As Bcci deliberates on a player auction before the 2021 IPL, expected to start in March-end or early April, questions remain whether cricketers' salaries or price could take a hit due to the financial crunch.
Ahead of IPL 2020, the Indian board and the IPL title sponsors, Chinese mobile makers Vivo, suspended their five-year contract (valued at R440 crore per year) for the just-ended season amid anti-Chinese sentiments in India due to the border standoff.
Fantasy gaming platform Dream11 came on board as IPL title sponsors for one year, paying R222 crore. The amount was only half of what the Vivo deal was worth though many felt it was still decent considering the lack of time in getting a new sponsor for IPL 2020, which was shifted to the UAE due to Covid-19.
A fluid situation
The next season may happen in India with fans allowed to attend, there is no clarity on how the business side of IPL 2021 will pan out given the gap between the two editions is less than five months. And India will also host another mega event—ICC T20 World Cup—next October.
IPL team owners seem to be divided on whether economic pressures will impact player salaries though they would prefer to see how the next few months pan out businesswise.
"There could be a situation, could be, given the current circumstances where there might be better optimisation of spend, in case we don't earn as much as we can or should," Ness Wadia, Kings XI Punjab co-owner, said in an interview during IPL 2020.
"It's a tough economic situation. But we should remember when IPL started in 2008 there was a depression. It was tough economically for many businesses. The whole world went into a meltdown. But IPL happened with fanfare."
Wadia could not say whether Vivo will return as IPL title sponsors next year, though he felt the time was ideal for new companies to come in.
"I don't know why Vivo decided not to partner IPL this year. I do know it's only for one year. It is impossible for me to say if they will come back. I am not privy to the developments… but it's a dynamic situation.
"From a fan perspective, I don't think viewership would go down. In terms of sponsorship, we'll have to see. It's an opportunity for a lot of brands to get associated…. It's a big opportunity to be associated, get into the limelight with IPL."
Big bucks game
Rajasthan Royals co-owner Manoj Badale was sure franchises won't hesitate to spend their allotted purse.
"There is economic pressure across the world, but the reality is most teams spend most of their salary caps. The prices paid for players will therefore be largely unaffected as the overall spend will be similar to previous years," Badale said.
Teams had a salary cap of R85 crore for IPL 2020. While teams can't exceed that amount, they can be economical and not spend the entire amount. In the last auction in December 2019, 971 players (713 Indian, 258 overseas) were signed up.
Badale, at a recent virtual launch of a book on IPL , 'A New Innings', he has co-authored with Simon Hughes, acknowledged the uncertainty sports world faced.
"Sports, because of what happened due to coronavirus, because of the economic pressure that is now being placed on different leagues, is having to look at its funding, how to access risk capital, and is having to see how to make up for lost revenues. There is sometimes lot of focus on how much money IPL franchises are making. It's worth remembering that few, if any, franchises made any money for the first 10 years of IPL," Badale said.
"Essentially, you had eight franchises commit the best part of half a billion dollars on the back of a very well-written 25-page IMG prospectus. Nonetheless, it was a lot of money to be invested in 2008 on the back of a financial crisis. That private capital or risk capital that goes into a league is very important. You can get the best players of the world in a domestic tournament if you are willing to pay the best salaries.
"For me, spending money on cricketers is difficult; it is particularly difficult when you are having to compete very hard for the very best players. It's difficult when you have this complex game theory that goes on combined with an allocation issue on "how do I spend to ensure I've got 24 players to cover injuries, to cover key roles". To spend that money to have balance in your teams but also ensure you have four to five superstars in your team—it's incredibly difficult."