The complex binary of halving IPL play-off reward and hiking staging fees
Last week, in a rather bizarre leak from the richest cricket board of the world, it was revealed the BCCI governing council decided to cut down the play-off reward for the franchises while increasing the staging fee to 50 lakhs from the previous 30 lakhs. So much for being the richest board?
Let’s understand what it actually is and how that would affect the franchises in the long run. In and around 2014, as ESPN Cricinfo reported, when BCCI introduced league-standing money for the four qualified teams for the play-offs, it was done so keeping in mind the losses the franchises would incur. Remember it was the old media right cycle in place and the telephone number digits were a thing for the future. To tackle that, the BCCI added the fund to its budget, in addition to the prize money that is awarded to the players directly.
It was a pragmatic decision in place for the betterment of the league but now that is being halved to INR 25 crore from the previously-designed amount comes as a real surprise for the franchises. What could be considered as an insult to the injury, the GC also told them that it would be increasing the hosting fee per home match from INR 30 lakhs per match to INR 50 lakhs - a minimum hike of 1.4 crores per season per team. Think from the subjective stand-point and you will realise it is a complex situation for any franchise to be in when your award money is being halved to put you in a spot while the other logistical charges are being hiked by a substantial amount to ensure a perfect recipe for the losses.
The country’s financial slow-down, aided by the problems in Coronavirus pandemic, which saw Asia's richest person and one franchise owner Mukesh Ambani’s status coming down to second richest in Asia within a day, didn’t help the cause either. One might argue all they want to keep the darker side at bay but the BCCI’s reported move was always going to meet with a staple amount of criticism from the men who matter. The letter from the franchises made it worse. As per a Times of India report, Shah Rukh Khan for Kolkata Knight Riders, Akash Ambani for Mumbai Indians, Kasi Viswanathan for Chennai Super Kings, Parth Jindal for Delhi Capitals led the way to oppose such a move, after the fear of losing gate receipts on the face of COVID-19 scare around India at the moment.
Arguing against their logic of asking BCCI to hold it for until the various sponsorship deals, including the current media rights deal, expires in 2022, is not right entirely, but it also reeks of a common judgement that you don’t extend the “added privilege” for that long. The ones sitting in the BCCI board room argue that the league-standing fee was introduced for the teams to have a certain advantage but that can’t continue for long. But then, as the primary stakeholders, wasn’t it fundamental for the board to keep franchisees in the know of the things before a concrete decision was taken?
That is where the exact problem lies from the business stand-point, something that the CEO of a particular franchise brought to the notice, as reported by Cricinfo. I will break that down here further. In September 2017, when BCCI bagged INR 16,347.5 crore for its IPL television and digital rights from Star India for a five-year deal from 2018 to 2022, it effectively emerged as the biggest television deal in cricket.
From the deal itself, franchises stood to earn an approximate amount of INR 150 to 200 crore per season from the revenue pool itself while having their own gate money and sponsorship deals in place. With that amount being a huge one, the BCCI have all the right to feel that halving the league-standing money is the fairest of ideas, but there goes the projectile mark of expenses, that every franchise does it, keeping the long-term association in mind. Will the BCCI manage to nullify the argument?
That said, it is a binary one at that which is never going to see a winner. What the IPL Governing Council and franchises can do, if at all the event goes ahead - you know that alright - they can find a middle-ground. Be it the league-standing fee remaining intact while increasing the staging fees, it will only mean the financial viability would remain as it is. Brijesh Patel has hinted on a similar line but jumping into action will clear the deal. Saturday’s IPL GC meeting will have a long day lined up to solve the issue once and for all.
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