Indian Premier League: Out of the frying pan...?

When cricketing legend Sunil Gavaskar says the Indian Premier League (IPL) without MS Dhoni will be a tough one, you can sense that something has gone seriously wrong with ‘India ka tyohar’, as the tagline for the tournament goes.

On Tuesday, July 14, 2015, the Dhoni-led Chennai Super Kings (CSK) and Shane Watson-led Rajasthan Royals (RR) were suspended from the IPL for two years by a Supreme Court-appointed committee in an attempt to clean up the league after it was hit by the 2013 betting scam. 

The scam also involved CSK and RR top officials Gurunath Meiyappan and Raj Kundra. 

Meiyappan, the former Team Principal of India Cements Ltd -owned franchise CSK and Kundra, co-owner of Rajasthan Royals (RR), were handed life bans from any matches conducted by BCCI.

Although CSK has planned to move the apex court against the panel's decision, experts feel the teams may not get the relief they expect, as it was a Supreme Court appointed committee, who gave the judgment.

Besides Dhoni, players like Suresh Raina, Ravi Ashwin, Faf-du-plesis, Dwayne Bravo, Steven Smith, Shane Watson and Ajinkya Rahane were the stars of these two highly successful IPL teams. What will happen to them now is anyone’s guess. 

Naturally, it is really hard for any cricket lover to imagine the world’s most talked about domestic T20 league without all these stars. It will be less fun for sure.

We look at the the possible aftermath of the SC panel's decision. 

What will happen to the structure of IPL? Will it be a six team competition or will the BCCI induct new teams in place of the suspended ones?

With the Lodha Commitee Verdict chopping off two teams it is now really a question of restructuring the cash-rich cricket league tournament, which will be bothering the BCCI.

For starters, under the current rules, the players from Rajasthan Royals and Chennai Super Kings cannot be absorbed into any other franchise, says a Times of India (TOI) report.

Raising the limits will put additional pressure on the team management, and such an absorption, would harm the prospects of new and upcoming cricketing talents as each team has a limit of 26 players and a fixed purse. 

If the BCCI decides to carry on with a six-team format for IPL9, the current structure of match allocations would allow only 34 matches. According to an Indian Express analysis, with an average of 8-9 matches a week, as per current state of broadcast schedules, the IPL would then be reduced to a four week affair rather than its usual seven-eight week run. 

Needless to say, revenues will be slashed significantly.

The stakeholders in the remaining six teams in all probability will not agree to suffer hefty cuts for what was not their fault.

Now, what if CSK and RR had a change in ownership? Termination of the two team’s contract from the BCCI side, as in the case of Deccan group’s Hyderabad, may result in legal battles, if the two franchisees decide to contest the decision in court. 

While a voluntary exit for both would be more peaceful, if the two were to sell their stake and profit from it, it would go against the spirit of Justice Lodha's verdict.

The BCCI, on the flip side, can invite bids for two fresh teams, while the owners serve out their two-year suspension. A report in TOI lists a number of major industry players who are likely to enter a bid, including Adani group chairman Gautam Adani, RPG group chairman Harsh Goenka, chairman of JSW Sajjan Jindal, and Videocon group chairman Venugopal Dhoot, among others.

“The league remains an interesting investment opportunity. If BCCI auctions a franchise, I will consider it only if the valuations are considerable,” said Harsh Goenka.

Also, with Kochi Tuskers winning their arbitration with BCCI, if it makes a comeback to IPL some players can be included in the franchise. However, one new franchise will still have to be auctioned.

What happens to the revenues and sponsors of IPL?

Speaking to the Economic Times Anindya Datta, CMO at Yes Bank, which is an official partner of the IPL. said that the strengthened governance structure and enhanced image of the IPL, would further build the popularity of the league and benefit all its stakeholders including sponsors.

According to a TOI report, the decision to suspend CSK and RR may actually harm the league brand, currently valued at around $4 billion by experts, in the long run.

Viewership -both in terms of ticket sales as well as on TV - hasn't stopped growing. In 2015 viewership numbers grew by over 20% over last year while television viewership for all formats of the game dropped by around 40% from 2008 to 2014.

A consortium of Sony Television network and the Singapore-based World Sports Group (WSG) on 2008 had secured the rights of the league (IPL) for ten years at a cost of more than $1 billion. As part of the deal, the consortium would pay the BCCI $908 million for the telecast rights and $108 million for the promotion of the tournament.

In 2013, Pepsi bid for the rights for five years and won it at Rs 396 crore.

IPL runs on a Central and Local pool of sponsorships for revenues. Broadcasters, tournament sponsors, title rights holders and bid monies form the central pool. Gate money, in-stadia advertising, franchise sponsors and merchandising make for the Local Pool. The Central Pool revenue is shared by all eight franchises on a percentage basis. The franchise has to fend for itself where Local Pool is concerned.

What about the players and support staff?

As far as players' issue is concerned, it will not be a serious concern. According to a report by espncricinfo, since all IPL player agreements are one-year agreements, all the players from the two teams can be part of the auction pool; the BCCI can, if required, devise a mechanism similar to the one in 2011 when Pune and Kochi franchises were allowed to sign a few players ahead of the auction.

Also, while it would be easy for the big names to get picked by the other teams, a large number of the total 59 players and 28 support staff released from the two team, might end up unsold for the next two years. 

TOP 5 PLAYERS UP FOR GRABS

MS DHONI

The India ODI team captain has been the captain for CSK since its inception. CSK had retained Dhoni last year for 12.5 crore

SURESH RAINA

The southpaw has been a core member of the CSK brigade from the begining. He has been retained by the team for 9.5crore for IPL 8

SHANE WATSON

The captain of the RR team has been instumental in the franchaises's success. RR had retained him at $2.2 million for IPL8

BRENDON McCULLUM

At $541,000, the Kiwi man was leading CSK in the batting dept. with 436 runs from 14 matches at a strike rate of 155.71

STEVE SMITH

With a 4 crore price tag, the young Austarlian has been a key player for RR.