IPL 2021: BCCI and Franchises risk losing Rs 3000 crores due to suspension

IPL is one of the most followed and commercially lucrative sports leagues in the world. However, BCCI’s decision to suspend IPL 2021 is set to result in losses worth Rs 3000 crore in this year’s revenue, reports Business Standard. IPL 2021 was expected to bring in about Rs 4000 crore for the BCCI.

However, the breach in bio bubbles at the end of last week led to numerous cases in different teams. BCCI has been previously adamant about completing the tournament, but the unforeseen circumstances forced them to suspend the tournament. While talking to PTI, BCCI official gave a clear picture of the losses that could happen after this drastic decision.

“We would be losing anything between Rs 2000 to Rs 2500 crore for the midway postponement of this season. I would say something in the range of Rs 2200 crore will be closer to accurate estimation.”

BCCI received payment from broadcasters and sponsors. The income received by the BCCI from the IPL is transferred to the central reserve pool, which is then shared equally among the BCCI and IPL franchises.

However, with 31 matches in the 60-match tournament remaining to be played, BCCI is staring at a loss of more than half of projected revenues. The financial hit worth Rs 2,000 crore to BCCI could also spell bad news for IPL franchises.  The eight franchises were expected to share Rs 2,000 crore in revenues during IPL 2021. With half the tournament in jeopardy, the eight teams would have to forego at least Rs 1,000 crore in earnings from the central reserve pool.

If IPL 2021 is not held any time later this year, a force majeure clause, which frees both parties from liability or obligation when an extraordinary event or circumstance beyond their control occurs and takes precedence will come into effect. This clause implies that broadcasters and sponsors will pay the BCCI only on a pro-rata basis for the number of matches played so far. For the 29 matches hosted so far, Star India is committed to paying the BCCI Rs 54.4 crores per match. BCCI will earn only 50% of total revenue from Star India and sponsors if the remaining games are not completed.

Sponsorship deals for teams are going to be affected due to a sudden pause in IPL 2021. The eight franchises reportedly earn up to Rs 500 crore a year from these sponsorships, which was expected to be around Rs 600 crore this year owing to enhanced digital rights sales. If sponsors were to invoke clauses in their respective agreements, all teams could end up forgoing half that revenue.

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