Canceling IPL 2020 is not as easy as it sounds. Megabucks involved shows it’s more than just a league.
The Covid-19 outbreak has all but made the sporting world irrelevant, at least for the time being. Major event cancelations due to coronavirus outbreak have hung a dark cloud over the fate of many a sporting organization. While Wimbledon was insured for a pandemic, some like the Tokyo Olympics have decided to postpone 2021. Some others that follow an annual calendar have their futures stuck in limbo. One such 2020 major facing unthinkable monetary loss is modern cricket’s biggest theatre, the Indian Premier League.
IPL-2020 was one of the bigger sporting majors to fall prey to COVID-19. Sports analysts reckon that a complete wipeout of the 2020 IPL will result in BCCI incurring a massive financial setback of approx $499 million. Now that’s an insane amount of money for a month-long league involving just eight teams.
Anatomy of the IPL financial setback
BCCI has deeper pockets as compared to other international boards. But the cancellation of IPL will be a massive blow even for the richest board in the world. BCCI loses $53 million for this year from a roughly $262 million, 5-year deal with title sponsor VIVO mobile phones. The financial setback from the IPL broadcasting partner Star Sports is not yet disclosed.
It raises the question – is IPL not insured?
Of course, it is. However, the catch is that insurance covers happenings that depend on the event taking place – kidnapping and ransom, medical covers and accidents, and other business interruptions. But not an of god, like the coronavirus pandemic. A fatal insurance error will cost the BCCI and IPL franchises upwards of $650 million.
Dissecting the loss piece by piece
How do you expect a sports organization to predict a pandemic outbreak for which the developed countries were taken off guard? Except for Wimbledon, which was more prepared than any other organization in the world.
Coming back to the point and talking about the teams, Owners will lose a big chunk of profit from sponsors. Companies shell out $2-2.5 million to put their logo on the front of the jersey, back of the jersey cost around $1 million, and logos on sleeves amount to $400-500 thousand.
Money through ticket sales is another part of revenue and combining it for all the franchise, the sum is close $60-70 million. State associations receive approximately $900 thousand for conducting each match. This sum comes up to $7.2 million for each stadium association.
Plenty of unpaid cricketers this summer
Many first-time players will not only miss their debuts or a chance for a comeback due to the Indian Premier League 2020 cancellation but will also be a huge monetary loss for them. IPL franchises are only bound to pay if IPL is played. In the case of no matches, no money is paid. However, the amount spent by the franchise in the auction is still intact because there won’t be an auction next year. It is expected each franchise will continue with the same set of players.
IPL is a huge cash cow and reaps immense profit. According to reports, IPL 2015 contributed $11.5 billion to the Indian GDP. In 2014, IPL was shifted to UAE due to general elections in India. That 20-days of cricket contributed 275 million Dirhams to the UAE’s economy.