Long read: Sorry, Football. Cricket Read Your Business Plan and Fixed It

Last Sunday, the Indian cricket team extended its dominance of the shortest format of the game – T20, to become the first ever team to win consecutive world cups. The fact that they won something like 85% of their games in between the two world cups underlines that domination. Indeed, Siddharth Monga argued in the ESPNCricinfo why this team could be the greatest T20 team ever. But how did we get here?

There is enough consensus now that the Indian Premier League and its success has had a big role to play in this. Whilst its contribution to the development of cricket, creating a depth of talent and ensuring a wider set of players make a decent living out of it (including some smaller regional leagues) is well appreciated, it is also among the most successful sporting leagues in the world, economically. Indeed, second only to the NFL measured in terms of revenue per game.

“Here’s the number that should stop every sports investor cold: $16.7 million. That’s what the IPL earns per match in media rights. The EPL – the world’s most glamorous football league, earns $10.7M. The NFL, the world’s richest league, earns $36M.”

Who better to take us through what makes the IPL tick than the man who helped create it in the first place. Balu Nayar, the then head of IMG India, tasked by the BCCI to design the IPL, explains the crux in this LinkedIn post:

“Top EPL clubs lose money. Chronically. PSG’s wage bill alone runs over $400M a year. Manchester United posted losses for years before their recent ownership drama. Arsenal, Liverpool, Chelsea are trophy assets for billionaires – not businesses for investors.

IPL franchises? Every single one is profitable. Has been for years. That’s not luck. It’s not a recent development. It’s a structural feature, and one that had to be deliberately built in, against resistance, from Day 1.

The reason MI can plant its flag in Cape Town and New York, and the reason the brand travels at all is because the underlying business is stable enough to replicate. Predictable profitability. Short season. Hard salary cap. Centrally negotiated media rights. No relegation threat. You know your costs. You know your revenue share. You build from there.

The IPL team P&Ls are predictable in a way no other major sports league can claim with a straight face across all its teams.

Revenues have roughly doubled in three years. Mumbai Indians grew from $34M in 2022 to $73M in 2025. KKR from $35M to $77M. CSK from $38M to $72M. And the salary cap means nobody blows up their P&L chasing a trophy.

This is because the IPL was the world’s first truly inorganic league. Designed from scratch, in the media rights era, for the media rights era. No legacy debt. No relegation anxiety. No 100-year-old stadium in the wrong city.

The salary cap was built in from Day 1. I know, because I pushed hard for it in 2008, as a key part of the design. Even the most financially reserved businessman loses fiduciary control when it comes to sports and winning a trophy. And I also guessed that there would be a high degree of inequality in wealth between the IPL team owners.

At the time, a certain very flamboyant airline owner publicly called it “pseudo-socialistic.” And added, “cos you’re from Kerala.”

But I didn’t just want profitability. High competitive intensity was an even more critical part of the IPL design. I’d learned from the EPL that you can’t let billionaire-owned teams dominate millionaire-owned ones, so that the same few teams are always at the top – didn’t want the IPL to follow that EPL model. I wanted every franchise to become a profitable asset – not a trophy purchase, not a tax write-off, and each with a genuine chance at winning the trophy too.

The salary cap proved the point immediately.

The very first IPL was won by Rajasthan Royals, which was the ‘cheapest’ team in the auction, assembled on the smallest budget, built almost entirely on overlooked domestic talent and a shrewd captain. Probably the best captain Australia never crowned: the incredible Shane Warne. Not the team with the biggest stars. Not the team backed by the deepest pockets. The ‘cheapest’ team won.

That wasn’t luck. That was the design working in Season 1. Competitive intensity wasn’t a promise. It was a result.”

Despite the ardent fan following for English clubs, this one aspect makes the IPL a lot more competitive where every team has a chance at any point in time. Read the whole post for some of the behind-the-scenes drama at the time of the league’s creation. Including the comments section, where Lalit Modi the then IPL commissioner publicly credited for its creation takes a dig at Balu for claiming credit in this post and Balu’s gracious response to it.

Further reading: The Business Breakdowns guys did a detailed podcast on the economics of the IPL a couple of years ago, featured in the 3L&3S.

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Note: The above material is neither investment research, nor financial advice. Marcellus does not seek payment for or business from this publication in any shape or form. The information provided is intended for educational purposes only. Marcellus Investment Managers is regulated by the Securities and Exchange Board of India (SEBI) and is also an FME (Non-Retail) with the International Financial Services Centres Authority (IFSCA) as a provider of Portfolio Management Services. Additionally, Marcellus is also registered with US Securities and Exchange Commission (“US SEC”) as an Investment Advisor.