Why rescheduling of IPL will take precedence over T20 World Cup for BCCI
The multi-billion dollar global sports industry is staring at unprecedented financial fallout as a result of the Covid-19 pandemic. Cricket is no exception. Players are expecting pay cuts, and cricket boards are surely gearing up for tough negotiations with broadcasters. The England and Wales Cricket Board (ECB) is the first of the sport’s governing bodies to announce a relief package, worth 61 million pound to confront what they called the “biggest challenge in our history.”
The International Cricket Council (ICC) is betting big on conditions easing to allow the T20 World Cup in Australia to take place as scheduled—Oct 18-Nov 15—to help the game through the crisis.
In reply to a query by Hindustan Times as to whether ICC too was considering pay cuts/layoffs, they said: “At this stage we have nothing to say regarding finances, but you should understand that unlike leagues, etc., we are not reliant on weekly sport to sustain us; ICC events do that. Right now we have the luxury of time with 6.5 months to go until our next planned major event.”
The Australian government, however, sealed the country’s borders till September 19, raising doubts about whether it will be possible to put the logistics in place for an event like a World Cup.
“With regard to the venues, we have just used most of them for the women’s event (February 21-March 8) and are very comfortable with them,” the ICC said. “Additionally, we have a local organising committee on the ground in Australia, along with Cricket Australia who manage these things on a daily basis so we do not consider this an issue. We are continuing to plan for the event in October.”
Even if the pandemic recedes in time for the ICC to hold its mega event, it may face another challenge—the Board of Control for Cricket in India (BCCI). The Indian cricket board does not overly rely on the ICC’s revenue share, but it does depend on the treasure chest called the IPL. The league currently stands suspended till April 15, but officials admit that it looks unlikely that it could resume any time soon.
A BCCI official said that a rescheduled IPL’s best window is September-October.
Former England captain Michael Vaughan made a similar suggestion on Twitter: “I would play a 5 week tournament Sept/Oct including all players as a warm up for the T20 WC.”
A leading BCCI official echoed Vaughan’s sentiments. “Why should Indian players have to suffer any losses? They contribute to the revenue pool. And, the IPL isn’t cancelled, yet,” the official told HT.
If IPL 13 is cancelled, what kind of financial fallout can the BCCI expect? Analysing publicly available figures, the Indian board stands to earn approximately a total of around R2500 crores from the two-month IPL window, much more than its annual ICC share (R380 crores), and the estimated R952 crores they are expected to generate from international action at home, if all 17 bilateral matches are held in 2020-21.
Here’s how the revenue set up works: the annual media rights for the IPL, paid by Star India, is R3270 crores. The title rights held by Vivo is for R440 crores per year, and approximately R200 crores come from the seven central sponsors. That makes a central revenue pool of around R3910 crores—half of which goes directly to the BCCI, and the other half is distributed among the eight franchises. The franchises give back 20 % of this share to the BCCI, and part with another 20% of earnings from their own sponsorship deals and gate sales.
What happens to these deals if the IPL is cancelled? There is no clarity on whether any part of the board’s IPL earnings is insured.
“There’s no point in counting losses right now. We will have to wait for the next government directive, before we reassess things” says BCCI treasurer Arun Dhumal.
Star India refused to comment for the story.
Nandan Kamath, a top lawyer with a keen understanding of sports law, opines that the BCCI has the most to lose in the case of a non-IPL year. “What we will see is the long term contracts with broadcasters and central sponsors getting pushed out for one additional year to accommodate an extra season. For the broadcasters, the immediate impact will be on profits, which will be pushed back by a year, as they will not have to incur rights acquisition costs this year,” said Kamath. “But if the tournament is not held, BCCI and the franchises lose their respective shares of one-year’s worth of IPL revenues. This would in turn impact the distribution chain – the state associations share, the player fees for IPL etc.”
Which is why, if sports and cricket are at all resumed this year, the rescheduling of the IPL will take precedence for India. But that would also entail hard decision-making on the 17 bilateral matches across formats that Team India is supposed to play at home in the next twelve months. Between broadcast, jersey, title and apparel rights, the BCCI was set to make R56 crores per match.
With all countries scrambling for a window to re-schedule their own cricket, BCCI president Sourav Ganguly’s inter-personal relations with member boards, and the ICC, will hold the key. That’s if the virus gives cricket, and sports in general, a chance.