IPL 2020: What happens to teams' finance if IPL played to empty gallery, postponed or cancelled

IPL 2020: What happens to teams finance of the tournament gets cancelled, postponed or played behind closed doors — IPL 2020: What happens to teams' finance of the tournament gets cancelled, postponed or played behind closed doors

Bengaluru, March 13: The IPL 2020 faces massive uncertainty after the coronavirus outbreak has put forth several barricades in front of the conduct of the tournament. There is an IPL Governing Council meeting on Saturday (March 14) to decide the course of action to be adopted, but signs are quite evident that the BCCI mandarins have a narrow path to tread.

World over, several sporting events have either been cancelled or postponed or being played behind closed doors and the BCCI may have to choose from one of these options. The Sourav Ganguly-led administrative team will also have to consider the Central Government guidelines which put emphasis on avoiding large gathering, and the IPL is certainly a place where large number of spectators concentrate at one venue.

But choosing any one of the aforementioned options can bring heavy financial burden on the Board as well as on the teams, who are hoping to recover a large chunk of money that they had spent ahead of the tournament from this IPL.

MyKhel explores the potential financial implosion.

1. If the IPL 2020 played behind the closed doors

As things stand now, playing to empty galleries is the likeliest option the BCCI will adopt. It will result in a colourless IPL but there have been warning for the body from all quarters and they have already announced that the Lucknow and Kolkata ODIs between India and South Africa will be a spectator-free spectacle. But it will be a blow for the teams. Several teams have already spent nearly Rs 500 crore to acquire players and putting in place other facilities ahead of the IPL and not having ticketing revenue will rob them off nearly Rs 200-Rs 300 crore. What the teams will be left with are central broadcast revenue and income from the sponsors. The teams will certainly not be able to recover the cost this year.

"The ticketing revenue amounts to nearly Rs 300 crore per season and additionally another Rs 40-50 crore is expected to be accrued from the fan parks. Without fans in the stadium, this chunk of revenue will not be possible," a team official told MyKhel.

2. If the IPL 2020 is rescheduled/cancelled

This is a grimmer scenario. Apart from the teams even the host broadcaster Star Sports will be hit quite deep. An official associated with SPN said the channel has the potential to touch upwards of Rs 3000 crore from ad sales during IPL 2020. A cancellation will result in a complete wipe out. The IPL will be played to a tight window if it is rescheduled and the advertisement rates will have to recalculated for a possible shorter duration and the revenue too may see a downfall.

"Cancellation or rescheduling (of IPL 2020) could bring heavier impact on all stakeholders. A lot of brands bank on IPL season for new launches, sell existing products through attractive offers and air promos for their upcoming products. In that sense, they will work closely with the BCCI and other government agencies to explore the option of a TV-only IPL which in fact may not hurt them that deep," said a marketing expert.

He said nearly 200-220 brands actively invest in IPL and 80 per cent of slots have been sold ahead of IPL 2020.

3. The viewership of IPL

The data from IPL 2019 shows that Star Sports Networks attracted 460 million viewers while a further 300 million saw the tournament via Live Streaming through HotStar. There have been reports that the SPN has been planning to air few matches through their associate channels like Star Gold and Star Plus, widening the base and thereby increasing the viewership. So, it could be possible that the broadcasting team will be pushing for even a behind the closed doors affair but as scheduled.

It is imperative for Star because they have paid a whopping Rs 16000 crore for five years for media rights to the BCCI and they will require uninterrupted proceedings to recover the amount, 20-30 per cent each year.

4. The IPL numbers

IPL has shown a growth trend since its inception in 2008 and the current market value of IPL is close to Rs 6.5 billion, one of the highest valued sporting properties in the world at present. The four-time and defending champions Mumbai Indians and three-time title holders Chennai Super Kings are topping the value chart for the teams. A cancellation of IPL 2020 might affect those numbers drastically while playing behind closed doors/rescheduling too might bring that numbers down slightly.