The Board of Control for Cricket in India (BCCI), the country’s apex cricketing body, is expected to get richer by Rs 5,000-7,000 crore after the two new franchises of the lucrative Indian Premier League (IPL) go under the hammer on Monday in Dubai.
According to reports, the Indian cricket board is not only expected to earn an additional amount of Rs 5,000-7,000 crore by the sale of the two new franchises but will also receive an additional amount of over Rs 450 crore from its share of broadcasting and sponsorship revenues in 2022 as the number of matches in the cash-rich league will rise to 74 next year from the present 60 matches.
The rise in number of matches will be because the number of teams will also go upto to 10 from the current eight.
And as the number of games will rise, Disney+Hotstar will have to pay Rs 54.5 core per match for the live streaming of the matches.
However, the major earning for both the BCCI as well as the new and old franchises will be witnessed from 2023 when the IPL’s television and digital rights will be up for grabs again for a period of another five years.
Earlier, Star had acquired the league’s television and digital rights for the period between 2018-2022 at a sum of Rs 16,348 crore and as per the deal, the broadcaster was supposed to pay around Rs 54.5 crore per game in the 60-match season.
With the current cycle about to get over, the auctions for the next cycle is expected soon and is most likley to witness participation from top companies globally as with more teams and more matches, the earning will also shoot up.
According to industry experts, the winning bid price is expected to double from Rs 16,348 crore to Rs 32,694 crore for the next cycle. And if it happens, the revenue share only from the broadcasting and digital rights for each of the 10 franchisees will see a massive jump to Rs 326.9 crore from the present Rs 201.6 crore, a rise of around 60 percent each year.
Meanwhile, several broadcasters have already joined the race for the media auction as apart from Disney+Hotstar, the current media rights holder, Sony, Reliance Industries, Amazon Prime and some other global players are looking to join the IPL bandwagon.
Reports also suggest that Reliance Industries is planning to announce a sports channel soon in Viacom 18 keeping in mind of the IPL.
Notably, the central revenues of the Indian cricket board, which includes the broadcasting and digital rights as well as sponsorships, is shared between the BCCI and the franchises. While half of the amount goes to the BCCI, the remaining amount is shared equally between the franchisees.
Moreover, the companies which emerge out as successful bidders of the two new franchises will not have to pay the entire bid amount at a time. The winning bidders will hand only 20 per cent of their revenue (which, apart from a share of central revenues, also includes income from team sponsorship like branding on the team jersey, selling team branded products and so on) to the board each year. They will have to pay it until the total amount is completed.
Earlier, the BCCI had kept Rs 2,000 crore as the base price for each franchise and had asked that any company or individual bidding for it will be required to have a minimum net worth of Rs 3,000 crore.
So far, the Adanis, the Glazer family, which owns the famous soccer club Manchester United, Torrent and Aurobindo Pharma, RP-Sanjiv Goenka group, Hindustan Times Media, Jindal Steel and Ronnie Screwvala of Unilazer Ventures have buyed the Invitation to Tender (ITT) documents from the BCCI.
On October 20, the deadline for the sale of ITT, the Rs 10 lakh document, ended and as per reports, as many as 20 parties have bought the ITT document.
However, those in the know say that the financial benefit for franchisees in 2022 is limited as they have to share the central revenues, now it would be divided amongst 10 instead of eight teams.
Significantly, six Indian cities, namely – Ahmedabad (Narendra Modi Stadium), Cuttack (Barabati Stadium), Dharamsala (Himachal Pradesh Cricket Association Stadium), Guwahati (Barsapara Cricket Ground), Indore (Holkar Stadium), Lucknow (Atal Bihari Vajpayee Ekana Cricket Stadium) have been shortlisted for the auction.
As per reports, Ahmedabad and Lucknow are the frontrunners for hosting the two new IPL teams.