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BW Businessworld

Spoiling The Cricket Party

Photo Credit :

in Lahore on 3 March (AP)

The terrorist attack on the Sri Lankan team in Lahore has far greater ramifications for cricket than earlier imagined, and at the larger level for the business of sports. As the world slips further into recessionary conditions, the coming Indian Premier League (IPL) season was being looked upon to reverse the gloom. Unfortunately, the hail of bullets that sent the traumatised Lankans mid-tour back to Colombo have killed those hopes, too.

Haroon Lorgat, CEO of International Cricket Council (ICC) thinks it will be some time before international cricket could be played in Pakistan. “It’s difficult to see international cricket being played in Pakistan for the foreseeable future,” Lorgat told reporters in London.

Among others, Dubai-based sports channel Ten Sports will take the biggest hit. The channel — in which Zee Entertainment has a 50 per cent stake — only recently renewed its contract for telecast rights with the Pakistan Cricket Board till 2013. The rights, purchased for $80 million, translate into 181 days of international cricket and include two India tours. The channel now has the option of renegotiating its telecast fees or rescheduling matches in Dubai and Sharjah.

In India, the Lahore attack and the upcoming elections have cast a shadow over the eagerly-awaited IPL season, which is set to kick off from 10 April. Home Minister P. Chidambaram has said para-military forces cannot be spared for IPL matches during the election period (16 April-13 May). This has sent the Board of Control for Cricket in India (BCCI) and IPL Commissioner Lalit Modi scurrying to rework the matches or consider a cancellation.

But observers think postponing the IPL season would be difficult. “The Indian team leaves for West Indies on 4 June, then there is the ICC Twenty20 matches post-monsoon, followed by an Australian tour of India. The dates are too tight to allow for 45 days of IPL matches in a fresh schedule,” says Satish Menon, CEO of Sport18. Modi, however, thinks that reworking dates in the existing schedule is a better option. Ultimately, the central government will have to take a call between cricket and security concerns.

A cancellation could mean serious damage. “The IPL season was celebration time. Along with the money elections pumps into the system, IPL would have given a spike,” says Madhukar Kamat, president of the Advertising Agencies Association of India and CEO of the Mudra Group. “If the season is postponed, the event will lose momentum.”

Sport18’s Menon says that one IPL season delivers about Rs 250 crore-300 crore in telecast revenue. That would be the loss of telecast rights holder Sony Max and Doordrashan, and consequently for BCCI that will have to scale back telecast fees. Ground rights are worth Rs 100 crore, while IPL team has a budget of Rs 20 crore-25 crore in players fees that will not be earned. Even if Modi succeeds in pushing through the current schedule, will the foreign players travel to India? New Zealander Jacob Oram says he has second thoughts about coming while England’s Kevin Pieterson and Andrew Flintoff are under pressure from colleagues to call off their participation. Without the glamour of these international faces, IPL could lose much of its élan.

A recent KPMG-Ficci survey on the media and entertainment industry values India’s sports market at Rs 2,000 crore and growing at 20 per cent annually. A single IPL match is expected to generate Rs 20 crore. “Sports all over the world, and cricket in the subcontinent, are one thing consumers are willing to pay for,” says Rajesh Jain, author of the KPMG report.

Unfortunately, KPMG had not calculated on the Taliban spoiling the party.

(Businessworld Issue Dated 10-16 March 2009)

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