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Photo: Mint
Photo: Mint

Opinion | IPL pause pushes Star India, BCCI into a corner

Star may still have to pay BCCI for this year’s IPL even if it doesn’t take place

The tidings don’t look happy for Star India, now owned by the Walt Disney Company, with a question mark hanging over its prestigious property, Indian Premier League, the T20 cricket tournament that was to begin on 29 March. The 13th edition of the league, organized by the Board of Control for Cricket in India (BCCI), has been deferred till 15 April because of the spread of Covid-19 in the country. Star is the official broadcast partner for IPL. The tournament, which includes several foreign cricketers in the eight franchise teams, will not be possible with the central government suspending all visas to India till 15 April to contain the pandemic. The IPL franchisees were disappointed by the decision, but they agreed that the safety of spectators and players was paramount. On 14 March, after an IPL governing council meet, BCCI president Sourav Ganguly suggested that IPL could see a truncated version of the game.

The worried franchisees felt that a full IPL could be played in fewer days against the earlier 50-day window that had been scheduled. With multiple double headers, a full IPL would need 37 days, according to some calculations.

For now, depending on the containment of Covid-19, a truncated IPL looks more plausible, if at all. For starters, the government has to allow timely visas to all players, as well as crew and production staff. Second, schedules of international players will have to be clear for them to come to India in case the matches exceed the earlier schedule ending 24 May. The games can be played with teams comprising only Indian players, but the league would lose its charm. It is the cricketing stars from Australia, England, and South Africa that not only grab eyeballs, but also raise the bar. “They bring a skill set that their fans await," said a person familiar with the developments around IPL.

There are others imponderables, too. Indian weather will turn unfavourable with intense heat in some parts of the country and monsoon in others making the games iffy.

Any curtailment would also affect BCCI and Star India. For BCCI, a significant portion of the revenue comes from the broadcast rights that it sold to Star India, as well as from the sponsors of the tournament. Vivo continues to be the title sponsor of the league, which ensures that BCCI gets more than 400 crore a year till 2022. Star also managed to rope in nine television sponsors, including Coca Cola, Dream11, and Amazon.

However, it remains to be seen how many of the sponsors and spot advertisers stay committed to media spends amid fears of an economic slump in a post-Covid-19 world. Some reports had suggested that Star would earn 3,000 crore in advertising from the tournament. Mint had earlier reported that the business of IPL is at risk of taking a financial hit of around 10,000 crore. This includes gate receipts, sponsorship, franchise revenue, and players fees, as well as hospitality and travel-related costs.

Unfortunately, Star may still have to pay BCCI for this year’s IPL even if it doesn’t take place. It seems that the contract between BCCI and Star doesn’t cover an eventuality such as the pandemic. However, Star is hopeful of getting concessions from the cricketing body. Star India bought the consolidated media rights to IPL for 16,347.50 crore for five years.

In case of a truncated IPL and, hence, poor recovery on spends, Star may also decide to hold back its more than 100 crore investment in additional programming and shows around the league for which it hires both top national and international talent.

Tuhin Mishra, managing director and co-founder, Baseline Ventures, a sports marketing firm, said: “The current situation looks very disturbing. With the news of so many sporting events getting cancelled, postponed, players getting affected or quarantined globally, it’s not going to be easy over the next few weeks, not only for sports, but any business." Mishra said there could be serious repercussions for upcoming big-ticket events such as the IPL and Tokyo Olympics. “These won’t be limited to just players, but will also affect sponsors, broadcasters and professionals, who make a living out of these events. The entire sports ecosystem gets affected and, with timelines getting pushed, it will even have an impact on the feasibility of doing a particular event as a suitable window will again have to be created to suit all stakeholders. The big hope is for the onset of summers and a downward trend in the spread of the virus," Mishra said.

Shuchi Bansal is Mint’s media, marketing and advertising editor. Ordinary Post will look at pressing issues related to all three. Or just fun stuff

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