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Why BCCI postponed IPL? Calling off the league would have cost Rs 3000cr

An official of a team that competed in the playoff last season said the decision to call off the IPL will 'cause a bloodbath.' "A cancellation would cost all the stakeholders around Rs 3,000-to-Rs 3,500 crore," the official said.

Written by Mihir Vasavda , Shamik Chakrabarty | Kolkata, New Delhi | Updated: March 14, 2020 8:39:58 am
The IPL season has been deferred till April 15. (Twitter/IPL)

For the Board of Control for Cricket in India (BCCI), postponing the money-spinner Indian Premier League (IPL) was a more viable option than calling it off completely, which would have cost them, the tournament’s broadcasters and the franchises at least Rs 3,000 crore collectively.

In fact, a franchise official said from a commercial point of view, the teams even preferred playing in front of empty stands rather than not playing at all or going ahead without foreign players, which ‘would have taken some sheen off brand IPL’.

Amidst mounting pressure, the Indian board, on Friday, decided to defer the tournament till April 15 in the wake of the Coronavirus outbreak. The franchise official said postponing the tournament in the prevailing atmosphere was the best available option as it had ‘little-to-no financial implication.’ The board will meet officials from the eight franchises in Mumbai on Saturday, where the nitty-gritty of the truncated season is likely to be finalised.

With global sport under a virtual shut down after the World Health Organisation declared Coronavirus a pandemic, the BCCI had been under fire for pushing ahead with the IPL, which was originally scheduled to begin on March 29. There were calls from several quarters to cancel the tournament but franchise officials said that option has not considered.

An official of a team that competed in the playoff last season said the decision to call off the IPL will ’cause a bloodbath.’ “A cancellation would cost all the stakeholders around Rs 3,000-to-Rs 3,500 crore,” the official said. Another team executive added: “Every franchise will lose in excess of Rs 100 crore that they get from the BCCI from broadcast revenue and share from central sponsors.”

READ | IPL 2020 postponed due to coronavirus, to start from April 15

The BCCI itself will suffer a revenue loss of Rs 2,000 crore upfront. The board gets Rs 3,000 crore per year from Star as broadcast revenue, which is shared on a 50:50 ratio with the franchises. Vivo, the league’s title sponsor, gives the cricket board Rs 500 crore per year. Each franchise, the source said, stands to lose anywhere between Rs 35 crore and Rs 75 crore, depending on the number of sponsors they have. The loss from gate receipts will be in the range of Rs 20 crore to Rs 45 crore, based on the city where the franchise is based.

600 jobs at stake

Then, there are the ancillary industries. “Across all eight franchises, the cost of flights and hotels is around Rs 50 crore. So they will be affected too,” an official said. “All franchises combined hire around 600 people, which includes freelancers and people on the payroll. Without any revenue coming in, their jobs will be impacted. That figure would be approximately Rs 10 crore.”

The IPL has been held in a different country due to domestic problems but never, in its 12-year history, has the tournament been cancelled. There was a question mark over this season’s IPL, though, after the government issued an advisory that practically barred all foreigners from entering the country from Friday evening till April 15. Additionally, the sports ministry also advised the BCCI, among other federations, to conduct matches without spectators in a bid to avoid mass public gatherings, which increases the risk of the disease spreading.

READ | Sports events across globe get cancelled, postponed or behind closed doors

A team official said they ‘preferred’ the option of having the matches behind closed doors rather than not conducting at all. “In terms of ticket revenues, there is a precedent where the franchises were compensated by the BCCI when the tournament was shifted to South Africa in 2009,” the official said. “Gate receipts form about 15 percent of the overall revenue. So it’s sizable and important, but the BCCI will compensate.”

On Friday, the Delhi government, too, issued an order which stated that they will not permit “gatherings (including IPL…) beyond 200 people” at events held in the National Capital Region. While that will not hamper the match-day operations, the biggest ‘stumbling block’, the official said, will be the unavailability of foreign players because of the visa restrictions.

READ | Manish Sisodia says no to IPL matches in Delhi

The official said a lot of teams, especially Sunrisers Hyderabad and Rajasthan Royals who depend a lot on their imports, are not keen to play without them. “As a concept, making it a domestic tournament will take the charisma out of IPL,” the official said.

Since it is still not clear if the government will start issuing visas April 15, when the IPL is likely to start, the teams are now formulating to Plan B. One of the franchises, which was scheduled to begin its pre-season training from March 20, is now likely to postpone it by a week. And if the restrictions are not lifted, the team is planning to hold a preparatory camp for its foreign players in Australia. “That way,” the official said, “both sets of players will at least be prepared when the season begins on April 15.”

That is if the situation on ground, vis-a-vis the virus, improves.

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