Source: Times of India The story of international sports over the past decade was one of the unanimous growth, unrestrained spending and fanatic popularity. Coronavirus brought the sports business to an immediate halt. The boom times went bust overnight. The global sports market reached a value of nearly $489 billion in 2018, having grown at an annual growth rate of more than 4% since 2014, and was expected to grow at an annual growth rate of about 6% to almost $614 billion by 2022, and its all come to a standstill due to coronavirus lockdown. Some are expected to handle the cash crunch better than the others. The organizers behind the Wimbledon, cancelled this year, and the Tokyo Olympics, postponed until summer 2021, believe their insurance policies will recover the huge chunk of costs. But many football and cricket clubs are among those to find their insurance policies do not cover pandemics. While all sporting authorities are reeling under the loss of opportunities and financial impact as the world has come to a standstill, sports goods industry in India is amongst the worst hit. The business is shut at a time when sporting activities and the business volume hit the peak. Sports enthusiasts sentiments hit the peak in India with the Indian Premier League underway at this time. On ground March-April is the time when a new generation of sports young guns join sports academies. This is the new consumer base that adds to the yearly business growth of sports industry. IPL 2020 The Indian Premier League is gearing up for a huge loss for sure in the wake of novel coronavirus lockdown. But a loss of what magnitude? That is to be waited and seen as the BCCI has decided that the IPL 2020 season will be suspended until further notice. “BCCI will continue to monitor and review the situation regarding a potential start date in close partnership with all of its stakeholders and will continue to take guidance from the Government of India, State Governments and other State Regulatory bodies.”, stated Jay Shah (Honorary Secretary Of BCCI). As we all know the Board of Control for Cricket in India (BCCI) is the richest cricket body in the world but then a cancellation of the Indian Premier League's 13th edition could deliver a massive jolt to it. In 2018, Star India had won the bid after cracking a five-year deal worth a whooping Rs 6138.1 crore. But the massive deal was only for the media rights of the Indian national team’s home series and domestic cricket for a period of 5 years. Understand this, in 2017 Star India had also won the TV and digital rights for the IPL. They had to spend a staggering Rs 16,347.50 crores for the global rights for a 5-year period from 2018-2022. It is till now the biggest television deal in cricketing history. Thus, a cancellation of the IPL this year would mean a direct loss of Rs 3269.50 crore for Star, who had already suffered a Rs 1216 crore loss in the previous financial year with expenses for the IPL touching Rs 4,000 crore for the 2019 season. The BCCI had also sold the title sponsorship to VIVO for Rs 2,000 crore for a period of 5 years which means a loss of Rs 400 crore in 2020 if IPL is cancelled. Add to this a loss of Rs 200 crore from central sponsorship, and the combined loss comes out to be Rs 3,869.50 crore, if the Indian and overseas players don't take the field in IPL this year.
The overseas players are also at a risk of losing contracts worth millions of dollars in the event of a cancellation or if their respective boards deny them permission to play. The 8 franchises meanwhile, are also going to suffer as they will incur losses from advertising and gate revenue, which was estimated to be in the region of Rs 450-500 crore in sponsorships for all the 8 teams along with an additional Rs 250 crore approximately from ticket sales. Advertisers had paid around Rs 18-20 crore on average for a spot to be in front of the team jersey, and Rs 5-7 crore, for a spot behind the jersey. Advertisement spot in front of the helmet was sold for Rs 1.50 crore, while a position on shoulders of team jerseys went between Rs 2.50-3 crore. The worst part about the whole situation for the BCCI and the IPL stakeholders is that they have not been able to secure insurance covers against Covid-19. Nobody could have imagined that the virus, which originated from Wuhan in China and infected more than 20 lakh people worldwide till date, would bring the whole world to a standstill. Insurance covers for the IPL include: "event insurance, professional indemnity, commercial general liability, kidnap and ransom cover, D&O (Directors and Officers liability) for IPL owners, business interruption, medical and accidental covers, told Rajat Mishra, a Supreme Court lawyer and legal and risk management expert, to Money Control. IPL 2015 had contributed Rs 1,150 crore to the Indian GDP, the BCCI had revealed while the total economic output attached with the 2015 season stood at Rs 2,650 crore. Therefore, a cancellation of IPL 2020 would not only hurt all the parties involved in the IPL but would also hit the Indian economy this year.
5 Comments
Anil
4/20/2020 09:47:39 am
Corona has played it's hand. Now what.
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Anil
4/20/2020 09:49:03 am
A major German newspaper has compiled together a 130-billion-pound invoice that the China 'owes' Germany following the impact of the coronavirus pandemic.
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K-NAV
4/20/2020 10:38:05 am
Brilliantly written!
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Anirudh
4/20/2020 10:40:15 am
Very well and accurately stated. Thanks for the information!
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Dushyaant bhati
4/22/2020 04:06:22 am
Wow! Never thought such a financial impact would come just from IPL! Thanks for the informative and insightful look into how Covid has disrupted IPL. It's fascinating to learn about the unfortunate insurance situation and contract troubles of broadcasters and players. I love when an article intrigues me and answers more questions than I even knew I had! Looking forward for more 😊
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