New TV deal may compensate for Board’s extra IPL expenses

The Board of Control for Cricket in India (BCCI) will compensate the Indian Premier League (IPL) franchisees for the money spent on air travel to South Africa and any extra expenditure incurred towards the accommodation of the teams. This has not been officially communicated it to the franchisees, but sources said that IPL officials are working overtime to work out the figures.

“Whatever extra money we spend in South Africa on hospitality and infrastructure will be taken care of by the Indian board. We have been assured about that by the IPL,’’ a team official said on Thursday.

“We are addressing all the issues and calculating all the possible expenses. The board has already sanctioned some money and we will pump in more if required,” a senior IPL official said.

BCCI, which will lose money on these counts, would however, make more from television rights money this year following the fresh deal with Multi Screen Media (earlier known as Sony) worth Rs 8,200 crore for next nine years.

This year alone, BCCI is expected to make Rs 400 crore from TV earnings, out of which every franchisee is expected to get around Rs 40 crore. On top of that, the central sponsorship, which is generally 10 per cent of the television rights money, will fetch another Rs 5 core. The franchisees can further save up to at least Rs 5 crore because they don’t have to pay service and entertainment taxes to the government this year.

Team owners’ expenses range from players’ and support staff’s salaries, setting up offices to franchisee fee paid to BCCI. Explaining a franchisee’s revenue model, a team official said: “Whatever we will make from the central IPL revenue will more or less go towards paying the franchisee fee to the board. The sponsorship money could help us pay the salaries. The rest is supposed to be our income after setting up offices and spending money on marketing our brand.”

In all, the franchisees are happy that earnings from telecast rights will go up.

Talking about the compensation issue, a BCCI official said that IPL will take care of every little detail like wicket preparation, fire brigade and ambulance, housekeeping, cleaning, external manpower for logistical support, hotel accommodation and catering in South Africa.

“When the talk of shifting IPL out of India first came up, IPL had said that the teams would have to pay for their own accommodation. We don’t know how much extra we will have to pay towards that in South Africa,’’ a team official said. “Considering the cost of living there, BCCI may have to spare at least Rs 10 crore, if not more, for each team. The board will also have to take care of fall in revenue – if that happens – from gate receipts. The board has already stared addressing the sponsorship issue with the concerned partners,’’ another team official said.

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