Lodha’s verdict may prove painful for IPL coffers

Justice Lodha’s verdict on banning of Chennai Super Kings (CSK) and Rajasthan Royals (RR) would come down heavily on the revenue of the much celebrated cricket tournament. As per a news report by The Economic Times, IPL revenue is likely to drop by about 35 % if there are only six teams next year. About 25 % of this will be because of fewer matches while the rest will stem from a decline in interest from advertisers and sponsors.

Every IPL game gets about 75 advertising spots of 30 seconds each. That comes to around 2,250 seconds of available advertising per match. At 60 games, this adds up to 135,000 seconds. This year, the IPL broadcaster sold spots at Rs 4.5-5 lakh per 10 seconds. If there are only 34 games, the number dips to 76,500. That also means IPL broadcaster Multi Screen Media pays a lower broadcasting fee to the BCCI. Each team gets a share of this. "When the collection is less, the whole kitty too gets redu too gets reduced," a media analyst told the ET. "Thereby, when it's time to distribute, it will be much less, affecting the (finances) of teams and their profitability."

Chennai Super Kings is the top team in IPL, having won the league twice since its beginning in 2008. Among the top 10 matches in the last season of IPL, CSK featured in eight while Rajasthan was in two, according to television ratings data from Tam Media Research.
Star players such as Mahendra Singh Dhoni, Suresh Raina, Ravindra Jadeja, Shane Watson, Steve Smith, Ajinkya Rahane among others are members of the two franchises. Their absence would hit IPL ratings, in turn lowering ad rates for the broadcaster. "With a lower number of matches, it will be difficult to make up for the difference in revenue (as the) the fixed cost remains the same," Basabdatta Chowdhuri, chief executive at Platinum Media, a part of Madison Media Group told the financial daily. "It is not good good for the game. The credibility suffers."

She recalled that when the first match-fixing scandal broke in the late 1990s, the ratings of India matches, including those against Pakistan, had nosedived.

Chowdhuri also said an exit by the Chennai team would lead to lower viewership. "CSK is a big team. It's like Manchester United going out of the EPL (English Premier League) or Barcelona going out of the Spanish league," she said.

"Next year, an increase in rates will be impossible (if there are fewer teams). They would not be able to get even last year's rates," said a media planner, not wanting to be named. But Nandini Dias, chief executive officer at media agency Lodestar UM, offered a contrarian view. "A shorter, tighter tournament might actually be better for ratings. The dip we see in ratings in the middle of the tournament today might be less then," she told the ET.

(Image: India Times)