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How fast can Pro Kabaddi franchises turn profitable?

30-July-2015
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How fast can Pro Kabaddi franchises turn profitable?

Pro Kabaddi League (PKL) franchises have a lot to cheer about with the revenues received in the second edition of the tournament. Revenues from on-ground team sponsorship this season is in the range of Rs.2-4 crore per team according to a source. This is a considerable increase in team sponsorship revenues since they were as low as Rs.10-15 lakh last season. Some of the brands sponsorships include Kolte-Patil for Puneri Paltan, Shakti Pumps for Jaipur Pink Panther, Enerzal partnered with U Mumba as main sponsors. Some of these deals are even multi-year deals.   

The gate receipts and ticket revenues are expected to be between Rs.30-50 lakh per team this season. This takes the total earning of the franchise owners to a minimum of Rs.2.3 crore, which can even go to Rs.4.5 crore. In addition to this the franchises can also earn Rs.2 crore through the prize money if they win.

If the popularity and viewership this season continues to grow the same way it did last year the league will see franchises breaking even faster than even franchises in IPL, in which they took more than four seasons to breakeven. PKL team franchisee fees are the lowest at Rs.1 to Rs.1.5 crore per year over a 10 year period. In comparison Indian Hockey League teams pay Rs.2.5 – 3 crore as franchisee fees per year. There are other expenses such as salary cap, sports development investment, travel and other expenses which amount to around Rs.5 crore (inclusive of franchisee fees). However, with some team franchises earnings amounting to Rs.4.5 crore, they come very close to earning profit. And unlike other leagues where player acquisition costs are high, the budget cap for the bidding of players was also low at Rs.60 lakh.

According to a GroupM ESP report on the reasons for the success of PKL in the first season is the rights holders managed to keep the expenses from central as well as team perspective under check, making the league commercially viable and ensuring deep pockets for teams to spend on players. The report by GroupM ESP in collaboration with IIM Ahmedabad also stated that that fan experience by holding the sport in large stadiums, minimum infrastructure needed for the sport, game format and scheduling and the on-air coverage of the sport with informative commentary in regional feeds has helped the league to grow in popularity.

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