Sunday, March 22, 2009

Economics of IPL Venue Change (update1)

It's an honest attempt at calculating IPL Venue shift's impact on India's GDP.

No. of Teams = 8
No. of Players in a team = 15
Team Size = 20 (Players + Coach + Manager + Physio etc.)
No. of Foreign Players in Each team = 4(assumption)
Duration = 45 Days

Consolidated team size = 20*8 = 160
No. of matches = 2*8C2 + 2 + 1 = 59

1. Hotel Accomodation = 160 * 45 * 5000 = 3.6 Crores (5000 per head per night)

2. Food Expenditure = 160 * 45 * 3 * 1000 = 2.16 Crores (1000 per meal)

3. Travel Expenses = 160 * 7 * 2 * 8000 = 1.792 Crores (7 away matches per team, 8000 per business class one-way ticket)

4. Ticket Revenue = 59 * 40000 * 500 = 118 Crores (Avg. Audience = 40000, Avg. Ticket Price = 500)

5. Shopping by Foreign Players = 4 * 8* 2 * 100000 = 0.64 Crores (Player including his girlfriend each shopping for 1 Lac)

6. Round Trip Travel from home to stadium by Audience = 40000/2 * 59 * 0.1 * 50 * 2 = 1.18 Crores (40000 Crowd, 2 per vehicle, 5km distance from Home to Stadium, 50kmpl Mileage, 50 Rupees per litre of Petrol)

7. Stadium Shopping by the Crowd = 59 * 40000 * 100 = 23.6 Crores (assuming Avg Spending on food and other merchandise = 100)

Total GDP Impact = 150.972 Crores

I'm sure I've left some expenses. Comments are invited to improve the calculations.

P.S All calculations are done in Indian National Rupee(INR)

6 comments:

Aparna said...

Whoa...that was fantastic although a little simplistic but i guess thats what makes it so readable n interesting!Good job :D

Anonymous said...

Dei, Most importantly the shopping done by the fans in the stadium and also on the franchise merchandise. Also, how can u miss the taxes and broadcasting benefits???

Natrajan said...

@ Harish

1. I shall include shopping by fans in the stadium.

2. The franchise merchandise can still be sold in stores like before.

3. Broadcasting Benefits are the same irrespective of location of the match. (Since the rights are already sold)

Since I'm calculating the impact of the venue change, 2 and 3 are still the same. I shall include 1 in my calculations.

Anonymous said...

"That is the whole idea of this machine, you know..." - Dr. Strangelove

Anonymous said...

A few things you have missed.
1. The salaries/payments to support staff - cheer leaders, side staff, etc.
2. Food/hotel/travel expenses of so many celebrities typically invited by SRK, Preity Zinta, and so on. However, there might be a case of this -ve effect being overcome by the higher revenue for airlines in case the players and celebrities choose to travel jet/air India for their flights abroad
3. The increase in sales in beer bars and pubs
4. I disagree that franchise sales would be same. The Kolkatans would have bought many more KKR dresses to wear to Edens than now

However, you should also consider the marginal rise in GDP now that many people would not be taking an off to go watch the match in the ground! :D

Sanjeev said...

that calls for some arithmetic ! nice one :)