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The IPL’s sternest test

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IPL_Indian_Premier_League_cricketFollowing the order passed by Justice Lodha’s Committee on Tuesday (14th July), uncertainty has swirled around the future of not only the Chennai Super Kings and Rajasthan Royals, but the Indian Premier League itself. The IPL of course is no stranger to controversy or drama, but this current mess is by far the most serious the league has faced in its eight and a half year history.

The principle concern facing the BCCI, in responding to the suspension of CSK and RR, will be finding a balance between appeasing the Supreme Court of India, now inclined to involve itself in BCCI affairs, and protecting the cricketing and commercial interests of the IPL itself.

The Supreme Court will cast a long shadow over the BCCI’s response to Justice Lodha’s ruling, and what the Court will and won’t allow is going to form the foundation of what options the BCCI explores from here.

 

But beyond the legalities and illegalities it is already becoming clear that the BCCI’s priority will be to ensure an eight-team IPL next season, with or without CSK and RR. “The idea is to have the tournament in full format with a minimum of eight teams,” said IPL Chairman Rajiv Shukla on Thursday (16th July). “We can’t hold the event with six teams.”

An eight team IPL is seen as central to the BCCI fulfilling its broadcasting deal with Multi-Screen Media, which guarantees MSM a minimum of 60 matches per-season, and although that number could be met with six teams it would require some teams to play each other more than two times-per-season, risking viewer fatigue. A renegotiated broadcast deal with lower fees and fewer matches could still see MSM lose an estimated Rs. 180-200 crore [approx $30-33 million] in advertising revenue alone. As well as the broadcasting deal, sponsorship deals too will likely have been signed on the precondition of eight competing teams and a desire to meet these agreements will drive the BCCI’s response.  

The first thing the BCCI needs to establish, therefore, around which there is currently much ambiguity, is whether CSK and RR can compete in next season’s IPL under different ownership. The details of the order surrounding this issue are unclear but expert sports lawyers who have spoken to ESPNcricinfo this week believe the suspension extends to the teams themselves.

If it is only the owners and not the teams that are suspended, the BCCI could terminate the contracts of India Cements Ltd and Jaipur IPL Cricket Limited with the Chennai and Jaipur franchises and put the two teams back on the market. The termination is a contractual right that can only be exercised by the two contractual parties, but could be clearly justified according to the breach of Clause 11.3 (c) of the franchisee agreement.

While this would be the decision most respected by the Supreme Court of India, showing a zero tolerance attitude to corruption, it could be a decision that may spell an end to the existing brands ‘Chennai Super Kings’ and ‘Rajasthan Royals’, whose names are the Intellectual Property Rights of India Cements Ltd and Jaipur IPL Cricket Limited, and could be difficult to untangle from them. Given the value of the ‘Super Kings’ and ‘Royals’ the BCCI will surely be reluctant to make any decisions that could render them unusable.

If indeed the franchise agreements are terminated, given the short time remaining on the existing tenders, it could be difficult for the BCCI to find new owners. Although, termination may endear potential investors otherwise unnerved by the league’s sordid image to perhaps reconsider. However, India Cements Ltd and Jaipur IPL Cricket Limited could challenge the termination in court and, even if they do not win, the issue could delay progress elsewhere. Another option that the BCCI could explore is discussing with the current owners whether they would be interested in selling the franchises and with them the naming rights.   

There have been whispers that the BCCI themselves may look to run Team Chennai and Team Jaipur for two seasons until the existing owners return, but given the BCCI’s current standing with the Supreme Court this is unlikely to be permitted, given the conflict of interest it would produce. Indeed, the BCCI may feel with Lodha’s Committee still to table its recommendations on restructuring the BCCI that appeasement with the Court, rather than conflict, is the wiser path to take.

The difficulties surrounding CSK and RR mean that it seems that the most trouble-free way the BCCI can ensure the next IPL is an eight team affair is by putting two new teams on the market.

According to industry experts and IPL insiders, it is highly unlikely that these two new franchises would attract any investor interest if they were only stop-gaps for two years until CSK and RR return because it will take longer than the tender period for the franchises to break even. Thus, any decision to sell two new teams would be to invite tenders for those teams for a longer period and therefore would also be a decision to expand the IPL to ten teams from 2018 if CSK and RR return.

Expansion of the IPL has of course been tried before, and it failed. But the circumstances are ironically more favourable now. As opposed to selling the two new teams in a highly inflated market, as was the case in 2010 when Pune Warriors India were sold for $370 million and Kochi Tuskers Kerala for $333.3 million, the teams will be sold, given the climate surrounding the IPL, in what is likely to be a highly deflated market. A former executive of an IPL franchise, speaking to ESPNcricinfo on Friday (17th July) suggested that a base price of more than Rs. 500 crore [$83 million] would be unlikely to attract much interest from investors.  

While this perceived loss of revenue in selling at an unfavourable time may pain some BCCI officials, it augurs a more successful long-term attempt at expansion; not to mention that failing to meet agreements to an eight-team IPL would surely be far more problematic than selling an under-priced franchise. Furthermore, in inducting new teams during the temporary absence of CSK and RR, the players available would remain spread across eight teams, preventing the talent pool from being diluted, giving the two new teams the opportunity to establish their own competitive identities before the talent must be spread more thinly from 2018 onwards.  

However, there is little doubt that this is the most serious crisis the IPL has ever faced, and things are rarely straightforward in Indian cricket where politics, nepotism, and horse-trading are common-place. There will almost certainly be much discussion, diplomacy and perhaps threats and deals to even reach a point at which the BCCI are confident in the direction of their policy, let alone the details. And this is no time for delays or obstructions. Firm and decisive leadership will be needed at a time in which sponsors and associates are wary of the damage the scandal is doing to the league.

Title sponsors PepsiCo India are reportedly considering not renewing their deal after 2017, while major sponsors of CSK, Aircel, and of RR, Ultratech Cement, are reconsidering their own association with the IPL. Perhaps most concerning is that in a week in which it seems the BCCI are reportedly considering selling two new teams, the manufacturing giant Jindal Group, which recently expressed an interest in buying a franchise, has decided against doing so due to the “negative aura” around the league.

Given the monolithic presence of the IPL within cricket, the tendrils of this uncertainty creep to every corner of the global cricketscape. It is hard to overstate the importance of this saga for cricket as a whole - a weak, smaller or poorer IPL could have dramatic and far reaching consequences. The IPL Governing Council will meet on Sunday (19th July) with much to discuss and little time to waste.

Possible IPL Scenarios (Most likely to least likely)

- Sell two new teams and compete a ten-team IPL from 2018 when CSK and RR return.
- Terminate CSK and RR and sell two new teams and stage an eight-team IPL from 2016.
- CSK and RR owners sell their teams and stage an eight-team IPL from 2016.
- BCCI manage CSK and RR for two seasons and stage an eight-team IPL from 2016.
- Stage a six-team IPL until 2018 when CSK and RR return.



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Freddie Wilde is a freelance T20 journalist @fwildecricket....

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