The whole world is suffering from Covid-19, and due to it, many cultural and sporting events have either been cancelled or postponed. When it comes to cricket, then the biggest league in the world, Indian Premier League (IPL), has been suspended till April 15.
The President of the Board of Control for Cricket in India (BCCI), Saurav Ganguly, had given the impression that the 13th season of IPL can be shortened.
It is clear that if IPL gets shortened or in the worst possible scenario, it gets cancelled, then BCCI would suffer a significant loss. But to what extent will the damage take place? Well, as per TOI, there are three possibilities which may happen, and loss will follow accordingly.
As per the first possibility, things get better by around mid-April, and a 60-match tournament gets conducted between some time then and the first week of June.
The second possibility suggests a condensed tournament, and if that happens, then – the number of days and matches will get reduced.
The third equation is ‘force majeure,’ which means an unforeseeable event that prevents the fulfillment of a contract.
In all three cases a loss will be incurred, but to what extent, let’s have a look:
If the possibility one comes into play, then the damage will be nominal, as it will only affect sponsors, and broadcasters. The rest, meaning, BCCI, franchises, cricketers, match officials, support staff, groundsmen, and other working hands, will not be impacted by it.
If the second equation comes into effect, then the losses will be slightly high as compared to the first situation, as several stakeholders, including the cricketers, will face the heat. The broadcasters, who have already sold 90% of advertising stock for this season, will have to be recalled.
When it comes to the sponsors – both central and local – they will look to grab other available sponsorship slots in equivalent sectors such as mainstream entertainment on television and the internet. This is so because cinema halls and other public places will remain shut due to the coronavirus threat.
It also means that the BCCI’s revenue from the central pool of sponsors will get hit because broadcast partners and other sponsors will pursue pro-rata negotiation, which will depend on the number of matches played and the number of days available.
Similarly, the hospitality and airline industry will take a toll as travel and stays will reduce, and due to it, the players and match officials too will get paid in equal proportions.
The third and final possibility suggests that everyone will face loss as in this situation, the tournament will not happen, and everybody will go to their homes without anything.
Now let’s talk about numbers as to what will be the roundabout figure of loss in all the three conditions:
Possibility one: As per TOI’s analysis, broadcasters Star India and the sponsors which include big fish Vivo, collectively bring around Rs 4,000 crore per year (In approx: Star brings INR 3,300 cr, Vivo brings INR 439 cr, and other central sponsors bring about INR 250-300 cr), but this will happen only if a full tournament takes place.
The BCCI and franchises, on the other hand, are contractually obliged to share this money on a 50:50 ratio. The players in this situation will get paid in full by the franchises (Rs 85 cr is the total purse cap per franchise). Also, the match officials and other employees will be paid in full.
Franchises will also get to earn from local revenue pools (except gate money which can be a loss of anywhere between Rs 2.5 to 4 cr per venue per game), and event-management agencies like IMG (paid approx Rs 25 cr) will be paid too.
Possibility two: In case of a shortened IPL – broadcasters and the board will have to figure out on the grounds of the number of matches, and a number of days, depending on how the tournament gets conducted. Therefore, all stakeholders will have to bear a pay cut, and players will also get paid on an equal pay basis.
Possibility three: The third equation will impact many, and nobody will get anything. Main broadcaster Star India won’t make money from advertising and distribution, which means they won’t pay an approximate value of INR 3,300 crore to BCCI.
Similarly, Vivo and other sponsors won’t pay INR 439 cr and INR 250-300 cr to the board. It also means that BCCI and franchises won’t get anything, and players who are supposed to get INR 85 cr multiplied by eight teams, won’t get paid by the franchises.
The event management companies, match-officials, and the boards of overseas players who get a 10% participation fee won’t get anything from BCCI. Overall, nobody will earn anything if the third possibility takes place.