The IPL story – all about hidden figures

(EXCLUSIVE)

By Qaiser Mohammad Ali

New Delhi: Even as the books are being completed for the 2008 Twenty20 Indian Premier League (IPL), its organisers say the maiden edition is set to show an income of Rs.100 crore. This amount has exceeded their expectations and should serve as a morale booster in times of global recession and terror strikes in India that has impacted cricket too.

Board of Control for Cricket in India (BCCI) officials have projected a Rs.51.48 crore surplus from the 2008 IPL, after deducting the expenditure from the income. But when the books close on March 31, this figure will go up considerably.

As per the BCCI records, the total income -- from sources like the sale of media rights, sale of the eight franchisee teams and other sponsorship deals -- was Rs.6,449,400,000 and projected total expenses were Rs.5,934,598,591. On deducting the expenses from income, the board projected a surplus of Rs.514,801,409.

BCCI treasurer M.P. Pandove, however, said that the surplus would be much higher than projected in the 2007-08 annual report. “The IPL books are still being finalised. But the income is going to be over Rs.100 crore,” Pandove told me. He also said that the budget for the 2009 tournament, which is scheduled to begin on April 10, is yet to be finalised. With IPL’s teething problems hopefully over with the first tournament, the second edition is expected to be organised smoothly – and, who knows, the books might show still healthier figures than the 2008 event would rake up.

But even Lalit Modi, the man who conceived the innovative and popular league, and his BCCI colleagues would surely not have anticipated the two events that affected their plans for 2009. They were the Mumbai terrorist attacks, which forced the Twenty20 Champions League to be postponed, and the global financial crisis. The world was already reeling under the recession when the November 26 attacks happened forcing the December 3-10 Champions League, another tournament that he had conceived, to be postponed for 10 months. It will now be held in October.

Even the general election, already slated to be held in April-May, could further derail the IPL 2009. Once the Election Commission announces the dates, IPL might have to adjust its own schedule, which is yet to be announced. Modi, however, says the starting date (April 10) and the final (May 29) are firm, only the match scheduled is to be drawn and it would be done after the Election Commission announces the election dates.

All this means Modi, also a BCCI vice-president and president of the Rajasthan Cricket Association, has his hands full. While still smarting under the postponement of the 2008 Champions League, Modi will now be praying that the recession stabilises and the General Election does not force too many hurdles for the IPL.

Whenever IPL takes place, the slam-bang format seems a guaranteed formula for success, going by the tremendous success it generated last year when the stadiums were packed to the brims for most of the matches. Had it not been so, Modi and his BCCI colleagues would not been so gung-ho about the 2009 tournament.

Last year, the sale of media rights fetched IPL Rs.2,360,000,000 while the total sponsorship money was Rs.1,170,000,000. Besides, franchisee consideration brought in Rs.2,894,400,000 and ‘miscellaneous’ income was Rs.25,000,000. These figures add up to a handsome overall income of Rs. 6,449,400,000.

It’s not just the BCCI that has got rich through IPL; the BCCI-affiliated associations who contest for the national Ranji Trophy championship will be walking happily to the bank. About Rs.203 crore, which is 70 percent of the franchise fees generated by selling the eight teams, will be distributed as subvention to the 27 associations for 2008-09.

With the start of Twenty20 tournament, the BCCI as well as IPL websites were also launched, at long last. Canadaian company Live Current Media Inc. secured the rights for both at a combined cost of $50 million, with the IPL portal alone fetching $20 million.

The main sources of IPL income were MultiScreen Media (new name for Sony television), which gave Rs.2,200,000,000, and the World Sports Group (Rs.160,000,000), as per the BCCI records. While DLF won the rights of the title sponsor with a commitment of Rs.400,000,000 for the first year, the co-sponors are Hero Honda (Rs.180,000,000), Vodafone (Rs.198,000,000), Kingfisher (Rs.212,000,000), Citibank (Rs.120,000,000) and the Web (Rs.60,000,000), as per BCCI documents.

And the main expenditure heads were the production cost, which was about Rs.392,000,000, the umpires’ fees Rs.20,650,000 -- the umpires were appointed by the International Cricket Council – referees’ fees Rs.5,150,000 and match officials’ expense Rs.20,000,000. The ICC also provided the Anti Corruption and Security Unit officials and it cost IPL about Rs.2,280,000 while the expense of conducting dope tests was Rs.1,000,000.

The two main heads under ‘other expenses’ shown in the documents were the franchise payments (Rs.2,246,952,000) and subvention to BCCI-affiliated associations (Rs.2,026,080,000). The other expenditure were on advertisement and promotions (Rs.502,200,000), fees to the International Management Group (Rs.205,013,500), which managed the tournament, tickets purchase (Rs.120,000,000), prize money (Rs.120,000,000), administration (Rs.80,000,000), payment to players (Rs.49,288,571), replay screens (Rs.46,600,000), ‘look and feel’ (Rs.28,000,000) and 3D signs on the grounds (Rs.7,384,520).

The BCCI will also have to pay service tax on the income. It has registered IPL under the category ‘franchisee’ as per the legal opinion it was given, and accordingly the board has remitted Rs.29.09 crore to the service tax department after deducting Rs.6.6 crore as input credit.

The IPL will also have to return to BCCI an amount of Rs.140,604,080, which it had taken as loan, though both are part of the same family. “Initially, the IPL had to take he loan as it had to pay the players,” explained Pandove.

The inflow of huge sums of money is not just making the players rich, but is also keeping IPL governing council members and other officials happy. The officials’ TA/DA is the same as that of the BCCI officials. A BCCI official gets Rs.10,000 for a day’s meeting besides another Rs.10,000 as incidentals per trip and Rs.7,500 as halting allowance. For example, if an official goes out of his city to attend a one day meeting and stays overnight in that city, he makes a cool Rs.27,500. Moreover, the board takes care of his air travel, food and accommodation, usually at a five-star hotel. The BCCI office bearers, the five vice-presidents and all former office bearers are a class apart and that’s why they are eligible for J class airfare.

That the tournament, eventually, turned out to be roaring success would probably justify the pampering of the officials, led by Modi, IPL’s chairman and commissioner. Interestingly, he claims to have registered the name Indian Cricket League (ICL), and not IPL, several years ago. ICL, says Modi, was hijacked by Zee that organises the rebel league under that name. Modi often threatens to move the court to reclaim the original name, but when you have a tournament that is as successful as IPL who cares about the name.

The TRP ratings went sky high during Saturdays and Sundays when matches were played between April 18 and June 1. According to TAM Media Research, around 13 matches scored 6+ to 7+ rating points and the rest logged above 4 and 5. Audience Measurement and Analysis (aMAP) threw a record high viewership rating (7.7) for the final match between Rajasthan Royals and Chenni Super Kings. The peak rating was 10.2 and aMAP suggested that a total of 2.4 crore people watched Shane Warne’s Rajasthan Royal win the title in Mumbai. Even the two semi-finals were well watched as they had over 4 TRPs, as per aMAP.

Modi had started working on the concept of an inter-city tournament as long back as 1994. But at the time it was probably not the Twenty20 version. But it was probably only after Twenty20 format helped bring the crowds roaring back to the grounds in county cricket and gave a big relief to the English administrators did Modi change his plans. He approached the IMG and the two designed and launched the IPL on the lines of the National Basketball Association and the National Football League and the English Premier League.