The Indian cricket board is likely to lose Rs 2,000 crore due to the recent termination of the Kochi Tuskers Kerala franchise from the Indian Premier League (IPL) T20 championship following a payment default.
The Kochi team, which was bought for Rs 1,550 crore in 2010 by a consortium of investors, was supposed to make the payment over a 10-year period. “With Kochi now being terminated and IPL 5 being a nine-team affair, the board could estimate further losses in terms of media rights, revenues from number of matches and stadia. The estimated loss is Rs 2,000 crore,” said a senior official in the Board of Control for Cricket in India (BCCI).
Last month, the BCCI terminated the contract of Kochi, after it defaulted on a Rs 156-crore annual payment. Under the terms of the agreement, each franchise has to submit a bank guarantee every year that covers the fee payable to BCCI. The consortium had to pay a bank guarantee of Rs 156 crore every year for the next 10 years. The investors include Film Waves holding a 13.97 per cent stake, Anchor 31.45 per cent, Parinee 30.27 per cent, Rendezvous 10 per cent, Anand Shyam 9.31 per cent and Vivek Venugopal five per cent.
BCCI said the irremediable breach committed by the Kochi franchise had prompted the board to decide on encashing the bank guarantee in its possession and terminate the franchise.
Since its inception early last year, Kochi Tuskers hit the headlines following a spat between the then IPL boss Lalit Modi and Shashi Tharoor, who was a Union minister. It eventually led to the exit of both from their posts and a complete revamp of the T20 tournament.
The franchise was again in eye of a storm due to a lack of clarity in the team’s ownership pattern, a series of spats between its owners on shifting its base to Ahmedabad and also tussles within the Kerala Cricket board.
