New Delhi: The Board of Control for Cricket in India (BCCI) will earn a record Rs2,000 crore revenue in the next 12-14 months, thanks to an unusually busy calendar, thus reversing two years of revenue declines.
“In 2010-11, the board’s income will skyrocket with revenues generated from broadcast, sponsorship and the board fees for the Indian Premier League (IPL) Season 3 that returns to home turf,” said a BCCI official, who did not want to be identified.
Additional income is expected from the International Cricket Council’s (ICC) World Cup to be held in March 2011.
The board’s 2009-10 revenue is expected to be similar to that of the previous year, when, for the first time in five years, income declined to Rs725.8 crore from Rs1,000 crore. The board’s annual report for 2009-10 will be released later this year.
Graphic: Ahmed Raza Khan / Mint
“BCCI’s income dropped in 2008 due to security reasons that forced several big tournaments such as the Champions League, Pakistan’s tour of India as well as England’s two ODIs (one day internationals) to be either cancelled or postponed causing a significant loss of over Rs300 crore to BCCI,” the official said. “The board’s income for 2009 will be no different from that of 2008 because IPL was shifted to South Africa.”
Last year’s Twenty20 tournament was played overseas because it clashed with general election being held in India at the time.
“In 2009, the board made Rs800 crore from IPL, but we still ran into losses of around Rs45 crore because it was more expensive to host the tournament in South Africa,” said Niranjan Shah, vice-chairman for IPL.
According to him, IPL3 is set to make in excess of Rs800 crore this year.
Breaking down the math, Shah said Rs200 crore will be generated from franchisee rights—the bid amount paid over 10 years; Rs210 crore from franchisee fees—annual fees that franchises shell out to BCCI for use of facilities, etc., and are shared with the individual cricket state associations; and Rs400 crore from central media sponsorship rights from title and ground sponsors as well as telecast rights. This is part of the Rs8,200 crore deal won by broadcaster Multi Screen Media Pvt. Ltd and World Sport Group Pte Ltd (WSG), a sports marketing company, to air matches till 2017.
“IPL will also be adding two more teams, which will double the revenues for IPL, but it is too early to tell what the amount coming in for the new teams will be,” said Shah.
BCCI will fill its coffers further with ICC’s proposal for $110 million (Rs506 crore) as board fees for hosting 29 matches in the country, confirmed a senior ICC official on condition of anonymity. “There will be a meeting held at the end of January to finalize the proposed amount of $110 million as board fees to be paid to BCCI to host the World Cup matches in India,” he said.
According to him, BCCI will also be profiting from ticket sales, which could add up to around Rs60 crore, depending on India’s performance.
Apart from IPL and the World Cup, BCCI will also be raking in money from bilateral tournaments such as the Australia tour of India in October followed by the New Zealand cricket team playing here in December.
For these tournaments, other than board fees and the sponsorship share for which the amount has not yet been decided, telecast rights alone will fetch BCCI Rs450 crore for 15 matches, with broadcaster Nimbus Communications Ltd paying the board Rs33 crore per match for all domestic tournaments.
In addition, BCCI will also get Rs50 crore from the Champions League, a world championship for domestic Twenty20 club champions that kicked off last year, under a sharing ratio agreed by the organizing cricket bodies of India, Australia and South Africa. It will get approximately Rs60 crore as participation fees for the Twenty20 World Cup scheduled to be held in the West Indies in April-May and the Asia Cup for which the schedule is yet to be finalized.
Sponsorship revenue, a combination of domestic and international sponsorship rights held by Sahara India Pariwar, Nike India Pvt. Ltd and WSG, is projected to go up to Rs125 crore in 2009-10 from Rs111 crore in 2008-09, said the Indian cricket board official cited earlier.
While no projections were given for the coming year, the official said this figure is likely to remain the same, especially since BCCI has found no takers for the asking price of Rs3 crore per game, after Sahara’s four-year contract (Rs1.5 crore per match) ended December, forcing its extension by another six months.
Revenue run-up: Niranjan Shah says IPL3 may net over Rs800 crore. Vipin Kumar/HT
According to media-buying agency GroupM India Pvt. Ltd, part of the WPP Group, cricket accounted for Rs1,200 crore of the total Rs8,000 crore advertising revenue on television in 2009, and is expected to increase by at least 15% this year “due to the fact that IPL 3 will be held in India as well as other cricket tournaments such as the T20 World Cup”, said Hiren Pandit, managing partner of GroupM ESP, the entertainment, sports and cause partnerships division of GroupM.
While revenue is set to more than double, the board’s profits are unlikely to swell by as much since it will incur significant expenditure too.
“Hosting tournaments, especially as large as IPL and the World Cup, is no easy task and is more of a privilege,” pointed out M.K. Machiah, general manager, WSG. “So while there will be a lot of money coming into BCCI’s pocket, there is a lot of money to shell out for things like travel, accommodation, infrastructure, etc.”
According to the BCCI official, the Indian board has already pledged Rs50 crore as infrastructure subsidy for each state association that hosts the World Cup matches.
With eight states stepping up to volunteer as host destinations, BCCI will be left with around Rs50 crore to fund all other expenses such as fees to players, daily allowance, travel, lodging, expenses of support staff, match officials and selectors, besides sundry other charges.
IPL’s Shah also sought to downplay the amount of money that the administrator of the game in the country would make.
“The income for BCCI is just a book entry as the expenses are enormous,” he said. “We don’t take home so much.”
Shah also points to levies that will need to be paid after the board was pulled up last week for avoiding taxes by calling itself a charitable organization.
“There will be more taxes to pay. The I-T (income-tax) department has managed to draw up a certain ratio that needs to be paid,” the board official said. “BCCI is in the process of responding to them.”