IPL’S media rights windfall: Where does the money go?

Quick auction recap: High fives all around. BCCI happy and franchise owners laughing to the bank. Staggering numbers. Almost ₹50,000 crore over five years, every game worth ₹120 crore, digital more expensive than television.

Step back, let the numbers sink in. And ask: What is IPL’S money trail? Where does it go?

To the BCCI is the likely answer, but that is only half right. BCCI keeps half and shares the rest with IPL teams. This equal split is built into the BCCIIPL team contract as a key condition of sale/purchase.

BCCI’S ₹25,000 crore windfall is tax exempt because authorities have deemed IPL a cricket development, non-profit activity. BCCI is therefore free to do whatever it wants and president Ganguly announced his desire to take Indian cricket to newer heights by promoting talent and developing infrastructure. Secretary Shah wants benefits to percolate down the pyramid and cricket to reach the interiors of India.

Expect also a big push for the ‘fan first’ policy that promises better facilities and a friendly stadium experience. Those in cricket’s ecosystem stand to gain and pensions to past players, umpires and coaches have already been raised. These are welcome steps; with money falling from the skies like rain in a monsoon, the upside should be evenly distributed.

Not all of BCCI’S riches (₹5,000 crore annually) remain within its headquarters at

Cricket Centre, Wankhede Stadium. Lot of it is passed on to state associations as the annual subsidy and a special grant. The IPL cake is sliced and everyone gets a generous helping in what is a ‘direct cash transfer scheme’, the no-questions-asked gift cheque.

Lack of transparency

But multiple crore rupees in the hands of people down the line in the supply chain is a cause for concern. Money is a good thing but, experience suggests, too much in the wrong hands is not. Not all state associations have robust financial systems, and instances are many of a lack of transparency and accountability. Courts are looking into past cases of misuse of BCCI funds.

With more money flowing downstream the challenge will be to prevent the depressing Uttarakhand narrative from repeating elsewhere. For this, there are two possible solutions: One, impose president’s rule for ensuring oversight on fund use. BCCI appoints match referees for good governance and curators for pitch preparation. Hence, any move to directly control state association funds is prudence, not interference or suspension of the democratic administration system.

Two, in the spirit of constructive federalism (BCCI mirrors the Indian political structure), BCCI can mandate that monies are funnelled into identified buckets (infra/welfare/grassroot development) backed by rigorous audit. In case of non-compliance or default, BCCI can switch off the tap and stop recharging the account.

What happens to IPL teams’ share is no less interesting. Franchise owners receive Rs 5,000 crore annually, and this money goes out of the cricket system.

Put simply, IPL teams’ gain is cricket’s loss. This collective profit of teams is justified and is built into the basic IPL construct and is reward for smart business. Far-sighted team owners took a risk in 2008 to invest in IPL and now that the league has grown into a commercial giant they deserve the proverbial happy times.

The issue however is whether the ‘drain’ away from cricket can be avoided and franchise teams encouraged to engage in development activities. Presently their efforts in this are next to zero. The so-called academies are either training facilities for their squad or a business vertical, another revenue stream to be tapped to improve the balance sheet.

Likewise, support for social causes is a brand-building exercise, one more targeted business and marketing effort.

Franchise teams can’t be faulted for ignoring cricket development; they stay away because there is no compelling reason to get involved. Why would they invest in a player, spend time and money to polish his talent if someone else buys him in the auction? Unless the rule that all hiring (capped or uncapped) can only be in auctions is changed, IPL teams will be forced to bypass the development agenda.

WITH MORE MONEY FLOWING DOWNSTREAM, THE CHALLENGE WILL BE TO PREVENT

THE DEPRESSING UTTARAKHAND NARRATIVE FROM REPEATING ELSEWHERE.

IPL teams and state units

Yet, there is a possibility of a friendly handshake between BCCI, state associations and IPL teams. BCCI should make IPL teams partners of state associations and give them a meaningful role in domestic cricket. Currently their engagement is limited to hosting seven home games and they have an uneasy tenant-landlord kind of relationship. Bengal president complained that no local player has represented KKR since Sayan Ghosh in 2017.

Instead of this potentially volatile arrangement, they could together run academies, hold tournaments and share expertise to develop talent. State associations have much to learn from IPL’S best practices and, with visible on-ground activity, franchise teams will have a larger footprint and engage more meaningfully with fans and players.

There is reason too for cash rich teams to invest in infrastructure in their IPL ‘homes’. Win-win for both.