At some point in 2017, the Indian Premier League’s broadcast rights (from 2018 onwards) will be up for sale. In 2008, Sony had bought these rights for a whopping $1.026 billion for a ten-year cycle (2008-2017).
The new figure is expected to double up, maybe even touch a staggering 3 billion mark, as Star India and Sony-ESPN get ready to throw the kitchen-sink at these rights.
This is the money power of a cricket-crazy, billion-plus Indian population. It is the reason why cricketers want to take a break from their international commitments for two months every year. It is the reason why every IPL franchise gets to pick four overseas players. The IPL is a cash cow and that bird laying golden eggs, all rolled into one. It is the single biggest source of the BCCI’s unending riches, period.
When it comes to revenue distribution pertaining to the IPL, the BCCI follows the Premier League model. The English FA sells television rights of all 20 clubs as a package. Each of the 20 clubs – irrespective of their performances – is assured 50 million pounds (as of 2015-16 season data) accrued from domestic and international TV rights, plus another 4.5 million pounds from central sponsorship pool. The rest of their earnings are dependent on final standings at the end of a particular season.
Thanks to high TRPs the Premier League pulls, a certain number of matches are broadcast live for each club. So, each club also gets a minimum amount of roughly 8 million pounds for 10 matches or less per season. For more than 10 matches beamed on live television, they are paid additional money.
Hence, Manchester United and Arsenal cannot claim more money because their global fan base is substantially larger than the total fan following of Crystal Palace and Watford. This formula is the Premier League’s way of keeping things equitable and the competition fair.
Similarly, 72% of the BCCI’s revenue from IPL per season is distributed equally among the franchises. So, again, Kolkata Knight Riders (a franchise that fills up the vast Eden Gardens with ease) cannot ask for more money against, say, Kings XI Punjab (who have trouble filling up the Mohali stadium.)
Ironically though, when it comes to the distribution of revenue generated by the ICC, the BCCI is against such an equitable structure. Here, the board wants to parade around this massive Indian fan base, TV and sponsorship interest, thumbing its nose in the ICC’s face to get an excessive ‘fair’ share. The result: ICC has called BCCI’s bluff and now the Champions Trophy participation is under threat.
Comparison with global sports model
What is remarkable is the persistence with which the BCCI’s office bearers (current and past) believe that the board merits this money – $570 million for the 2015-2023 cycle as per the “Big Three” ruling. And this belief is deeply rooted in us – one and all, who tune in every time an Indian cricketer pads up to take strike or stands at the top of his mark to deliver an over anywhere in the world. This aforementioned money power – derived from TRP ratings, advertorial, and sponsorship revenue – is but an extension of this conviction.
Technically the BCCI is asserting its rights over cricket’s entire fan-base in the country. In simpler terms, they ‘own’ everything we consume related to Indian cricket, the national team, the IPL and so forth. And now, in their fight with the ICC, they are extending this ‘ownership’ to global events. Simply put, we are the market that drives any ODI World Cup, World T20 or Champions Trophy.
The question here is, is the BCCI is right in this line of thinking? Morally, no. How can a governing body leverage consumption of a particular sport, you would think? Theoretically though, the BCCI is right and there are certain examples to showcase this.
In a parallel universe to the Premier League, the Spanish La Liga operated on an individual club TV-rights’ selling model until as recently as 2015-16. Considering data for that year alone, Real Madrid and Barcelona each sold their individual TV rights for 140 million Euros. 2013-14 champions Atletico Madrid only got 42 million Euros while relegation-threatened Almeria got 18 million Euros. This disparity in TV income explains how Real Madrid and Barcelona are able to afford superstar players.
Then, there is Formula One. As the only team to have raced in every single season of this championship since its inception in 1950, Ferrari get an annual ‘premium’ payment in excess of $90 million just for participation. They also receive Constructors’ Championship winners’ bonuses, as do Mercedes, Red Bull Racing, Williams and Renault.
Unlike these other teams though, it can be argued that Ferrari are vital to F1. Can you imagine a single Grand Prix without those scarlet cars running around? Or, for that matter, a La Liga season without Real Madrid and Barcelona? In both these cases, TV ratings would plummet in a flash and fans worldwide would walk from these competitions without the usual flavours to hold their interest.
Similarly, is it that hard to imagine no one bothering to tune into the Champions Trophy should India follow up the pull out threat? Is it not to say, following these two examples, that the BCCI is well within its rights to exert such influence on cricket’s global matters?
At the same time, you also have to look at the disparity between competing teams in sport. In 2016, the Spanish Government passed a legislation to regulate TV rights’ income and now La Liga follows Premier League’s equitable distribution system. F1’s new owners Liberty Media have already talked up the possibility of stopping that ‘premium’ payment to Ferrari once the current agreement expires in 2020.
ICC’s role in focus
The ICC wants to step in, likewise. This is where Shashank Manohar’s role comes into focus. He has fought off the BCCI by hook/crook methodology. For example, Zimbabwe have been granted additional money to pay off their debts in exchange for their vote, a trick formerly used by the BCCI. Where is the accountability of this money? Or, “any money spent by the ICC to develop cricket in associate nations and other countries”, asked a former Indian cricketer, one of the keenest voices on air. For years, there has been a call to make all financial dealings at the ICC accountable, but nothing has come of it.
For starters, the ICC’s expenditure doesn’t sit well with the BCCI. “Look at the way they spend money,” said a board insider. “Never mind the exorbitant cost of travel and stay for official meetings, just look at the spending for the Champions Trophy or even the 2015 World Cup in Australia-New Zealand. The budget set out for the Champions Trophy is way more than what the BCCI was allotted to spend on the 2016 World T20, which was a grander event in every aspect.”
Here, the ICC needs to understand it cannot use the ‘take it or leave it’ approach with Indian cricket. Sure, you do not want to give an excessive 570-million pay out but 290 million for an eight-year cycle in exchange for what India brings to the cricket table is too less. The ICC itself knows this otherwise the counter-offer of an additional 100 million wouldn’t have come forth.
Meanwhile, the BCCI needs to understand that it has an obligation to help the game, for its own survival, as well as the retention of interest from a billion fans. If Indian cricketers do not feature in international cricket, does the board plan on hosting a yearlong IPL on a weekend basis? How long before we start pining for Test cricket and ICC’s ODI tournaments, the ‘real’ cricket as many deem it?
“Pulling out is a real prospect, but will that decision really stand in front of the COA? They have asked us to name the team. Also, if we pull out now, we pull out of all ICC tournaments, as per rules. What happens to the 2023 World Cup we are supposed to host, and where does that leave bilateral relations?” said one board functionary.
The BCCI is at crossroads in its fight for a ‘fair’ share (not 570 million but 400 million for an eight-year cycle, definitely yes). It feels cornered by the ICC and the COA, considering them foes, even as both are willing to come to the table and play.
The prickly question is – who is going to blink first?