With Star India bagging the global rights for IPL from 2018-2022 with a consolidated bid of Rs 16,347.5 crore, the central pool revenue of Board of Control of Cricket in India (BCCI) will double to Rs 3,709 crore per year. Till the 10th edition, BCCI’s central pool was at Rs 1,265 crore per year. Rahul Johri, CEO, BCCI tells FE’s Anushree Bhattacharyya how a transparent bidding process has helped in generating a high sponsorship revenue. Excertps:
Would it be right to say controversies have no impact on the functioning of BCCI and Indian Premier League (IPL) as they have managed to attract advertisers’ money time and again?
The BCCI organises over a 1,000 domestic games every year besides other international tournaments. As an organisation it operates like a well-oiled machine. The fact that whether it’s domestic games or international, all the matches across age groups are held on time, proves that our daily business never gets adversely impacted. Even the IPL irrespective of the situation has always been held as per schedule. This year’s IPL was the biggest ever in terms of viewership, the 2017 edition of IPL reached 400 million viewers whereas the 2016 edition was watched by 361 million fans. Stadium attendance too grew by 25% from last year, thereby registering the highest gate revenues till date. All of which bears testimony to the fact that year-on-year the interest in IPL continues to grow.
Were you expecting such a huge increase in the sponsorship money?
Our aim was to have the most transparent process, resulting in the highest revenue aggregation. For any business to attract valuations of the top dollar one has to ensure absolute transparency, besides being a part of a time tested structure and a proven platform. We had seen this in the last two bids, where Oppo had paid `1,079 crore for a five-year deal, outbidding Vivo mobiles’ `768 crore bid. Exactly the same thing happened with IPL title sponsorship. Vivo retained the title sponsorship rights for the next five seasons (2018-2022) at `2,199 crore, posting a 454% jump over the five-year contract signed in 2012.
How will payment stack up for Star India? By how much is the central pool revenue expected to increase?
According to the terms mentioned in the bid document, any broadcaster who has won the media right has to pay a minimum of 16% of the bid amount every year. This is besides the fact that a broadcaster has to pay the total bid amount staggered over a period of five years. In this case Star India will pay a minimum of 16% of `16,347.5 crore that is about `2,615 crore to BCCI. Yes, central pool revenue has gone up tremendously post today’s bid, which will be beneficial to all stakeholders including franchises, as they too will see an increase in their revenue.
Is there a plan to add two more teams to take the total number of franchises to 10?
There would be only 8 franchises and 60 matches. This again has been a learning as in few seasons with 9/10 teams, 74 / 76 matches have been played, however, 8 teams with 60 matches works best for both BCCI and rights holder.