The financial viability and stability through revenue generation and its distribution in a league system: discussion in Indian Context

Sport, in modern era, is no longer an amateur activity. The emergence of the professional sports leagues and competitions throughout the globe has made a significant change in the way sport was produced and consumed. Today, the application of the managerial tools and techniques is a prerequisite to manage these leagues and competitions. It ensures the financial sustainability of these leagues. It is equally important to develop a system of revenue distribution among the participating teams so as to enable them to be financially viable. The objective of this paper is to study this revenue generation and distribution model in various leagues organized in India and abroad. The two leagues, which are considered for this discussion, are the English Premier League (EPL) and the Indian Premier League (IPL). These two leagues are considered for analysis due to their immense popularity throughout the world and in India. From the analysis, it is found that the revenue is generated from sponsorship, ticket selling, selling of broadcasting right, prize money, in stadium advertisements, merchandizing and other commercial rights. These revenue generating sources can be divided into two groups- centralized and decentralized revenue streams. A part of this centralized revenue stream is distributed among the participating teams in a systematic way to make these leagues financially viable. This revenue generation and distribution system in of these two league competitions is discussed in the paper.