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CSK, Rajasthan Royals suspended for 2 years

Lodha panel slaps life bans on Meiyappan and Kundra

File photo of Gurunath Meiyappan (left) with Raj Kundra
BS Reporters Mumbai/Chennai
Last Updated : Jul 15 2015 | 1:47 AM IST
The Pepsi Indian Premier League (IPL) was thrown into turmoil after a three-member Supreme Court-appointed panel suspended Chennai Super Kings (CSK) and Rajasthan Royals, two of the top teams in the tournament, for two years. The committee, headed by former chief justice of India, R M Lodha, also slapped life bans on Gurunath Meiyappan, son-in-law of International Cricket Council President N Srinivasan, as well as Rajasthan Royals co-owner Raj Kundra, from any cricketing activity for their involvement in illegally betting on matches.

Making scathing remarks against the accused, Lodha said the credibility of the game had been damaged grievously. "His (Meiyappan's) habit of regularly placing bets in IPL matches renders the argument of his being first offender and unblemished antecedents in previous IPL tournaments of no worth. That he lost up to Rs 60 lakh in bets shows he engaged in heavy bets. It is his bad luck that he did not make money out of these bets," he added.


The committee, set up after the Supreme Court found Kundra and Meiyappan guilty of betting on the outcome of matches in 2013, also said its observations with respect to the much-talked about conflict of interest in the Board of Control for Cricket in India (BCCI) would be given after interactions with various stakeholders of the game were completed.

According to a PTI report, Indian Cements Ltd, owner of CSK, is planning to move the Supreme Court against the committee's order.

On Tuesday, the India Cements stock closed at Rs 90.75 on the BSE, down 3.66 per cent.

The suspension of the two teams will have major financial consequences on the glitzy T20 league. While the BCCI will lose about Rs 100 crore in annual franchise fees from the two teams, it also clouds the future of the tournament, as the number of teams will come down from eight to six.


Tuhin Mishra, managing director of Baseline, a sports marketing company, said. "If there are only six teams, the whole economic model of IPL will be affected, as there will be fewer matches and, therefore, lower broadcast revenue for BCCI. This means a lower share of revenue for the IPL teams. With six teams, the viewership will also be affected, as two hugely popular teams will be missing."

As such, the BCCI might be left with two options --- asking the current owners of the two teams to tender their shares in the teams back to the BCCI for re-auctioning, or calling for fresh bids for two new IPL franchises. IPL has a provision to conduct the tournament with 10 teams; once the suspension period is over, CSK and Rajasthan Royals can rejoin the league.

There is no word yet on the action BCCI plans to take. In a media advisory, Jagmohan Dalmiya, the board's president, said: "BCCI is committed to honour and respect judicial decisions and it would give its observations after the entire report is read and a collective decision is taken." He added BCCI was committed to ensuring transparency, accountability and cleansing the sport to restore the faith and confidence of millions of cricket lovers in the game in general and IPL in particular.

CSK and Rajasthan Royals account for about Rs 100 crore and Rs 70 crore in team sponsorship revenues, respectively, which will now be lost. More, experts believe the remaining teams might also be hit, as brand confidence in the tournament might decrease. A glimpse of this diminishing confidence was seen this year, as CSK lost brand value. Also, there will be a loss in terms of gate revenues, as CSK matches attract some of the biggest crowds. On an average, a team earns about Rs 20 crore from gate/ticket revenues.

According to an American Appraisal India (AAI) report released in April this year, the value of CSK, ranked third, fell from $72 million in 2014 to $67 million this year. AAI said the fall in brand value was due to a spate of controversies that dampened advertiser sentiment, as well as failure to improve the team's standing on the points table. Rajasthan Royals, however, managed to hold on to the fifth spot, with brand valuation of $45 million. The going will be difficult for the broadcaster, too. Multi Screen Media, the network that holds television broadcast rights for IPL in India till the 2017 season, pays about Rs 750 crore a year as broadcast fee. However, sources in the know say the contract has a caveat - a certain number of matches has to be played for the payment to be justified. When asked to comment on the matter, the broadcaster said it would be premature to do so.

The tournament's sponsors are in a similar predicament and have taken a wait-and-watch stance. Pepsi, the title sponsor of the tournament from 2013 to 2017, has agreed to shell out Rs 432 crore through this period. A PepsiCo India spokesperson said, "We remain committed to ethical conduct in sport and expect the issues surrounding IPL are adequately and swiftly addressed. The faith of cricket fans is important and needs to be restored in the interest of the game…We do not comment on contractual terms."

Telecom company Vodafone is another prominent sponsor. When contacted, the company said, "We are not commenting in this regard."

Asked about the financial losses to players of the two teams, Lodha said: "We did not consider financial losses to players and teams. That is not significant. The integrity of the game is what matters."
WHAT'S AT STAKE

Rs 100 cr
Amount BCCI will lose in franchise revenue a year

Rs 57.6 cr
Amount CSK pays to BCCI

Rs 42.3 cr
Amount RR pays to BCCI

Rs 62.3 cr
Amount CSK spent on player fees last year

Rs 52.35 cr
Amount RR spent on player fees last year

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First Published: Jul 15 2015 | 12:58 AM IST

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