Who gains from the NPL’s growing commercial success?

Broadcasting rights, sponsorships and franchise spending are turning the NPL into a billion-rupee business, but the real test lies in who earns, who benefits and what gets reinvested

TU Cricket Ground, where NPL matches are being held. Photo courtesy: Nepal Premier League

KATHMANDU: While a competition between bat and ball unfolds on the cricket pitch, another competition outside the pitch is also intensifying, the competition of money, markets, and commercial opportunities. Until a few years ago, Nepalese cricket, struggling with limited resources and a lack of infrastructure, is now moving toward a commercial market connected with sponsors, franchise teams, broadcasting rights, ticket sales, and digital platforms.

The Nepal Premier League (NPL) is the latest example of this. With the start of the third edition of the tournament, discussions regarding the popularity and commercial potential of Nepalese cricket are happening once again. According to the Cricket Association of Nepal (CAN), it is estimated that economic transactions worth approximately Rs 1.5 billion will take place in this edition. Among this, it is estimated that income and transactions related to CAN will reach about Rs 700 to Rs 750 millions, and the eight franchise teams are also estimated to spend around that same amount.

However, while expecting such massive financial transactions in cricket, what is the actual return? Does the investment made in the tournament solely benefit the organizer and franchise teams, or does it also contribute to the overall development of Nepalese cricket, the financial security of players, the continuity of domestic tournaments, and the construction of sports infrastructure?

The growing popularity of cricket is a positive aspect. Yet, the question of whether that popularity can be converted into a sustainable economic foundation is even more important. This is because the success of any tournament is not determined solely by the crowds of spectators, discussions on social media, or large transaction figures. The income generated from it, transparency of expenses, employment, player development, and the benefits it provides in the future are equally important.

Large transactions, but how much profit?

The estimate of economic transactions worth Rs 1.5 billion from the third edition of the NPL demonstrates the commercial potential of Nepalese cricket. Nevertheless, transactions, income, and profit are three different subjects. Transactions refer to the total financial dealings between parties engaged in any economic activity. Income is the amount received by an institution or business through the sale of goods, services, or rights. The amount remaining after deducting expenses from income can be profit. Therefore, adding up the transactions of all parties related to the tournament and calling it the income or profit of a single institution is not correct.

NPL match. File photo

For instance, CAN can receive funds from sponsorships, broadcasting rights, and ticket sales. Franchise teams spend on player remuneration, management, travel, accommodation, publicity, and other tasks. They may also receive funds from sponsors. Transactions taking place in hotels, restaurants, transportation, and other businesses during the tournament can also be part of the broader economic impact. Still, all these amounts are not deposited into a single account.

According to the estimate made public by CAN Treasurer Padam Bahadur Khadka, transactions related to CAN in the third edition of the NPL are expected to remain at Rs 700 million to Rs 750 million. The owners of the eight franchise teams are also estimated to spend around that much on player management and tournament-related activities. By adding the economic activities of both these parties, the total transaction is estimated to reach Rs 1.5 billion.

However, the clear picture of economic success will be seen only after the tournament concludes and details regarding how much actual income was made, how much was spent, and how much profit each party earned are made public. Hence, the main question right now is not just whether a transaction of Rs 1.5 billion happens or not. It is about what the structure of that transaction is, whether there is double counting in it, how much the actual income is, and how much remains after deducting expenses. Since the same amount can be the income of one party and the expense of another, such double counting must be avoided when calculating total transactions.

Millions transactions in broadcasting rights alone

Broadcasting rights are among the primary foundations for commercializing sports. Earlier, spectators used to enjoy cricket only by going to the stadium or watching matches on television. Presently, digital streaming, mobile apps, and online platforms have expanded the mediums for watching sports. This very transformation has made cricket an important medium for advertising and commercial transactions.

For the third edition of the NPL, the CAN granted the global digital streaming rights to NetTV for Rs 180.4 million and the domestic television broadcasting rights within Nepal to Himalaya Television Network for Rs 146.4 million. Ticketing rights were secured by eSewa for Rs 8.5 million. The total fixed value of these three agreements is Rs 335.3 million.

This amount indicates that the commercial value of the NPL is increasing. Compared to the amounts received from broadcasting and ticketing rights in the previous edition, the value of the rights agreements for the third edition has increased significantly. Yet, an increase in the value of rights does not mean the profit of the tournament increases at the same proportion. For that, details of the total expenses of running the tournament and other incomes are necessary.

Before the start of the NPL match between Biratnagar and Chitwan

The return on investment is also important for the company purchasing broadcasting rights. They invest by keeping advertising sales, viewer reach, digital subscriptions, brand partnerships, and potential future commercial opportunities in mind. If a large number of viewers watch the matches, the interest of advertisers may increase. If the number of viewers decreases or advertising sales do not happen as expected, the return on investment made in broadcasting rights can be affected.

Consequently, when conducting the economic evaluation of the NPL, along with the fact of how much CAN sold the broadcasting rights for, the aspect of how much income the broadcaster was able to make from it is also important.

Where does sponsorship money go?

Sponsorship is the economic foundation of any commercial sports tournament. Companies invest in sports to promote their products and services, expand brand identity, and establish relationships with consumers. Because there is large spectator participation in cricket, the potential for sponsorship also increases.

CAN Treasurer Khadka stated that approximately Rs 200 million was raised from sponsorships in the third edition of the NPL. Nonetheless, the amount received from sponsorships and its final expense accounting are separate matters. The funds coming from sponsorships can be used for tournament operations, publicity, game management, technical facilities, management related to players and teams, and other necessary tasks. But to understand the specific headings under which amounts are spent, expense details are necessary.

An increase in sponsorships is a positive sign in itself. It can show that the private sector’s attraction toward the market of Nepalese cricket has grown. Still, the question of how much the funds received from sponsorships contribute to the long-term development of cricket must also be raised.

Tu Cricket Ground. Photo courtesy: RSS

Is sponsorship money spent only on the immediate management of the tournament, or is it also invested in youth player training, women’s cricket, age-group tournaments, coach production, and local infrastructure? Answers to such questions help connect commercial success with the development of sports.

If a certain share of the income received from the tournament can be invested in producing future players and developing domestic cricket, its benefit will not remain limited to a single season. That can prepare the basis for producing better players in upcoming years, raising the level of competition, and expanding the commercial value of Nepalese cricket.

Investment and returns of franchise teams

Another important aspect of the NPL is the franchise teams. In the franchise model, the private sector invests in team operations, player management, publicity, and commercial partnerships. This can connect cricket with the capital and commercial capacity of the private sector instead of relying solely on the budget of the organizing body.