Is the BCCI financially COVID-proof?

The Board of Control for Cricket in India (BCCI) is on safe ground thanks to the lucrative IPL media rights and smart investment strategy.

Cash cow: The IPL is perhaps the single biggest contributor to the BCCI’s coffers.   -  AFP (REPRESENTATIVE)

Corporates all over the world have been feeling the pinch because of the COVID-19 outbreak. Sports federations are no exceptions — with live sport coming to a standstill, broadcast revenue has been severely hit.

While Cricket Australia (CA) is in financial trouble, the Board of Control for Cricket in India (BCCI) — the richest cricket body in the world — is unlikely to be affected in the near future, even if it is forced to cancel the Indian Premier League’s 2020 edition.

Insiders attribute the CA’s difficulties — most staff salaries have been cut by 80 per cent pay cut  — to “careless planning” since it has invested heavily in the equity market. The executives have taken a voluntary 20 per cent pay cut to ensure continuity and smooth functioning. On the other hand, the BCCI — being a registered society — has played it safe, resulting in financial security.

“We are not allowed to invest in equities,” BCCI treasurer Arun Dhumal told The Hindu. “Moreover, the BCCI has always parked excess funds [in instruments] with assured returns.”

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According to BCCI’s 2017-18 balance sheet, its cash and bank balance, as on March 31, 2018, was ₹5,526.18 crore. Of this, ₹2,011.83 crore was in fixed deposits. Approximately ₹900 crore was kept aside in escrow accounts to deal with various arbitration proceedings.

Add to this the fact that the IPL’s media rights have skyrocketed since 2018, and it hints at the BCCI being well-placed to deal with the financial fallout of the pandemic.

Since 2018, Star India on average pays ₹3,270 crore annually for media rights. Besides, the BCCI earns approximately ₹700 crore in sponsorships (₹440 crore from title sponsor Vivo and ₹250-300 crore from associate sponsors). Even after distributing half of this revenue equally to the eight franchises, the BCCI is left with an assured annual income of almost ₹2,000 crore, just from the IPL.

The Board also receives approximately ₹60 crore from Star India for every international home game.

As a result, if the IPL — albeit a curtailed edition — is held towards the end of the year and the BCCI’s home season with 17 scheduled games proceeds unscathed, Indian cricket is unlikely to suffer financially in the immediate future.

Still, Dhumal is cautious and admits it’s too early to judge whether the BCCI is COVID-19-proof. “Obviously there will be some ramifications. We will have to wait till cricket resumes to assess the actual impact,” he said.

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Minimising impact

At the moment, though, it’s unlikely that the BCCI will have to introduce pay cuts, either for its administrative staff or contracted players and coaches. However, the fact that the BCCI disburses 70% of its annual surplus among affiliates — read state associations — also means that if the Board’s revenues are affected, it will have a big impact on domestic cricketers.

“Even in the worst-case scenario, the BCCI will try and protect the staff and cricketing fraternity, and do its best to minimise the impact on our cricketers and administrative staff,” Dhumal concluded.

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