Economic Impact of Indian Premier League (IPL)

The Indian Premier League (IPL) has been a significant event in the world of cricket, with its inaugural season taking place in 2008. The IPL is a Twenty20 cricket league that brings together some of the best cricketers from around the world to compete against each other. The league has been known for its high-quality cricket, as well as its elaborate and colorful presentation, which includes music, dance, and fireworks. The IPL has also become a significant source of revenue for the Indian government, with its matches being watched by millions of people around the world.

Sports Events,
Impacts, Issues
and Policy
1

TABLE OF CONTENTS
Introduction .....................................................................................................................................3
Impact of IPL ..............................................................................................................................3
Measurement ...............................................................................................................................5
Funding of IPL.............................................................................................................................5
Risk associated.............................................................................................................................6
Protest..........................................................................................................................................6
Critical assessment of the event ..................................................................................................7
Conclusion ......................................................................................................................................8
References........................................................................................................................................9
2

INTRODUCTION
Indian premium league (IPL) is an domestic cricket tournament of India which happens
every year. Further with the passage of time, the format of sports has also changed a lot. Earlier
there was a time when cricket matches were organized in only two format which were test and
one day. Modern lifestyle has made the lives of people so busy that now they do not have time of
sit and watch cricket for the entire day (Petersen and et. al., 2008). This also resulted in drop of
the number of viewers of cricket matches. In order to reduce this gap, in the year 2007, Zee
network came out with an innovative idea of starting Indian cricket league. During its initial
stage this idea was refused by BCCI (Broad of control for cricket in India). When India became
the winner of first twenty20 world cup which was a cricket world cup of 20-20 over matches,Mr.
Lalit Modi who was the head of BCCI came up with an idea of launching T20 cricket league in
India.
Impact of IPL
Indian premier league has its own negative and positive impact on the entire nation. It
leads to community pride, up-gradation, atmosphere and increase in external investments. IPL
has attracted audience form all across the world. One of the major reason behind this is that not
only Indian players but foreign players also play in this format. People love to see players of
rival teams playing together. The level of aggressions and energy among players playing in IPL
is so high that it has gained attention for many views (Parker, Burns and Natarajan, 2008). Not
only India, but people from various countries of the world comes to see matches of IPL. This
means that more foreign exchanges is received which is beneficial for the growth of country.
However the money is also spend on infrastructure and arrangement of world class facilities of
players as well as audience. On the other side of this, IPL also have some negative impacts as it
creates jams and traffic in nearby areas where the cricket stadium is located. Further stadiums
such as feroz shah Kotla and DY Patil which are located in Dehli and Mumbai have the capacity
of around 550000 people (Top-5-cricket-grounds-in-india, 2015). Other than this, it also
increases crime rate and pollution in the cities where matches are organized. Therefore it can be
stated that there are various positive and negative impacts occur on country.
Economy
3

IPL also as various kind of impact on the overall economy of India. It has become a
platform which attracts people from all across the world. Further more and more amount of
foreign exchange is received in the country. At the time of IPL, lot of employment opportunities
are generated for people in various cities. On the other side, it can be argued that the employment
provided by sport league is more of a kind of seasonal (Rasul and Proffitt, 2011). This means
that people gets work only in the month in which the league is organized. Rest of the time they
remain unemployed or do some other work. IPL has also created a situation of monopoly as there
is no any other cricket league which provide such as kind of high voltage action every year.
Social impact
There are many arguments which has been done in order to determine whether IPL is
good or bad for the society. In recent years, the cricket league has been involved in various kind
of issues such as money laundering, controversies, corruption etc. It can be stated the IPL
provides three hours of excitement, action and trill to people. However it can be argued that it ha
misused the trust of people several times (Borooah and Mangan, 2012). Rather than looking
forward on the bad side of the cricket league, we can also look at its positive side which was
displayed when the event occurred in South Africa. Before IPL, the country was going with a
very bad economic condition but the leagues results in making the entire economy stable. Other
than this, it can be also stated that other positive side was frequent recognition of children,
teachers and schools. Further it also provided scholarship to students which has helped them to
have a better future (Singh, 2011). When IPL happens in India, it enhances the image of entire
community. Good image of the country is created all across the world and this also increases the
number of tourist visiting the country. It can be also stated that IPL has improved the life of
people which are living in the near by areas.
Environmental impact
IPL also have some sort of impacts on environment as lot of pollution is created during
the match. There is not waste management system which has been implemented in any of the
cricket stadiums of India. People consume lot of drinks and food during the match and their
waste is directly thrown on the ground. However it can be argued that the waste food, papers and
other thing are collected in proper way after the match gets completed (Swartz, 2011). Further,
the air pollution crated by jams and traffic also have an negative impact on the environment. IPL
4

is carried out for entire one month and a lots of waste and pollution is formed. Along with this,
the sound pollution which is created by music and audience during is the event is also dangerous
for the people which live in nearby areas of the cricket stadium.
Government also plays a major role production and sponsorship of events. Further there
are various reason which explains why government of the country should get involved in events.
The rules and regulation developed by government regulatory bodies helps in lowering down the
negative impact of IPL on environment and society (Enderwick and Nagar, 2010). Further
during the initial stages, the government involvement in events such as IPL was very low. In last
few years the event has been charged against corruptions and against us of unfair means. This as
encouraged government of India to become the part of cricket league. It is the government of
country which owns many of the stadiums. Along with this, the staff which is taking care and
managing cricket stadiums in India is also appointed by government only.
Measurement
The economic impact of IPL can be measured with the help of various models such as
multipliers, input and output modeling, econometric approach, cost and benefits analysis and at
last commutable general equilibrium modeling (Rastogi and Deodhar, 2009). After carrying out
the assessment, it can be stated that IPL has become a huge success for India. Huge sales of
tickets and number of views of match on television are the two major factor through which the
above stated line can be justified.
Funding of IPL
The entire event of IPL gets funded by consist of an entire process which begins with
franchising auction of teams where the teams playing in IPL are begin purchased. During the
first tree edition there were 8 teams and in fourth season two more teams joined. The new teams
provided as sum of around $700 million. The funds are also raised by with the help of
sponsorship of the event. During the initial season, DLF which is an Indian company that deals
in real estate has paid the sum of Rs200 crore to become the tittle sponsor of IPL. Further it
carried the sponsorship from 2008 to 2012 (More statistics, 2015). After DLF Pepsi become the
tittle sponsor by giving a sum of Rs396.8 crore. At present Vivo which is Chinese brand of
mobile phones is the tittle sponsor of IPL. Other than this, majority of the revenue is generated
from the sale of match tickets and the bidding which is carried at the time of players auctions.
5

Further the revenue generated is spend on providing the match fees to players and conducting the
entire event.
Risk associated
As per the structured study, it has been identified that there are number of risk that are
associated with conduction of IPL. In the support of this, it can be said that the racism and
cultural clashes can be take placed due to IPL as it provide massive influx of foreigners into
cities has been taken into account (Gupta, 2009). Conduction of event impacts the perception of
citizens who live in host city and they begin to change their urban environment as per needs of
guests. It also creates widely distributed atmospheres which impacts urban spaces in negative
manner. Due to vibrant atmosphere the differences in culture gets boosted and impacts social
aspects in negative manner. In other aspect, it has been spotted that due to IPL number of
conflict between foreigners and local citizens has been identified that impacts social aspect and
event in negative way. In this respect, it is necessary for organisers and government authorities to
ensure that proper balance between cultural differences is maintained. It has also been noticed
that the sports event location is also considered as a place where cultural aspects can be exhibited
(Parker, Burns and Natarajan, 2008). Some time over concentration on these factors influences
the operational activities of event and create conflicts between social aspect.
Other than this, it can also be asserted that the biggest risk which is associated with IPL is
regarding event failure. In addition to this, it can be contended that if IPL event faces failure
issues then it has direct influence on the economic system. These kinds of factors also have
massive repercussions on diverse future events. One of key fact is that the IPL also affects the
environmental aspects of city and restrict government authorities to not invest in such projects
(Borooah and Mangan, 2012). In the support of this, it can be said that the security related risk is
also one of critical factor in the event. Such kinds of global events have visit of guests from
diverse nations so risk of terrorist attacks are always associated with it. In this respect, it is
necessary for BCCI to have regular interaction and coordination with local government
authorities such as police, etc.
Protest
In the support of this, it can be said that the event has also faced issues due to various
protest. It has been identified that IPL has faced number of protest which has impacted event. For
6

example, citizens and various political parties of India has protested against IPL due to unethical
activities of cheerleaders and cricketers. It has influenced event in diverse manner and forced
BCCI to establish effective monitoring system (Gupta, 2011). In this respect, board members of
event has decided that cheerleaders will have their functioning as per Indian culture. At
Wankhede stadium, Mumbai the local citizens has protested against foreign cheerleaders in the
IPL. It is also one of reason that BCCI has decided to take various measure that ensures about the
functioning of cheerleaders.
Other than this, one of key issue that is associated with IPL is due to match fixing
activities in the IPL. In this respect, citizen and political factors in India has also protested. In
context to this, it can be said that political factors demanded to dis-activate the event so that these
kinds of unethical practice occurrence can be stopped. Moreover, it is also one of key reason that
BCCI has suspended some cricketers from event and banded them to play cricket (Lakshman
and Akhter, 2013). In this support, it can be said that BCCI has also taken various actions in
order to protect IPL from such unethical practices. BBCI has suspended two teams from IPL for
teams. Classification of bended teams can be as Chennai super kings and Rajasthan Royals.
Number of financial penalties has also been charged against the owners of teams as they were
responsible to ensure that any of team member is not involved in unethical practice. Meetings
with various governing councils has also been taken into account to establish various measures
and standards. Other than this, various activities has also been conducted to make bidding
process more transparent so that issues can be overcome in effective manner.
Critical assessment of the event
After carrying out the critical assessment of the entire event of IPL it can be stated that
there are some advantages and disadvantages which are associated with this league. During
auctions and bidding of players, the teams invest huge amount of money. Many political parties
of India has protested against these biding. Further they explained that such high amount should
not be offered to players. However it can be argued that IPL has provide a platform to many
young crickets of country (Enderwick and Nagar, 2010). Cricket in India is treated as religion
and the country is full of young cricketers. During one stage it was almost impossible for many
young players to show their capabilities and talent. IPL has given chance to many young
cricketers of the country. On the other side of this, it can be stated that there are several
7

drawbacks which has been associated with the premier league. Along with growth and
development it has also created various kind of problems and issues which to the society
(Petersen and et. al., 2008). It can be evaluated that such kind of event has also enhanced the
image of India in the entire world. Now the country as witnessed more number of tourist in the
month of IPL as compared to its peak tourist season. It can be argued that such of events are very
beneficial for the growth and development of any country. In the initial stages, the cricket league
has created a brand image of India all across the world. On the other side, it can be stated that in
last few years the corruptions and other scams which has been witnessed in IPL has created a
sense of dissatisfaction in the mind of views from all across the world. People in the country
have protested by saying that the cricket league should be banned as it has played with the trust
and feelings of people. In addition to this, last year tow teams of IPL which are Chennai
Superkings and Rajasthan Royals as been banned from the leagues because of charges regarding
match fixing (Singh, 2011). This will have an direct impact on the sales of tickets and number of
audience in this year. However it can be asserted that such leagues should be promoted as they
provide lost of benefits to country and also provide chances to young and emerging players.
Further it can be argued that government should increase its inference in leagues. Further strict
norms and regulation should be developed to ensure that players do not encourage in match
fixing or any other crime.
CONCLUSION
From the able report, it can be concluded event such as IPL plays very important role in
growth and development of country such as India. It is only because of IPL that infrastructure in
most of the cities has been developed to a great extent. Other than this, it can be also concluded
that there are some negative impact of IPL which needs to be taken care of by the government of
the country.
8

REFERENCES
Books and journals
Borooah, V.K. and Mangan, J., 2012. Mistaking Style for Substance Investor Exuberance in the
2008 Indian Premier League Auction. Journal of Sports Economics. 13(3). pp.266-287.
Enderwick, P. and Nagar, S., 2010. The Indian Premier League and Indian Cricket: Innovation in
the face of tradition. Journal of Sponsorship. 3(2).
Gupta, A., 2009. India and the IPL: Cricket's globalized empire. The Round Table. 98(401).
pp.201-211.
Gupta, A., 2011. The IPL and the Indian domination of global cricket. Sport in Society. 14(10).
pp.1316-1325.
Lakshman, C. and Akhter, M., 2013. Corporate governance scandals in the Indian Premier
League (IPL): implications for labour. Labour & Industry: a journal of the social and
economic relations of work. 23(1). pp.89-106.
Parker, D., Burns, P. and Natarajan, H., 2008. Player valuations in the Indian premier league.
Frontier Economics, pp.1-17.
Petersen, C. and et. al., 2008. Analysis of Twenty/20 cricket performance during the 2008 Indian
Premier League.International Journal of Performance Analysis in Sport. 8(3). pp.63-69.
Rastogi, S.K. and Deodhar, S.Y., 2009. Player pricing and valuation of cricketing attributes:
exploring the IPL Twenty-20 vision. Vikalpa. 34(2). pp.15-23.
Rasul, A. and Proffitt, J.M., 2011. Bollywood and the Indian Premier League (IPL): the political
economy of Bollywood's new blockbuster. Asian journal of communication. 21(4).
pp.373-388.
Singh, S., 2011. Measuring the performance of teams in the Indian premier league. American
Journal of Operations Research. 1(03). p.180.
Swartz, T.B., 2011. Drafts versus auctions in the Indian premier league: theory and
methods.South African Statistical Journal. 45(2). pp.249-272.
Online
More statistics. 2015. [Online]. Available through:<http://www.iplt20.com/stats>. [Accessed on
8th January 2016].
Top-5-cricket-grounds-in-india. 2015. [Online]. Available
through:<http://www.sportskeeda.com/cricket/top-5-cricket-grounds-in-india>.
[Accessed on 8th January 2016].
9