Cancellation of IPL could cost BCCI ₹3,869.5 crore

The Indian Premier League that was supposed to begin on March 29 has been postponed till April 15 due to the outbreak of COVID-19. With the number of COVID-19 cases on the rise, there is also likelihood of the event being cancelled altogether.

If the IPL was to be altogether cancelled, it could cost the BCCI ₹3,869.5 crore, which would include ₹3,269.5 crore of broadcast and streaming revenue and ₹200 crore and ₹400 crore of central sponsorship and title sponsorship revenues respectively, as per a report published on BusinessToday.in.

Star India had bagged IPL's media rights for ₹16,347.5 crore for five years, while Vivo had bagged the title sponsorship for ₹2,000 crore for five years.

As per Harish Thawani, chairman of the erstwhile Nimbus Communication (the company which owned Neo Sports) the risk shifts to the broadcaster from the first ball bowled. "If the IPL isn't staged at all, and BCCI is not insured, then it could be an issue," he further explains. However, most teams including the BCCI are expected to be covered by insurance for these kind of eventualities.

In fact, Star India is known to have sold over 75% of its IPL inventory almost two months prior to the commencement of the tournament. The broadcaster is eyeing a revenue of ₹3,300 crore of broadcast and digital ad revenue this year. If the tournament gets cancelled, it would mean huge losses for the broadcaster too, reports BusinessToday.in.

If the virus doesn't subside by April 15, there are even talks of holding the IPL matches without spectators. This would mean that the broadcast and streaming revenue of both BCCI and franchisees would remain intact. Star would also be able to keep up to its ₹3,300 crore ad revenue target.

What would get impacted is the gate revenue and the food and beverage revenue of the franchisees. While 85% of a franchisee's revenue comes from broadcast and streaming rights, it on an average makes ₹4 crore per match from ticket sales, while sale of food and beverage constitutes another ₹50 lakh-Rs 1 crore per match. "The net loss could be in the region of ₹2.5 crore per match, but I am sure all of them are insured," Thawani was quoted as saying.