IPL-II likely to take Rs. 34 crore hit

he IPL season I in India turned out to be a money-spinner. The Board of Control for Cricket in India (BCCI) grossed Rs. 662 crore from it and met its commitments to the eight franchises paying Rs. 230 crore as their share from the central and local revenue pool and distributed Rs. 202 crore to 25 State units.

The BCCI also paid Rs. 43 crore to the International Management Group (IMG), a global sports entertainment and media company that was involved right through from the IPL foundation to executing the event.

Higher expenditure
Having received their share of the money, the State units expected an increase from the IPL season II. But the shifting of the IPL to South Africa resulted in higher expenditure and an estimated deficit of Rs. 34 crore as against a surplus of Rs. 15 crore from the first season.

According to sources, the BCCI has estimated an expenditure of Rs. 73 crore on production costs for staging the tournament in South Africa as against an actual expenditure of Rs.51 crore incurred in India last year.

The BCCI has also drawn up an estimated expenditure of Rs. 148 crore (tournament expenses) for the event in South Africa as against an actual cost of Rs.73 crore in India. The BCCI has also estimated a payment of Rs. 37 crore to IMG as agency fees and commission for season II.

After the BCCI AGM in September 2008, the IMG fee was renegotiated to Rs. 33 crore.

“It was discussed at the Working Committee and the BCCI was advised to renegotiate,” said a representative of the association who attended the Working Committee here in the second week of August.

A BCCI official said that members advised us to renegotiate with IMG because a large part of the matches are organised by State associations.

After the IPL I season in India BCCI and IMG officials met in Bangkok — all the franchises were also present — and a number of times after the IPL II in London and in Mumbai. The BCCI requested IMG to come up with a fresh proposal with regard to its remuneration. The IMG was not prepared for this.

Rival stands
On August 28, the BCCI officially informed the IMG that their services will not be required anymore, while the IMG’s senior vice-president, Andrew Wildblood has replied saying: “Since the proposed fixed fee variation (Rs. 33 crore) has not been ratified by the BCCI, the original commission-based system remuneration continue to apply.

It’s also perhaps worth pointing out that, despite the effort and commitment made by IMG to successfully relocate the tournament to South Africa in 2009, IMG has yet to be paid anything other than an amount suggested on account of our out of pocket expenses.”

Mr. Wildblood has finally told N. Srinivasan, Secretary, BCCI that that “the clarifications in this letter will lead you to reconsider your position and in the meantime we reserve all our rights and remedies at law under and in respect of the contract.”

While the BCCI-IMG tussle looks to continue and would be discussed at the IPL Governing Council meeting here on Wednesday, the BCCI has estimated a combined payment of Rs. 303 crore from the Central and Local Pool revenue to the franchises (as against their combined annual fee of Rs. 289 crore to the IPL) and Rs. 202 crore to the 25 State units from the projected Rs. 774 crore revenue earned from season II.

The contribution from media rights is put at Rs. 355 crore.

2011 WC | Pakistan forsakes host status

Pakistan has forsaken the right to be a host nation of the ICC Cricket World Cup (CWC) 2011.

At the meeting of the Central Organising Committee (COC) of the CWC here on July 14, Chairman Sharad Pawar had told the committee that the Pakistan Cricket Board (PCB) would continue to be the host and he would request the PCB to nominate three representatives to the COC.

The PCB had acceded to the request and nominated its Chairman Ijaz Butt, Wasim Bari, Director, Human Resources, PCB and Subhan Ahmad, Manager International, PCB to attend the COC meeting here on Wednesday.

However, the outcome of the meeting between David Morgan, President, ICC and Mr. Butt at Dubai last Thursday (August 27) has confirmed that only India, Sri Lanka and Bangladesh will remain the host for the quadrennial event.

“The ICC has bought the host rights from the PCB at the meeting in Dubai and Pakistan will not be a host nation. The PCB representatives will not be here for the meeting,” said a functionary of the COC-CWC 2011.

An official release from the ICC last week said: “The ICC and PCB have reached a settlement to the dispute relating to the staging of the ICC Cricket World Cup 2011.

In an agreement with the commercial arm of the ICC, the PCB will retain its host fees and also receive an additional payment as reasonable compensation for the loss of hosting rights that it would have enjoyed had it hosted the matches on Pakistan soil.

“It was further agreed that the PCB would be free of its liabilities and obligations associated with hosting matches during the tournament, including the location of the tournament secretariat which had originally been set for Lahore.

It is anticipated that the settlement will be signed by both parties at which point the PCB has agreed to withdraw its legal proceedings against the ICC.”

After relocating 14 matches (that was allotted to Pakistan) to India (8), Sri Lanka (3) and Bangladesh (3), the ICC Executive Board maintained that the PCB would receive $ 750,000 per match, totalling $ 10.5 million.

Sizeable compensation
Mr. Butt made a public statement that the PCB (after the settlement with the ICC) may receive an additional sum of $1.5 million with a potential increase of another $6 million before the start of the event in 2011.

“At the moment the figure is around $12 million, but I hope it could go up to $ 18 million by the time World Cup begins in 2011,” Butt told reporters at Lahore. Last month Shashank Manohar, President, BCCI said that the three boards of India, Sri Lanka and Bangladesh agreed to host 14 extra matches together without extra compensation.

India will now stage 29 matches including a quarterfinal, semifinal and final, Sri Lanka 12 (including a quarterfinal and semifinal) and Bangladesh 8 (including the opening ceremony at Dhaka (likely to be on February 21) and two quarterfinals).

The nearly three-month long impasse has ended with the PCB extracting enough concessions from the ICC.

COC meeting
The COC members at the meeting here on Wednesday would be free to deliberate on the operational planning and logistics aspect, including inspection of venues, schedule, guarantees to be submitted by the three boards and the budgeted sum of $ 115 million.