IPL franchises look at glass half-full despite Covid-19 hit on finances

The eight IPL franchises are counting the Covid-19 cost on their finances, but having gotten past the possibility of the tournament being scrapped this year, they are taking a glass-half-full view of the situation.

The IPL's original March start was scuppered by the first wave of the virus, and the BCCI had to pull out all the stops to rescue the tournament, which has an estimated $6.8 billion brand value. The tournament has been shifted to the UAE and will start on September 19 - nearly six months later than scheduled.

After Vivo paused its title sponsorship for this year's edition, fantasy gaming company Dream11 took it up for INR 222 crore ($29.7 million approx.), roughly half of what Vivo paid annually.

"The discount provided to Dream11 would be a major (financial) hit for the BCCI, along with making arrangements for bio-secure bubble which will be an additional cost burden on the board," Santosh N, an external advisor at financial consultancy firm Duff & Phelps, explained to Reuters.

The league shares 50% of the title sponsorship money with the eight franchises, who will also miss out on gate receipts and in-stadia revenue this year, while existing sponsors demand discounts in the absence of fan initiatives.

The switch has seen Delhi Capitals lose shirt sponsor Daikin, with the air-conditioning equipment maker saying the new dates did not work for them. "The reason being the business scenario and the timing, which earlier, being the summer, would call for advertising efforts to create awareness and recall for the AC category," a Daikin spokesman told Reuters.

Capitals Chairman Parth Jindal has said the BCCI should look at compensating the franchises. "If the BCCI doesn't compensate, there will be a significant loss to each franchise, about a 30% drop in revenues," Jindal told Mint earlier this month.

But with the BCCI at risk of a $547 million drop in revenue had the entire season been cancelled, treasurer Arun Dhumal preferred to look on the bright side. "When you encounter such challenging times and so many impediments, you are bound to lose on certain revenues," Dhumal told Reuters. "Looking at the overall picture, everybody should be happy that at least we've been able to organise it.

"At such short notice, we've been able to get a new title sponsor. It speaks volumes of IPL as a brand, and how it has grown over the years."