The Board of Control of Cricket in India (BCCI) stands to lose around Rs 200 crore as a result of the decision to shift the second edition of its prestigious and profitable Indian Premier League (IPL) Twenty20 tournament to either South Africa or England. The decision follows the inability expressed by various state governments to provide security for the event, which overlaps with the general elections.
The IPL tournament is scheduled for April 10 to May 24 and the general elections from April 16 to May 13.
An announcement on the choice of the host country for the 59-match tournament is expected on Monday evening.
IPL Commissioner Lalit Modi, however, told the press that the organisation would take care of all the losses and extra expenses. “Because of this one-time exercise, we will not make any money on IPL this year,” he said.
“The costs of shifting to another country are prohibitive, but without that there will be no tournament. We are not looking at the losses at the moment,” he added.
The eight team franchisees, for instance, stand to lose around Rs 100 crore to Rs 110 crore from in-stadia ticket sales, the revenue of which entirely went to the teams.
IPL will also have to incur an additional Rs 80 crore to Rs 100 crore on travel (for over 150 players), hotels, logistics and the cost of venues in another country.
There is also uncertainty over whether companies that have booked space for in-stadia advertising will agree to put in money in a different country with few spectators on the ground. Last year, in-stadia advertising provided about Rs 150 crore of revenue.
Some money, however, will be recovered from in-stadia tickets at the new venues also, though they would be a fraction of ticket sales in India.
The decision to shift the IPL tournament out of India ends a dispute of several weeks between the government and IPL’s organisers over hosting the tournament at the same time as elections, following the March 3 terrorist attack on Sri Lankan cricketers in Lahore.
Indian cricket fans, however, will continue to see the matches during the peak hours of 4 pm and 8 pm in India, ensuring that advertisers who are expected to put in over Rs 450 crore to Rs 500 crore to buy time on TV do not exit altogether, which could lead to huge losses for the broadcaster SET MAX, BCCI and the franchisees. TV advertising forms the bulk of revenue from the tournament.
Meanwhile, sources said the legal row over the domestic broadcast rights between BCCI and the SET MAX channel may also be resolved. SET MAX bought the TV rights to the tournament and its contract was terminated a week ago, over allegations of past contractual violations.
Modi told reporters that IPL will try to make home bases for all the eight teams in the overseas destination on the lines of the tournament’s structure in India.
Media planners have welcomed the decision to shift the venue of the tournament. “With IPL likely to become a sought-after TV event, we are happy that we will be able to advertise on television and our clients will be able to meet their marketing objectives,” said a senior media planner in a large media agency in Gurgaon,
A leading advertiser in IPL added: “We would have shifted our advertising to other programmes on peak time had IPL not taken place, which would have benefitted entertainment channels. But clearly, that will not happen now as the timing has been unchanged.”
BCCI, however, squarely blamed the government for its decision to go abroad. Speaking to reporters after the board’s emergency working committee meeting, Shashank Manohar, BCCI President, said: “Because of the attitude of the government that it is not ready to spare security forces for the cricket tournament we have been forced to take the decision to move the event out of India.”
Franchisees cautiously welcomed the move after an hour-long meeting with the BCCI leadership. “The BCCI and the IPL have assured us that they will bear all the expenses as a result of the tournament shifting overseas,” said Neeta Ambani, co-owner of Mumbai Indians.
Added Vijay Mallya, owner of Bangalore Royal Challengers and head of Kingfisher Airlines: “Being the official airline of IPL, we will offer special packages for fans who would like to go overseas to support their local teams.”
Film actor and part-owner of Kolkata Knight Riders Shah Rukh Khan said his team will require five to seven days to finalise the logistics of overseas travel.