Star may take a big hit as IPL called off
With the IPL (Indian Premier League) having been called off, without a firm resumption data, broadcaster Star India could be staring at significant losses. Industry experts believe that unless the tournament resumes later in the year –which is possible despite the hectic cricket calendar — Star might need to pay BCCI a chunk of the contracted Rs 3,269 crore.
Star has paid a staggering Rs 16,347 crore to acquire the IPL broadcasting rights for a five-year period ending 2022.
Sandeep Goyal, chairman at Mogae Media, told FE he was not sure whether the Rs 16,000 crore bid provided for part payment in case the tournament was a truncated one. “My understanding is that there is no such provision and if the tournament is a truncated one and the remaining matches are not played, Star is liable to pay the full amount,” Goyal said.
However, the agreement may have pencilled in an abrupt suspension of the tournament in which case the blow would be softer, according to others familiar with the tournament. Indeed, with BCCI calling of the tournament all stakeholders are in a spot. IPL 2021 had commenced on April 9 and was scheduled to end on May 30.
Also, given that not even half the games have not been played Star is expected to take a significant hit on advertising revenues of as much as 50%, analysts estimate. The broadcaster had targeted Rs 3,200 crore in ad revenues. An industry executive said some advertisers like liquor brands, hit hard by the mobility restrictions may want to back out of IPL even if it is held later. Liquor has not been categorised as an essential service and the mini lockdowns have already had a bearing on their finances,” the executive said. Star India in a statement said it supports BCCI’s decision to postpone IPL 2021. “The health and safety of players, staff and everyone involved in the IPL are of paramount importance,” the broadcaster said.
Advertisers who have backed the franchises by way of sponsoring their jerseys, caps or other segments will, however, lose their money as the payments have already been made and the tournament was called off abruptly. The decision to postpone was taken after Sunrisers Hyderabad’s wicketkeeper-batsman Wriddhiman Saha tested positive for Covid along with Delhi Capitals’ spinner Amit Mishra. Earlier this week Chennai Super Kings bowling coach L Balaji along with Kolkata Knight Riders bowlers Sandeep Warrier and Varun Chakravarthy had also tested positive.
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