Indian Premier League
IPL is the fastest-growing, most dynamic and most disruptive force in the sports industry today… and it might just be on track to surpass the NFL as the world’s most valuable sports league.
Kyle’s Rating - 10/10
This episode delivers the most compelling entrepreneurial revenge story in Acquired history, following Lalit Modi’s audacious journey from corporate exile to creating a $16 billion sports empire through a series of impossibly complex deals that somehow all converged perfectly—even if he bent a few rules along the way. The sheer strategic brilliance of IPL’s league design represents genius-level systems thinking that synthesized the best elements from every major global sports league while innovating beyond their limitations to create what Ben and David convincingly argue is “the most perfect sports entertainment product mankind has ever known.” Most remarkably, Ben and David’s infectious enthusiasm and masterful storytelling actually made cricket genuinely compelling to American audiences, proving that great business narratives can transcend any industry or cultural barrier.
Company Overview
Company Name: Indian Premier League (IPL)
Founded: 2008
Headquarters: Mumbai, India
Core Business: Professional Twenty20 cricket league operating as the world's most valuable cricket property, currently valued at $16 billion with franchises averaging $1 billion in valuation
Significance: The IPL represents India's first truly global sports entertainment export and has become the second most valuable sports league per match globally, behind only the NFL, while pioneering the perfect blend of sport, entertainment, and capitalism
Narrative
The Indian Premier League's origin story begins not with cricket, but with revenge. In the early 1990s, Lalit Modi—a colorful heir to a tobacco fortune—returned from studying at Duke University with an audacious vision: bring American-style sports entertainment to India. His family's partnership with Philip Morris provided the perfect vehicle to enter the emerging Indian television market alongside Disney, leveraging their vast cigarette distribution network to reach cable operators across the subcontinent.
But Lalit's entrepreneurial dreams collided with Rupert Murdoch's global media ambitions. When Star (Murdoch's News Corp entity) and ESPN merged their Indian operations in 1996, Lalit found himself unceremoniously ejected from the business he helped build. The official reasons varied—allegations of revenue underreporting, kickbacks, improper dealings—but Lalit saw it differently: Murdoch had stolen his birthright. This personal vendetta would fuel one of the most extraordinary entrepreneurial revenge stories in business history.
Lalit's path back to power required penetrating the heart of Indian cricket: the Board for the Control of Cricket in India (BCCI). Through a calculated campaign beginning in 1999, he maneuvered from obscure state cricket board positions to the national BCCI board by 2005. Within two months of his appointment, Lalit unleashed a commercial revolution that transformed cricket from a genteel amateur pursuit into a billion-dollar industry. He increased the Indian national team's title sponsorship from $100,000 annually to $105 million, turned Nike's kit deal into a $52 million circus complete with sealed envelope auctions, and most dramatically, wrested television rights from Murdoch's Star network through a masterful bidding war that saw Nimbus pay $620 million for what had been a $15 million arrangement.
Yet Lalit's ultimate masterpiece emerged from crisis. When a rival Indian Cricket League launched in 2007, threatening to fragment the market, Lalit accelerated his grand vision: a domestic Twenty20 league that would combine the structural perfection of American sports with the soap opera drama of Bollywood. The timing was providential—India had just won cricket's first T20 World Cup in South Africa, with young players delivering impossible heroics that captivated 400 million viewers. The victory parade through Mumbai took eleven hours as four million people lined the streets.
Lalit's genius lay in recognizing that traditional cricket's staid, male-dominated audience had already been monetized through international matches. To create the IPL, he needed to unlock an entirely new market: women and families watching primetime television. His solution was revolutionary—recruit Bollywood's biggest stars as franchise owners, compress matches into three-hour evening entertainment, and create appointment television that competed not with other sports but with soap operas. When Shah Rukh Khan—India's biggest celebrity—hesitated due to his preference for soccer, Lalit orchestrated a byzantine deal involving Nokia's desperate desire for Shah Rukh's endorsement, ultimately providing the superstar with a "free" cricket team funded by jersey sponsorship.
The league's architecture was breathtakingly sophisticated. Drawing lessons from every major global sports league, Lalit and IMG created something unprecedented: perfect competitive balance through revolutionary player auctions, central revenue sharing that guaranteed profitability, and an asset-light model that eliminated traditional sports ownership risks. Teams would play in BCCI-controlled stadiums, share equally in massive television deals, and compete for players in transparent auctions that eliminated the backroom dealing that plagued other leagues. Most remarkably, this was designed and launched in just twelve months.
The April 18, 2008 inaugural match between the Kolkata Knight Riders and Royal Challengers Bangalore delivered everything Lalit had promised. Brendon McCullum's record-breaking 158 runs in a T20 format created instant history, while Shah Rukh Khan's presence courtside provided the Bollywood glamour that drew women viewers. The season averaged 4.9% television share—no soap opera commanded such audiences—while the championship final reached 10% of all Indian televisions. More importantly, 30-35% of viewers were women, representing millions of new cricket fans and an entirely new advertiser market.
But success bred scrutiny, and Lalit's aggressive deal-making methods finally caught up with him. When two expansion franchises collapsed in 2010 amid financial difficulties, enemies within the BCCI pounced. Twenty-two charges ranging from bid-rigging to match-fixing allegations forced Lalit into London exile, where he remains today under a lifetime cricket ban. The league he created nearly collapsed under corruption scandals involving spot-fixing by the Chennai Super Kings and Rajasthan Royals, requiring intervention by India's Supreme Court to restore credibility through comprehensive governance reforms.
Notable Facts
Gender Parity Achievement: IPL maintains true 50-50 male-female viewership, unique among major men's sports leagues globally, achieved through deliberate Bollywood integration and primetime scheduling strategy
Revenue Per Match Supremacy: At $16-17 million in media rights per match, IPL ranks second globally behind only the NFL's $45-49 million, surpassing English Premier League, NBA, and all other major sports properties
Smartphone Revolution Catalyst: Concurrent with Reliance Jio's data democratization, IPL viewership expanded from 300-400 million unique viewers in 2019 to 620 million streaming viewers in 2024
Auction Innovation: IPL pioneered transparent player auctions with salary caps, eliminating side deals and creating perfect market price discovery while maintaining competitive balance across all franchises
Bollywood Integration Success: Beauty brand Lotus Herbals achieved 20% sales increase through IPL jersey sponsorship, marking first women's brand to advertise on male professional sports team globally
Financial & Fan Metrics
League Valuation: $16 billion total (2024)
Average Franchise Value: $1 billion with range from $750 million to $1.3 billion for Mumbai Indians
Central Media Rights Revenue: $1.25 billion annually ($3.1 billion TV + $3.1 billion digital over 5 years)
Central Sponsorship Revenue: $150-200 million annually, anchored by Tata's $60 million presenting sponsorship
Total League Revenue: Approximately $1.6-1.7 billion annually
Team Revenue Distribution: 85% central (media rights/sponsorships), 15% local (tickets, local sponsorships)
Individual Team Financials: $70-80 million revenue, $17 million salary cap, ~$50 million EBITDA (60-65% margins)
Viewership: 505 million unique viewers (2023 regular season), 620 million streaming viewers (2024)
Global Cricket Market Share: 35% of world's 2.5 billion cricket fans located in India
The Modi vs. Murdoch Feud
The bitter personal vendetta between Lalit Modi and Rupert Murdoch became the driving force behind IPL's creation. The feud began in 1996 when Modi's family company had partnered with Disney to enter the Indian market, leveraging their tobacco distribution network to bring Disney content to cable operators. Murdoch's Star network then merged with ESPN Disney, and according to Modi's account, Murdoch orchestrated his ouster from the business despite his family's 50% ownership stake. Modi alleges Murdoch was a "sore loser" who couldn't tolerate Modi's successful challenge to Star's cheap cricket rights deals.
Star Disney countered with allegations that Modi had underreported revenues and accepted kickbacks from cable operators, leading to lawsuits and Modi's ultimate ejection with no compensation. From Modi's perspective, he had "started Disney India, modernized cable in India, brought sports to India," only to be betrayed by Murdoch's corporate machinations.
The feud's climax came in 2005 when Modi confronted Murdoch directly at a "friendly Friday afternoon tea," terminating Star's contract and demanding minimum bids of $500 million for cricket rights—10x their current payments. Murdoch dismissed this as impossible, declaring himself "the only game in town." Modi's response was devastating: he engineered Nimbus's $620 million winning bid, completely shutting Murdoch out of Indian cricket. Even after achieving this victory, Modi maintained his grudge, stating he had "blacklisted Rupert Murdoch" from IPL rights auctions years later. The feud only ended when Disney acquired Star in 2017, bringing Murdoch's empire back into Indian cricket through corporate acquisition rather than direct negotiation with Modi.
The Rise of India's Middle Class
The IPL's explosive growth rode the wave of India's unprecedented middle-class expansion, creating the perfect economic foundation for premium sports entertainment. In the early 1990s when Modi first entered the media business, only 2 million Indian households had disposable income exceeding $10,000 annually. By 2005 when Modi revolutionized cricket rights, this had expanded 10x to 20-30 million households, providing the initial advertiser base that justified massive sponsorship increases.
The transformation accelerated dramatically during IPL's existence. India's middle class—defined as annual income between $7,000-$45,000—grew from those initial 20-30 million households to 550 million people by 2024, representing 31% of the population. Remarkably, this 31% figure equals more than the entire United States population, creating an addressable market larger than any single Western country.
The government's own statistics reveal the scope: 250 million people were lifted out of poverty between 2015-2024 alone, essentially adding an entire America's worth of new consumers during IPL's second decade. This expansion directly correlates with media consumption and advertising spending, as India's total advertising market grew from $2 billion in 2007 to $20 billion by 2024—a 10x increase matching the middle-class growth trajectory.
GDP per capita growth of 10% annually and advertising market expansion of 6-7% yearly created the economic substrate supporting IPL's media rights escalation from $60 million to $1.25 billion annually. Each media rights auction captured the expanding purchasing power of this emerging consumer class, as brands recognized cricket's unique ability to reach India's newly affluent population through the only sport commanding 93% of Indian sports viewership hours.
The Tech Waves
The IPL’s explosive growth also rode several technological waves:
Television Penetration Wave: TV household penetration grew from 40% to 74% during IPL's existence, creating the foundational media consumption infrastructure that enabled mass cricket viewership and advertising market expansion
Mobile Data Revolution: Reliance Jio's 2016 launch was transformational, expanding smartphone ownership from 30 million to 800 million users within six years by making data plans "effectively zero," enabling IPL's streaming dominance and direct-to-consumer engagement
Streaming Infrastructure Maturation: David highlighted how the 2022 rights deal split between traditional TV and digital streaming represented a "generational shift," with streaming rights commanding equal value to television despite being "small but growing way faster," positioning IPL for future cord-cutting trends
These technological shifts created compound advantages for IPL's market position by expanding addressable audiences exponentially while providing multiple monetization channels. The mobile revolution particularly strengthened IPL's competitive moat by enabling real-time engagement during matches and creating year-round fan connection beyond the eight-week season.
How IPL Perfected Sports League Design
The IPL represents the culmination of global sports league evolution, synthesizing the best elements from established leagues while innovating beyond their limitations. Ben and David identified this as "the most perfect sports entertainment product that mankind has ever known," achieved through five essential design elements that traditional leagues couldn't implement due to historical constraints.
Competitive Balance Through Auction Innovation: IPL's transparent player auctions eliminated the corruption and side-dealing that plagued salary cap systems. By collapsing all negotiations into "a single point in time, everybody in the same room with the same finite resources," the league achieved true price discovery while preventing wealthy owners from circumventing spending limits through external incentives. Every three years, a "super auction" resets the entire player pool except for four retained franchise players, ensuring no permanent dynasties while maintaining some fan continuity.
Asset-Light Business Model: Unlike traditional leagues where stadium debt cripples team economics, IPL franchises operate entirely asset-light, playing in BCCI-controlled venues without capital expenditure requirements. This eliminated the stadium debt crisis that affects English Premier League teams and allows franchise owners to focus purely on competitive and marketing excellence rather than real estate management.
Central Revenue Maximization: IPL achieved optimal central revenue sharing (85% central, 15% local) compared to other leagues' varying models. All media rights and major sponsorships are negotiated centrally and distributed equally, eliminating market size advantages while ensuring every match receives premium production values. The one-game-per-night schedule maximizes advertising inventory value and appointment viewing.
Female Audience Integration: No other men's sports league achieved IPL's 50-50 gender viewership through deliberate Bollywood integration and soap opera competition strategy. This doubled the addressable advertising market and enabled beauty brands and female-focused products to sponsor male sports teams for the first time globally.
Perfect Product-Market Fit: The league launched with T20's compressed three-hour format perfectly suited for primetime television, contrasting with Test cricket's five-day format or One Day Internationals' eight-hour duration. Combined with evening scheduling, this created "Monday Night Football every single night" for two months, ensuring consistent audience habits and maximum cultural penetration.
BCCI Structural Advantage: The unique regulatory structure where teams operate under BCCI umbrella provided player contract enforcement and competitor suppression that no other league enjoys, creating an insurmountable moat through governmental backing rather than purely commercial advantages.
Could This Have Been Possible Without Lalit Modi's Methods?
The IPL's creation required Lalit Modi's specific combination of vision, ruthlessness, and willingness to operate in India's "low trust environment," raising fundamental questions about whether such transformational value creation was possible through conventional means. Ben and David's analysis suggests the answer is definitively no—the league's success demanded Modi's particular approach to deal-making and relationship management.
Modi's key innovation was structuring "no risk transactions" where every party achieved immediate profitability while building toward long-term value. The Shah Rukh Khan franchise deal exemplified this: Modi guaranteed Nokia's $5 million jersey sponsorship would cover the first year's franchise fee, making team ownership essentially free while providing the Bollywood credibility necessary for female audience capture. Traditional regulatory approaches would have required transparent bidding without such creative financing structures.
The media rights escalation from $60 million to $620 million within two years required Modi's willingness to engineer competitive bidding where none existed, bringing Disney, Sony, and various international players into bidding wars against established incumbents. His practice of "finding the money to cover costs in year one" with backend payment structures enabled massive upfront commitments that conventional financing couldn't support.
Most critically, Modi's corrupt practices—alleged stake holdings in three franchises, kickbacks, and betting involvement—may have been necessary evils for creating stakeholder alignment in India's institutional environment. The BCCI's quasi-governmental structure required someone willing to personally benefit from success while delivering value to all participants, creating incentive alignment impossible through pure regulatory oversight.
The Supreme Court's subsequent governance reforms proved this thesis: once institutional frameworks were established post-2015, international private equity firms like CVC and Redbird invested billions without requiring Modi-style entrepreneurial intervention. However, the initial value creation and market establishment required an entrepreneur willing to operate outside conventional constraints, suggesting transformational businesses in low-trust environments may inherently require morally ambiguous founding methods.
Bear, Bull and Mega Bull Cases
Bear Case: Structural Limitations
The November 2024 Viacom 18-Star Disney merger created one dominant bidder for $6+ billion rights packages, potentially killing competitive tension that drove previous media rights escalation. Without Google, Meta, or alternative deep-pocketed bidders, future growth could stagnate regardless of demographic trends.
Streaming monetization execution risk threatens the foundation. Viacom 18's $3.1 billion digital investment requires aggressive subscriber growth and advertising yield improvements. Failure could destabilize the entire media ecosystem for subsequent auctions. Any regression in India's governance improvements could undermine foreign institutional investment critical for global expansion.
Bull Case: Path to NFL Scale
David and Ben identified clear pathways for IPL to reach NFL-equivalent revenues. India's advertising market growing 6-7% annually from $20 billion could support 5-10x media rights increases over twenty years, reaching $12+ billion annually. The demographic foundation surpasses the NFL's saturated 500 million North American addressable market—India's middle class is projected to double again to over 1 billion people.
Inventory expansion offers immediate 2x upside. The current 74-game season represents massive underutilization versus MLB's 2,500+ games or NFL's 285 games. Adding teams and extending the eight-week season could double total games played. Stadium infrastructure development with sovereign wealth fund investment could boost local revenue from 15% to the NFL's 35-40% model through luxury suites and mixed-use development.
Mega Bull Case: Global Expansion and IP Monetization
The mega bull scenario requires IPL breaking beyond traditional cricket markets. The 2028 Los Angeles Olympics featuring T20 cricket could catalyze American interest as baseball continues declining among young demographics. David argued cricket's compressed format and soap opera elements could fill entertainment voids left by baseball's 162-game dilution.
IP monetization through "Drive to Survive for cricket" documentaries could create global audiences independent of cricket knowledge. The league's inherent drama—Bollywood stars, player transfers, auction spectacle—provides perfect reality content.
Gambling legalization in India would unlock $750 million per match currently flowing to foreign bookmakers. IPL-affiliated leagues worldwide could create year-round cricket ecosystems maximizing engagement beyond the two-month Indian window.
Powers
Cornered Resource power as IPL's primary competitive advantage. They emphasized that the BCCI's control over Indian cricket players creates an insurmountable barrier to competition, as David explained: "If you are creating or running a sports league, it is of paramount importance that you have the best players in the world. If you do not have the best players in the world, you're toast."
The hosts analyzed why this cornered resource proved decisive against rival leagues, noting that while India represents only 35% of global cricket fans, the geographic dispersion of other cricket markets made it impossible for alternative leagues to achieve sufficient talent density. Ben highlighted the self-reinforcing nature of this advantage: "Once you get someone from the West Indies, you get all the small countries. Then suddenly you build from 35% to maybe 45% or 50%. These blocks of 10% and 15% are dominoes that fall into you because now you've, as the biggest player, aggregated all the small ones."
Scale Economies emerged as a secondary power through production values and media rights bundling. David noted that IPL's broadcast quality now approaches "NFL Monday Night Football levels" due to massive investment in cameras, graphics, and commentary infrastructure that smaller leagues cannot replicate. The central media rights model creates additional scale advantages by guaranteeing every match receives premium production treatment.
Playbook
Assets Get More Valuable with Right Owners: Ben emphasized that "Shah Rukh Khan deciding to own that team made it much more valuable" compared to passive financial ownership, demonstrating how strategic owner selection can create exponential value multiplication beyond pure capital deployment. This principle extends to the broader Bollywood integration strategy that unlocked female viewership and created brand associations worth millions beyond the initial franchise investment.
Sports Teams as Premium Assets: Drawing from Arvind Navaratnam's research, Ben highlighted that major sports leagues outperformed stock markets from 1961-2024 (13% vs 10% annually) with lower volatility and uncorrelated returns, making franchise ownership particularly attractive during economic uncertainty. India's disproportionate billionaire population relative to GDP creates additional scarcity premium for the limited IPL franchise opportunities, with hundreds of potential buyers for only 10-12 available teams.
Quintessence
Ben: League Design Perfection: "If you were to design a sports league to maximize the bottom line, this is how you would do it." Ben emphasized that IPL represents the theoretical optimum of sports business architecture, combining competitive balance, entertainment value, and revenue maximization in ways that established leagues cannot replicate due to historical constraints and entrenched interests.
Ben: Perfect Storm Analysis: "IPL is the product of Indian Middle Class Emergence x TV Penetration x Smart Phone Explosion." Ben identified IPL as the mathematical result of three converging trends: India's middle class growing from 2 million to 550 million households, TV penetration rising from 40% to 74%, and smartphone adoption exploding from 30 million to 800 million users. This multiplication effect created unprecedented entertainment demand and consumption infrastructure.
David: Entertainment Innovation: "They designed the most perfect sports entertainment product in the history of the world." David argued that IPL surpassed even the NFL by intentionally architecting every element for modern media consumption, from one-game-per-night scheduling to 50-50 gender viewership through Bollywood integration. Unlike the NFL's accidental evolution into television dominance, IPL was purpose-built for the streaming and social media era.
David: Media Property Supremacy: "Sports are the most important media properties" because they provide the only remaining source of true uncertainty and appointment viewing in an on-demand entertainment world. David positioned IPL within this context as potentially "not crazy to say it could be bigger than the NFL" given India's demographic advantages and the league's superior structural design for global expansion and audience engagement.
Carveouts
Ben's Carveouts:
Severance Season Two: Exceptional cinematography and storytelling representing "a work of art" with brilliant execution that restores faith in mystery box television after Lost's disappointment
Acquired NYC Event: July 15th save-the-date announcement for first New York City live show with JP Morgan Payments partnership
David's Carveouts:
Stratechery by Ben Thompson: Highlighting Ben Thompson's continued excellence in his second decade, particularly praising both the core Stratechery newsletter and Sharp Tech podcast as potentially his best work yet in the AI era, crediting Thompson as ongoing inspiration for Acquired's approach
Family Travel Minivan Rental: Practical parenting advice about renting minivans for family trips, emphasizing sliding doors and cargo capacity benefits despite not wanting daily minivan ownership in San Francisco
Additional Notes
Episode Metadata:
Episode: Spring 2025, Episode 3
Title: "The Complete History & Strategy of Indian Premier League Cricket"
Duration: 4:28:06
Release Date: March 23, 2025
Hosts: Ben Gilbert and David Rosenthal
Related Episodes:
The NFL (Season 12, Episode 1)
The NBA (Season 7, Episode 4)
BAMTech, Disney and "the Biggest Media Company You've Never Heard Of" (Season 1, Episode 37)
Key Sources:
Worldly Partners' Multi-Decade IPL Study by Arvind Navaratnam
"A New Innings" by Manoj Badale (Rajasthan Royals owner)