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Six-team IPL may disrupt BCCI’s economics: experts

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MUMBAI: When Justice Lodha committee spelt a part of its landmark verdict on 2013 Indian Premier League (IPL) betting case on the afternoon of 14 July, 2015, many ripples were created.

IPL is the largest revenue generating property of the Board for Control of Cricket in India (BCCI). As per the board’s 2013-14 annual report, gross receipts from IPL 2013 were Rs 1194 crore as against Rs 892 crore in 2012. The main reason behind the increase in gross receipt, as per then honorary treasurer, was mainly incline in receipts from media rights which has gone up from Rs 556 crore to Rs 844 crore. The franchisee consideration had also witnessed a marginal incline from Rs 460 crore to Rs 502 crore. Now with Chennai Super Kings (CSK) and Rajasthan Royals (RR) being suspended for a period of two years by the Justice Lodha Committee, the reduction of two teams will result in less number of matches and subsequently generate lesser revenue for the Board as the broadcaster will pay less than the proposed deal.

Apart from BCCI, the official broadcaster of IPL - Multi Screen Media’s (MSM) Sony Max will also face a major blow if the number of matches go down. MSM paid a mammoth $1 billion (Rs 6600 crore) to acquire broadcasting rights for a period of ten years. Lesser number of matches will leave Sony with less opportunities for monetization. The 2015-16 season of IPL was the most successful year for Sony as the broadcasters sealed advertising deals of more than Rs 1000 crore before the first ball was bowled.

A source closely associated with the broadcasting network tells Indiantelevision.com on condition of anonymity, “It’s too early to predict anything and also it’s highly unlikely that BCCI will enter IPL with six franchises. This is a judicial step taken and the entire fraternity will abide by it. The broadcaster will wait and watch what BCCI does and the best part is there is time in hand to ensure smooth proceedings.”

As per TAM Sports analysis, CSK matches in IPL 8 (2015) garnered 4.2 per cent TVR whereas RR matches secured 3.7 per cent TVR. Moreover, as per the analysis, CSK featured six times in the list of top viewed matches of the season, which only goes on to prove the growing popularity of the MS Dhoni led team.

If IPL is played with six teams, the million dollar tourney will have 34 matches in total instead of 60. A cricket expert opines, “Firstly, we have to keep in mind that the two teams are suspended for two years and not for life. Now, in the meantime if BCCI adds two more teams to make it eight again, after two years when the two teams are back, IPL will be a 10 team tourney and that’s when it goes for pitch. So the hypothesis that the IPL will face a blow, is a null hypothesis. And if we think that because of the controversies, Indians will stop watching IPL then we are wrong because if it had to happen it would have happened in 2014 and 2015 because the case we are talking about is of 2013. So I see the IPL only growing bigger.”

On the brand value of IPL, Baseline managing director Tuhin Mishra says, “There might be a bit of a blip, but it’s temporary. The game of cricket and IPL are much bigger than a few individuals. It’s a game that is embraced by Indians and the world over. Controversies and incidents have been a part of sports from time immemorial and this too shall pass.”

Revenue from ticket sales will easily see a 25 per cent decline if there are only six teams feels a senior member of an e-ticketing giant. Every match of IPL witnesses more than Rs 7 crore gross in ticket sales and hence if the number of matches go down, ticketing revenue will also decline, which will in turn result in a substantial loss of e-ticketing venture associated with the league.

Addressing a press conference after the Justice Lodha Committee verdict was delivered, Rajasthan Royals owner Raj Kundra said, “I am shocked and hurt. There are many inaccuracies… have requested for a copy of judgment.”

As per a PTI report, India Cements is set to move to Supreme Court and appeal against the order of the Lodha Committee. However, it must be kept in mind that it was the apex court, which in the first place, appointed the Lodha Committee to investigate the matter and said that its verdict on the case would be “final and binding.” 

Following the pronouncement of the order of the Lodha Committee, BCCI president Jagmohan Dalmiya 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. BCCI is committed to ensuring transparency, accountability and cleansing the sport in order to restore the faith and confidence of millions of cricket loving people in the glorious game of cricket in general and IPL in particular.”

Veteran cricket expert Ayaz Memon tweeted, “Most significant import of Lodha verdict? Busted time-held defence of BCCI that it’s a private society, which can function with its own rules.” Another tweet from him read, “Momentous day not just in Indian but international cricket. Tremor will be felt everywhere....”

The focus now will gradually shift towards the broadcasting rights bid for the IPL in 2017 as there will be a number of broadcasters aggressively vying to get their hands on the Twenty20 cash cow. A senior media planner is of the opinion that things will get interesting with time. “An IPL comprising six teams will enforce 30 per cent loss if compared to the number registered this year. But a 10 team IPL will raise the brand value enormously as the broadcaster will have additional time to monetise.”

Experts also believe that the ball now is in BCCI honorary secretary Anurag Thakur’s court and he will play a pivotal role in the fate of the league. Speaking on the verdict and the way forward Thakur said, “We respect the verdict and would undertake a collective decision in a transparent manner, in the right direction and in the larger interest of the game after the verdict is received and analysed.”

Click to View CSK and RR matches viewership pattern (TAM Sports)

Click to View Overall ratings click (TAM Sports)

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