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Franchises share contrasting views as financial constraints force them to rethink

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Mike Hesson raises the paddle in IPL auction

BCCI

Franchises share contrasting views as financial constraints force them to rethink

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SportsCafe Desk

11/16/2020

Even though the BCCI pulled off the incredible and managed a full season of IPL without any visible discomfort, the franchises are now wary of their earning, and thus their spending, for the next season. However, Royals’ Manoj Badale is confident that the teams will see it through in 2021.

The BCCI showed bolster and resilience along with effortless planning in what was one of the most difficult IPLs to organise yet it was not hunky-dory from the outside. The board and franchises have to get hundreds of things right while receiving some of the lowest central revenue pool income caused by VIVO’s sudden exit. The spends have sent a considerable buzz among the teams and with the BCCI planning to add a new team to the roster, Kings XI Punjab, for one, spoke about the challenges and uncertainties ahead.

“There could be a situation, could be, given the current circumstances where there might be better optimization of spend, in case we don’t earn as much as we can or should,” Hindustan Times quoted Ness Wadia as saying.

“It’s a tough economic situation. But we should remember when IPL started in 2008 there was a depression. It was tough economically for many businesses. The whole world went into a meltdown. But IPL happened with fanfare.”

However, Rajasthan Royals co-owner Manoj Badale, who was one of the founding members of the league, has a very concerning yet optimistic viewpoint. Badale is of the opinion that the risk capital that was injected into the business of IPL in 2008 on the back of a global recession was only to ensure the best cricket being provided to cricket fans.

“Sports, because of what happened due to coronavirus, because of the economic pressure that is now being placed on different leagues, is having to look at its funding, how to access risk capital, and is having to see how to make up for lost revenues. There is sometimes lot of focus on how much money IPL franchises are making. It’s worth remembering that few, if any, franchises made any money for the first 10 years of IPL,” Badale said.

“Essentially, you had eight franchises commit the best part of half a billion dollars on the back of a very well-written 25-page IMG prospectus. Nonetheless, it was a lot of money to be invested in 2008 on the back of a financial crisis. That private capital or risk capital that goes into a league is very important. You can get the best players of the world in a domestic tournament if you are willing to pay the best salaries.

“For me, spending money on cricketers is difficult; it is particularly difficult when you are having to compete very hard for the very best players. It’s difficult when you have this complex game theory that goes on combined with an allocation issue on “how do I spend to ensure I’ve got 24 players to cover injuries, to cover key roles”. To spend that money to have balance in your teams but also ensure you have four to five superstars in your team—it’s incredibly difficult.”

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