BCCI grabs bigger IPL-7 TV rights pie

In what could add to the woes of Indian Premier League (IPL) franchises, the Board of Control for Cricket in India (BCCI) has decided to cut TV rights payouts to team owners 20 percentage points — from 80 per cent to 60 per cent — for this edition of the tournament, say officials close to the development.

This is despite the cricketing board securing a higher amount from MSM (Multi Screen Media Pvt Ltd) for this year’s broadcasting rights this year.

A member of the IPL governing council confirmed the cut in payouts to franchises this year. “These contracts were signed before the fate of IPL phase-I was decided. So, franchises will get what is stated in the contract,” he said.

For this year’s IPL edition, the seventh, MSM’s payout for broadcasting rights to BCCI stands at Rs 10-11 crore a match, about Rs 4 crore higher than in previous ones.

BCCI Secretary Sanjay Patel, in Dubai, declined to comment on the matter.

A substantial part of IPL teams’ revenue is accounted for by the BCCI’s central sponsorship, which comprises digital and broadcast rights. Revenues from stadium ticket sales and on-the-spot advertising also contribute to the revenue of IPL franchises.

According to an official privy to the development, as IPL phase-I will be held in the United Arab Emirates and teams will incur extra costs, BCCI will provide subsidies, considering the overall losses team owners might record at the end of the T20 tournament.

IPL franchises have had concern on revenue this year, as this will be impacted in the initial phase and a cut in broadcast rights payouts will only add to the pressure.

So far, the BCCI has informed franchisees about the subsidies it will provide and the logistical costs it will bear. Arrangements for players, staff, etc, are part of the subsidies. This is expected to provide some relief to team owners, especially as the first phase of the tournament will be held in Dubai, Sharjah and Abu Dhabi.

However, the managing director and chief executive of an IPL franchise said so far, there was little clarity from the board on that front.

Teams have been allowed to set their own rates for stadium tickets; some team owners may choose to raise prices to compensate for the loss in revenue. Usually, stadium ticket sales contribute to about 40 per cent of a franchisee’s game-day revenue.
TIGHT MATCH

• BCCI to cut TV rights payout for team owners by 20 percentage points to 60 per cent
• The move comes from BCCI despite a rise in annual payout from MSM
• For the 2014 edition, BCCI is learnt to have got about Rs 10-11 crore a match as broadcasting rights
• IPL governing council member claims the agreement was signed before phase-I was moved to UAE
• The move by BCCI would put additional pressure on franchises who are already under pressure
• According to MD & CEO of a franchise, little clarity has been provided by BCCI on ‘subsidy’