Boards brace for losses in the time of coronavirus

The uncharacteristic austerity by the world’s richest cricket board follows its decision earlier this month to halve the winner’s purse at this year’s Indian Premier League (IPL), a cash cow with a brand value of $6.8 billion.

The franchise-based Twenty20 league was scheduled to begin on March 29 but has now been postponed until April 15.

To many, a condensed tournament, possibly without foreign players, later this year looks like a more realistic prospect.

A curtailed or cancelled tournament would mean significant losses for the Board of Control for Cricket in India (BCCI), which gets around 400 million rupees ($5.38 million) annually from broadcaster STAR India and its central pool of sponsors.

“The loss at this stage is notional. The biggest loser in any economic dynamics is always its biggest gainer, which is BCCI in this case,” SportzPower co-founder Thomas Abraham, whose company monitors sports business in India, said. “For STAR India, it’s also a loss of opportunity. It was building the India launch of its Disney+ OTT (streaming service) around the IPL.” A truncated tournament would necessitate renegotiation with Disney-owned STAR India, which was not available to share how it plans to dovetail the launch of its new platform with the IPL. Chinese smartphone maker Vivo, which bagged the 2018-22 title rights for 219 million rupees, is unlikely to suffer a big loss. “They would have been preparing for new launches around IPL. They can still do it,” Abraham said.

Vivo did not elaborate if the truncation had disrupted their plans to leverage their tournament rights. “In light of the global health risk ... we at Vivo completely support BCCI’s decision to postpone the series,” Nipun Marya, Director of Vivo India’s Brand Strategy, said in a statement to Reuters. “We shall continuously evaluate the situation as it progresses.” The BCCI and IPL franchises also pay 20% of a player’s annual fee to his home board, which stands to lose that money if it does not allow the cricketer into the IPL due to fears about the coronavirus for example.

A shorter tournament will mean a smaller share from the shrunken central pool of revenues for the eight IPL franchises, not to mention a reduction in gate receipts. Further afield, the Women’s Twenty20 World Cup narrowly escaped the health crisis but the outbreak has cast a shadow over the men’s event in Australia, which begins on Oct. 18. The International Cricket Council (ICC), which runs the tournament, said it was monitoring the situation.