony. For this, Sony paid 8200 crores
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for 10 years. After that, bidding was done. From 2018 to 2022
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Star India bought the broadcasting rights for 16347 crores.
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50% of this amount goes to BCCI
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and the remaining 50% is divided among IPL teams.
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Earlier, 20% of this amount was taken by BCCI and 80% was divided among teams.
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Gradually, the share has become 50%.
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Why do channels give this much amount for broadcasting rights?
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IPL is watched on a massive scale all over the world.
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If I talk about 2019, then 462 million people have watched IPL
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And when these many people watch something
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then the brand gets involved in this.
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A 10-second ad that you see in between matches, goes for 12 to 13 lakhs.
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You may find this amount less but when you will add the amount for 45 days
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Then it is a very big profit. That's why all channels are ready for the bidding.
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The second source of income is title sponsorship
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You may have seen that IPL is not called just IPL
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Sometimes it is called DLF IPL, Vivo IPL, Pepsi IPL
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And now it will be called TATA IPL. The company gives a huge amount
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for calling out their company's name with the IPL. And every company
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wants to join their name. That's why bidding is done on this
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which is called the title sponsorship.
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From 2008 to 2012, DLF gave 200 crores for
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calling it DLF IPL instead of IPL.
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Afterward for the next 3 years, Pepsi gave 396 crores
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After that, Vivo gave 2199 crores from 2018 to 2022
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Due to the China-India conflicts,
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this thing was given to TATA for 300 crores per year.
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60% of the earned revenue is kept by the BCCI and 40% is divided among the teams.
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The ticket price is decided by the home team in whatever ground a match is conducted.
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On average, tickets worth 5 crores are sold
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Out of that, 80% is kept by the home team and the rest goes to the
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ground association. If you see logo or name in the t-shirts worn by team players
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Brands give money for that. During the match and inside the boundary
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If you'll see the name of any company
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like on boundary roads, wickets, helmets,
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bats, on a t-shirt of an umpire, wherever you'll see the name of any brands
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The teams get money for all this.
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The owner of the team get their players to advertise for other companies
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The ads are done by players wearing team jerseys, owner of the team gets
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the money for that. Along with this, every team owner has their brands
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and promotions. They get it done by their players. You may have seen the
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ad of Jio Dhan Dhana Dhan. After that, every team has its own merchandise
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T-shirts, bats, kits, gloves of the team's name. Different products are
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sold all over India and the money goes to the owner.
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Lastly, attention is paid to the winning amount. The winning team gets 20 crores.
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And the runner-up gets 12.5 crores.
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Out of which 50% is kept by the owner of the team.
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And the remaining 50% is divided among the players.
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Even though in some arrangements, BCCI takes the share in revenue
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But the final amount that the team earns, has to give 20% of that to the BCCI.
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But then also you may have seen that
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the team owners desperately want their team to win.
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Or at least it reaches the top 4. Because when these 4 teams qualify
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Then the other team's match stops.
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But these 4 teams get to play extra matches.
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Extra match means extra tickets, extra sponsors, and extra money.
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The second benefit is that when the team reaches the top, its brand value increases.
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It gets more money as compared to other teams for ads and sponsorship.
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The money taken by CSK for advertisement and the money taken by Punjab
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Both of them have a huge difference.
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So the winning team has the advantage. The second thing is that
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the top 4 teams get the chance to go to the Champions Trophy.
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As I told you, they get to play extra matches for going there.
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So the profit increases by playing there.
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Initially, for 10 years, IPL teams faced losses. This was the time when
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Deccan Chargers were unable to pay salaries to their players
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That's why the BCCI terminated Deccan Chargers and formed Sunrisers Hyderabad.
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The Deccan Chargers were unable to sustain at that time but the other teams sticked.
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Because these teams had their own brands and products. They used IPL teams
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and reached the next level. But as soon as Star India bought
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media rights at double or triple prices, all the teams started to earn profit.
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And the prices for title sponsorship and other advertisements also increased.
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The people who are against this arrangement said that these teams earn their main income
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by spot-fixing. The first case is when CSK and Rajasthan got banned for 2 years.
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Other than that I didn't get any proof where spot-fixing was caught.
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Now is it done or not. It is a matter of debate.
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