When everyone was bidding for four-five thousand crores, Sanjeev Goenka bought Lucknow for 7000 crores. Now people feel that how is this a loss deal because only 20 crores will be available for the IPL victory. But the business model of IPL is such that even if all the matches are lost for 10 years to Lucknow, their money will be recovered with profit. Let's know how…

Why is LSG a profitable deal for Sanjeev Goenka?

Actually, 7000 crore Sanjeev Goenka has to give BCCI not just in one year, but in 10 years. So one year spent was the BCCI's installation of 700 crore, 100 crore player salary, 200 crore hotels, coaches and all the other expenses. So one year overall expenses were 1000 crores.

How is it earning?

Now talk about their earnings, their biggest earnings are from broadcasting rights. BCCI has sold broadcasting rights of 2023 to 2027 for 49000 crores. Consider 50000 crores for easy calculation. So one year of broadcasting rights earned 10000 crores, whose 50%, ie 5000 crore rupees will be taken by BCCI and the remaining 5000 crore will be divided into 10 teams. So Lucknow will get 500 crores.

Then all the people who are in their jersey and all the brands make a marketing campaign, they earn 200 crores from there. Catch 100 crores from the stadium ticket cell and merchandise cell. So his overall earning was 800 crores. That means every year they are losing 200 crores. So in 10 years, Sanjeev Goenka will get Lucknow's team 2000 crores and not 7000 crores.

What will be the valuation of 7 thousand crores in 10 years?

But now more interesting thing is that in these 10 years the valuation of Lucknow will also reach 25 to 30000 crores because the IPL team is like a startup, a company and their valuation increases over time. For example, understand that the Rajasthan team was around 284 crores in 2008, which has just increased to 6000 crores and if Sanjeev Goenka also sells only 10% of his team, then the entire 2000 crore 500 crore will be returned with a profit of 2000 crore 500 crores.