Kolkata Knight Riders batsman Manvinder Bisla is watched by Chennai Super Kings captain Mahendra Singh Dhoni

The sight of Australian cricketer Ricky Ponting flying through the air to take a dramatic one-handed catch brought a stadium of cheering fans to their feet in Mumbai last week, with tens of millions more tuning in outside to watch as the Indian Premier League returned for its sixth season.

But while the IPL’s mix of star foreign players and Bollywood glitz draws sports aficionados and corporate sponsors alike to the world’s most lucrative cricket tournament, it has yet to solve a problem facing its teams – almost none of whom turn a profit.

Indian cricket is a big money spinner, in theory at least. Since its 2008 launch the IPL, which involves a zippy three-hour version of the otherwise slow-moving sport, has won a series of large sponsorship packages, including a 10-year broadcasting deal with Sony, worth $1.6bn.

Some doubts surfaced last season, when ratings declined and high-profile sponsors didn’t renew contracts. But matters now seem to have reverted to India’s cricket-crazed norm, with viewing figures bouncing back, and the IPL unveiling another Rs4bn ($74m) deal with beverage group Pepsi.

All this income helped the tournament to build a brand worth $2.9bn last year, according to consultancy Brand Finance, while earning handy profits for its main backers, the Board of Control for Cricket in India, the sport’s governing body.

Not so the teams. Reliable figures are hard to find, but most observers say leading franchises such as the Mumbai Indians, owned by billionaire industrialist Mukesh Ambani and for whom Mr Ponting wields his bat, are lossmaking.

“I can’t imagine them being profitable,” says a senior executive at a rival team, speaking on condition of anonymity, an analysis that holds true for all but one or two of the tournaments nine participants.

Rich players are part of the problem: the IPL has a salary cap, but many spend up to the $12.5m limit, while also finding crafty ways to pay extra to their most valuable stars.

Broadcasting income is relatively static, while a combination of cost-conscious fans and rampant piracy limits the ability to sell expensive team-branded kit. Rickety Indian stadiums also make fancy corporate hospitality packages difficult.

Add to this the franchise fees each team must pay the IPL every season, and finances look stretched. “The game has great glamour, but people now realise losses can be huge too,” says Avinash Kalia, a director at PwC, who has studied the game’s finances.

This doesn’t seem to trouble every team, many of which are run as playthings for high-rolling Indian tycoons with extensive lossmaking experience.

Vijay Mallya is one example: the owner of near-bankrupt Kingfisher Airlines also backs the IPL’s high-spending Bangalore franchise. Subrata Roy, head of troubled property conglomerate Sahara and owner of the Pune Warriors, is another.

Nonetheless some are trying to up their game, either by cutting player costs, or experimenting with new money-making ventures.

The Rajasthan Royals this year teamed up with an international travel agency, for instance, to try and to entice cricket-loving foreign visitors to its matches.

Others such as Chennai and Kolkata, have launched fee-paying members’ clubs. “Each of the teams is doing their bit,” says Sundar Raman, the IPL’s chief operating officer.

Behind these there lies a trickier problem, however, of how to build up a loyal urban fan-base willing to spend money throughout the year, when the tournament itself lasts for only eight weeks.

“Indian cricket has always been a national sport, and loyalty has been with the national team. So to suddenly expect people to be big supporters of a team based on a city for such a short event is hard,” says Venky Mysore, the former head of MetLife in India, and now chief executive of the Kolkata Knight Riders.

Kolkata is one of the IPL’s few profitable teams, helped along by its victory in last year’s tournament. But in the longer-term, Mr Mysore says, persuading more of India’s rising middle class to become loyal team supporters is the only way his team can enter the very top tier of global sporting brands.

“Whatever Manchester United make on merchandise or licensing, it makes it because of their huge fan base. It is just going to take us a bit of time to do the same.”

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