The reverse bidding process for drafting in two new teams in place of the suspended franchises for the next two years of the Indian Premier League has turned out to be a masterstroke by the Board of Control for Cricket in India.
Even when the BCCI set off the reverse bidding auction, it was assured of saving a few crore rupees from its coffers. The invitation to tender documents specified that the BCCI was assuring Rs. 40 crore to each of the two owners per annum. That meant the BCCI had set aside Rs. 160 crore to be paid to the two new teams.
However, the BCCI wouldn’t have incurred additional expenses towards it. Since the new teams did not have to be paid central revenue income share, the additional expenditure for two teams would have been taken care of. Thus, the BCCI was assured of an 13.5 per cent in addition to the fixed 40 per cent.
According to the IPL’s central revenue model, 54 per cent of the total income is divided equally amongst eight franchises. Since two original franchises, Chennai Super Kings and Rajasthan Royals have been suspended for the next two editions, the other franchises will continue to get 1/8 of the original pool.
Many industry experts had been sceptical over whether the BCCI would be able to attract the bids, considering the short tenure and negative publicity surrounding the IPL.
Now that the two new owners have decided to pay BCCI Rs. 16 crore and Rs. 10 crore per year, the BCCI doesn’t have to shell anything from the reserve fund. In fact, the Board will be richer by Rs. 52 crore over the next two years.
“While the critics would hopefully stop going after the IPL revenue model now, the development would be eventually result in being music to the ears of the BCCI member units,” said a BCCI insider.
“More revenue from the IPL would mean more profits for the BCCI and it effectively means more money to be distributed to the State associations.”
