Indian Premier League: At what cost must show go on?

Scrapping IPL will cost at least BCCI Rs 150 cr as franchisees ponder revenue-sharing in case of 6-team edition.

Kolkata | Mumbai | Updated: March 28, 2014 4:44:33 pm
Out of six editions of the Indian Premier League, Chennai Super Kings and Rajasthan Royals put together have won half of them (File) Out of six editions of the Indian Premier League, Chennai Super Kings and Rajasthan Royals put together have won half of them (File)

Welcoming Supreme Court’s proposal to suspend Chennai Super Kings and Rajasthan Royals, IPL governing council member Subir Ganguly has said the Board of Control for Cricket in India (BCCI) stands to lose Rs 150 crore if the tournament is scrapped.

Ganguly hoped the BCCI boots out the two teams to ensure ‘cricket is free of corruption’ but insisted they’ll have to gauge the mood of other franchises before taking a decision. “The state associations will lose out on Rs 10-12 crore each. It would be a difficult decision and many issues will have to be dealt with. We’ve to see what the franchises are thinking, check if the BCCI can compensate them adequately, new itinerary has to be chalked out and number of matches would be less,” said Ganguly. “From sponsorship to broadcast rights, a lot of things have to be taken into account. Still I believe, if the BCCI and franchises are willing, the show can go on.”

A senior official associated with one of the former IPL champions said they will seek postponement of the seventh edition if CSK and Royals are banned. However, he insisted that the removal of two IPL franchisees is not in the best interest of remaining six teams as well. The franchises are playing a wait-and-watch game before deciding future course of action.

He said their main concern is revenue sharing, which is a club’s major source of income. However, he insisted the teams are not panicking yet. “It’s not fair to speculate. We do not know what’s going to happen. But if the two teams are banned, then I can’t see how we can go ahead,” the official said, requesting anonymity.

The IPL has a projected income of $1.6 billion over 10 years through sponsorships. The franchises get 54 per cent of it, 40 per cent go to the IPL itself, while six per cent is set aside for prize money. Last year, the BCCI struck a sponsorship deal with Pepsi for around $60 million which is valid for three seasons. The BCCI also sold the TV rights for $1.4 billion for 10 years to Sony Entertainment Television, and 72 per cent of the proceeds are supposed to go the franchises.

Planning out for a toss

“If two teams out of eight are ousted, then all the permutations and combinations have to be reworked. We plan a season’s budget knowing that we’ll be getting X amount from the central pool. Now if two teams go, then we have to rework the math and everything goes for a toss,” a team official said. “Even the local sponsorship deals will suffer. For example, Dhoni is the biggest draw at a match, from sponsors to gate receipts. If his team is scrapped, then all of us will be at loss.”

A lot of money is riding on Dhoni and CSK as well. In 2011, Aircel signed the most expensive sponsorship deal in the IPL, paying more than Rs 85 crore to renew their association. Chennai are also believed to have the maximum sponsors, with roughly 20 brands associated.

Shailendra Singh, joint MD of Percept, said the current crisis will give the brands an opportunity to re-negotiate their contracts with their respective IPL franchises over the next few weeks. ]


“The brands will see an opportunity in the crisis. Despite the current state of affairs, the viewership won’t be affected. The advertisers have so far paid huge amounts in an inflated market. Now, they will use this opportunity to re-negotiate their contracts and bring the cost down,” Singh said.

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