The GST Council's decision to raise the tax on admission to IPL matches from 28% to 40% is expected to squeeze franchise revenues, especially for teams based in smaller centres outside metros, industry executives said.
Ticketing contributes an estimated 8-12% of team earnings depending on stadium capacity, but higher prices could impact attendance in non-metro markets. Franchises will now have to rethink pricing strategies to keep stadiums filled.
"Our ticketing revenues will take a hit since 40% GST is too high. The impact will be particularly severe for franchises outside metros and with lower capacity stadiums. In smaller centres, price elasticity is very less compared to metros. Stand tickets bring 85-90% of our ticketing revenues with corporate boxes bringing in the rest," said Punjab Kings CEO Satish Menon.
He added that IPL franchises are discussing the impact and may appeal to the GST Council to reconsider the hike in the coming days. Entry-level ticket prices vary widely, ranging from as low as ₹500 to upwards of ₹2,000.
Market watchers, however, said that the overall impact will not be significant. "The hike will have an impact, but it will not be very severe since tickets were already taxed at 28% GST. But the hike couldn't have come at a worse time since the ban on real money gaming is already set to hit sponsorship revenues," said Santosh N, managing partner at D & P Advisory.
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Ticketing contributes an estimated 8-12% of team earnings depending on stadium capacity, but higher prices could impact attendance in non-metro markets. Franchises will now have to rethink pricing strategies to keep stadiums filled.
"Our ticketing revenues will take a hit since 40% GST is too high. The impact will be particularly severe for franchises outside metros and with lower capacity stadiums. In smaller centres, price elasticity is very less compared to metros. Stand tickets bring 85-90% of our ticketing revenues with corporate boxes bringing in the rest," said Punjab Kings CEO Satish Menon.
He added that IPL franchises are discussing the impact and may appeal to the GST Council to reconsider the hike in the coming days. Entry-level ticket prices vary widely, ranging from as low as ₹500 to upwards of ₹2,000.
Market watchers, however, said that the overall impact will not be significant. "The hike will have an impact, but it will not be very severe since tickets were already taxed at 28% GST. But the hike couldn't have come at a worse time since the ban on real money gaming is already set to hit sponsorship revenues," said Santosh N, managing partner at D & P Advisory.
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