In an unprecedented financial bailout, the Indian board has sanctioned Rs 22 crore (approximately $5 million) each to the Chennai Super Kings - owned by the BCCI secretary - and Rajasthan Royals, the 2008 IPL finalists, as compensation for cancellation of the Champions League Twenty20 last November.
None of the other six teams invited for the tournament's 2008 edition, which was cancelled due to the Mumbai attacks, has received any compensation from their national boards. The tournament rules are clear that teams are not entitled to compensation from the organisers in the event of cancellation but individual boards are free to take a separate decision in this regard.
Chennai Super Kings is owned by India Cements, which is headed by N Srinivasan, the BCCI secretary, who is also a member of the IPL and Champions League governing councils. Rajasthan Royals is co-owned by Emerging Media, a UK-based consortium, and the Chellarams, the Nigeria-based shipping owners.
The cancellation of the tournament cost each team a guaranteed participation fee of $500,000 and a share of the total prize money of $6 million, apart from potential sponsorship revenue. Chennai and Rajasthan have not qualified for the 2009 edition of the tournament, scheduled to be staged across three Indian venues from October 8.
When contacted, Lalit Modi, chairman of IPL and Champions League, and also a BCCI vice-president, confirmed the IPL compensation amount and told Cricinfo that part of the money has already been paid to the two franchises. Modi declined, however, to comment further on the issue or provide details.
The other teams that were invited for the tournament last year were Victoria and Western Australia, the domestic Twenty20 finalists from Australia, and Titans and Dolphin, the South African toppers, Middlesex, the England champions, and Sialkot Stallions from Pakistan.
Cricket Australia is planning to provide some financial compensation for Victoria and Western Australia from the revenue it hopes to gain from the tournament this year. But these amounts, which will cover advance travel booking, team preparation and lost sponsorship opportunities, are not expected to match the Indian payout. Cricket South Africa declined to comment on the issue but Cassim Docrat, chief executive of Dolphins, confirmed that he has received no information about any compensation.
The BCCI is a founding partner of the Champions League Twenty20, along with Cricket South Africa (CSA) and Cricket Australia (CA), with all three countries enjoying joint decision-making control over the multi-nation, multi-club event. The England and Pakistan boards have no management stake in the tournament.
An official familiar with the decision said there are two opinions within the Indian board on the compensation amount for the IPL teams. "Some feel that the compensation is reasonable considering the money that the franchises would have possibly earned from the tournament," the official said. "But others have expressed concerns that such a move could set a bad precedent. They fear that other IPL franchises may demand similar bailouts if such situations crop up again in the future, even during the IPL."
However, a member of the IPL governing council said the hefty compensation package for the Indian franchises was reasonable given the amount they would have gained from the tournament and loss of the sponsorship money that had been committed to the two teams. The BCCI's original agreement with the IPL franchises included a possible slot in the Champions League for the finalists, and this was factored into most of the major sponsorship agreements the franchises had entered into.
"The IPL's duty and obligation is towards its franchises and a fruitful, long-term relationship," the IPL official said. "The IPL's promise to the franchises was that if you qualify for the Champions League, you will play. But due to unfortunate circumstances, that didn't happen last year and we had to honour that commitment in the best manner possible."
The Champions League Twenty20 was set to start on December 3 last year but was aborted after terrorists attack on Mumbai, one of the main venues, on November 26. The tournament has now been expanded to include 12 teams and invitations have been extended to this year's domestic toppers from seven countries, including three teams from India, two each from Australia, South Africa and England and one each from New Zealand, Sri Lanka and West Indies.