IPL 2020 postponed amid Covid-19 scare: Who loses how much because of delay

The Board of Control for Cricket in India (BCCI) on Thursday decided to “suspend” the Indian Premier League (IPL) by a fortnight till April 15 on account of the spread of coronavirus in the country.

After April 15, according to sources in the cricket body, it will take a call on the matter.

Sources said the reversal of position by the cricket body, whose president, Sourav Ganguly, said a few days ago the tournament would be held on schedule, was just to bide time because more than Rs 8,000 crore was at stake this year. Cancelling the tournament would have had a serious impact on stakeholders, they added.

Stakeholders include, apart from the BCCI, the advertisers, eight franchisees, US media giant Disney, which has the broadcasting and digital rights for the IPL matches, and more than 200 players.

The bulk of the BCCI’s revenues comes from this tournament. The tournament was expected to start on March 29. 
 

But according to sources, with limited wiggle room for the BCCI to extend the tournament due to a tight global cricket schedule, IPL matches will have to become double-headers instead of one match played every day (expect during weekends). However, this could impact viewership because some of the matches will have to be played in the afternoon, not to peak time. Last year around 500 million viewers watched the show. 

Sources also said the matches would have to be held without spectators. Already the remaining two one-day matches between India and South Africa, which are in India on tour, have been cancelled.  

It is expected that foreign players, many of whom are reluctant to come to India, could find it difficult to get the visa after the government decided to keep out people from abroad till April 15.

In a media advisory after the meeting of the BCCI with the top management of the IPL in Mumbai on Thursday, the cricket body said: “The BCCI has decided to suspend IPL 2020 till 15th April 2020 as a precautionary measure.” 

 

 

It also pointed out that the BCCI was concerned about public health and alive to the interests of the stakeholders, and it would take steps to ensure that all related to the IPL “including fans have a safe cricketing experience”. 

The IPL brass is expected to give more detail to the franchisees on Saturday.

The move of the BCCI has come just after Delhi Deputy Chief Minister Manish Sisodia announced on Thursday that his government would not allow any sporting events, including IPL matches, to be held in stadia. This takes out seven games scheduled to be held in the city. 

Maharashtra Health Minister Rajesh Tope had made it clear that it would permit closed-door matches. The Karnataka government has banned all sports events.

If there is cancellation, the entity that would lose the most is the BCCI, which is expected to make more than Rs 4,200 crore from broadcasting and digital rights, sponsors like Vivo, and 20 per cent of the franchisee revenues.

However, if the matches are held in spectator-less stadia, the revenue loss for both the franchisees and the BCCI (as revenues will go down) would be limited. They make around Rs 10 crore each from ticket sales.

The other big stakeholder is Disney, which has paid Rs 3,270 crore for the digital and broadcasting rights. If the matches are cancelled, it would lose over Rs 3,000 crore it is expecting to earn from sponsors and advertisers, with many deals tied up. The BCCI will have to renegotiate its five-year contract for the rights and extend it.

However, in case the matches are held closed doors it could be a beneficiary because 1 per cent of the fans who see the matches in stadia will move to TV or Hotstar. It is expected that 600 million people will watch TV and OTT this year.

The eight franchisees together could, however, lose ticket income of Rs 80-100 crore. And they could also see some sponsor advertisers walking out in the absence of the opportunity of brand building associated with fans coming to the stadium. Also revenues from licensing and merchandising could be affected. For some franchisees like KKR they could be as much as their 40 per cent share of the central revenues of the BCCI. 

Franchisees can make Rs 30-100 crore from team sponsors. 

But for the players up to Rs 700 crore of fees is at stake. As an IPL franchisee points out, on average franchisees spend about 75 per cent of their team auction purse in getting 25 per cent of the star players. But even for the 150 others, who make an average Rs 1 crore, it is big money.