BCCI among richest sporting bodies, boasts of Rs.5,300-crore revenue

Written by Ashish Sinha | Devendra Pandey | Mumbai/ New Delhi | Updated: Oct 5 2012, 07:45am hrs
The Board of Control for Cricket in India (BCCI) confirmed its status as one of the richest sporting bodies in the world, with its annual report for 2011-12 boasting of $1-billion (R 5,300 crore) revenue.

However, the figure comes with a few riders. Around R3,200 crore of this magical figure is locked in arbitration or is with tax authorities, but the BCCI believes these are receivables. On the flip side, if things dont go the BCCIs way, it will have to cough up only around R1,200 crore to the media companies, marketing firms and those franchisees whose contracts it cancelled.

While the scale of disputed sum would hint at financial mismanagement, the cricket boards treasurer, Ajay Shirke, is confident of recovery. We definitely believe that the amount which is locked in arbitration and is with the tax authorities are receivables. The only issue that is in arbitration is our case with Nimbus for the television rights. Our claim is based on legitimate bank guarantees, said Shirke.

The report clearly outlines that BCCI is involved in over half-a-dozen arbitration cases where it has claimed an aggregate of

R2,226 crore from various parties involved. BCCI also thinks it is being wrongly taxed because it should be exempted from paying taxes. For 2011-12, the BCCI paid almost R1,000 crore in tax under protest. It expects a refund of entire R973 crore in taxes in subsequent financial years.

As for the tax wrangle, Shirke said they have a genuine claims for a write-off. As far as taxes are concerned, there has been an amendment in the Income Tax Act in 2009 and we were told that we no longer enjoyed the tax exemption. But we still maintain that we are exempted from taxation and the matter is now subjudice. Though we paid some tax under protest in the last financial year, we stick to our claim. Above all, the BCCI has a TDS credit with the income tax authorities, amounting to over R600 crore. So our position is very safe and sound, he added.

An analysis of BCCIs locked income reveals that in some instances BCCI has made counter-claims against those it is in arbitration with to neutrilise the claims. In its arbitration proceedings with Jaipur IPL Cricket which has claimed R118.81 crore from BCCI, the board has made a counter-claim of R1,422.14 crore.

In its arbitration with Zee Entertainment Enterprises over DLF-Abudhabhi Cup held during 2006-07, Zee has claimed R480.40 crore towards losses due to cancellation of contract. However, BCCI has filed a counter claim of R450.10 crore against Zee. Then BCCI expects media rights income from Nimbus Communications worth R347.30 crore for which it has made provisions in its balance sheet. As on March 31, 2012, a net amount of R347.30 crore is outstanding from Nimbus...the board is confident of receiving the entire balance, it said.

It is our endeavour to always maintain the right checks and balances and add to our financial strengths, and we are continuously working on that, said the treasurer.

If the locked income is added to its actuals, BCCIs kitty for 2011-12 was roughly thrice the revenue generated by the ICC, five times the revenue clocked by Cricket Australia and 12 times the income of Cricket South Africa. For 2011-12, BCCI generated a gross annual income and surplus of R1,168 crore combining the surplus from IPL, Champions League T20, media rights and sponsors. Add to it R1,200 crore income earned from IPL and Champion League (assume it is the same as last year but missing in the treasurers report this time around), and another R3,200 crore which the board believes should come to its balance sheet, the potential income for BCCI stood at R5,568 crore or $1.05 billion as on March 31, 2012.

Richest across boards: Even setting aside the locked income, BCCI generated a standalone income of R850 crore, a jump of 46.2% in 2011-12 over previous year. But when clubbed with other income including those from IPL, CL-T20, BCCI generated an income of around R2,400 crore, over 10% jump from 2010-11. The standalone net surplus of BCCI also went up 101.53% to R382.36 crore as against R189.73 crore in 2010-11.

Compare this to other cricketing bodies. The total income generated by the International Cricket Council (ICC) for the same period (financial year ended December 31, 2011) stood at $321 million (R1,701 crore) while Cricket Australia clocked $174.39 million (R922 crore) till June 30, 2011. And Cricket South Africa clocked total revenue of $87 million (R462 crore) till April 30, 2011.