“The IPL is collapsing,” messaged a friend from England moments after news broke late on Friday night that the Board of Control for Cricket in India (BCCI) had terminated the contract of Deccan Chargers.
“It has become too big for the BCCI’s shoes,” he observed. One is not sure if “collapse” is the apt word here but the second part of the message seemed to make some sense.
On many an occasion, the BCCI has looked clueless in handling the behemoth called the IPL. It has terminated the contracts of three franchises (Rajasthan Royals, Kings XI Punjab and Deccan Chargers) although the first two teams managed to obtain stay, eliminated one team (Kochi Tuskers Kerala) and almost scuppered another team (Sahara Pune Warriors).
The management has constantly remained at loggerheads with certain other franchises.
For all his good, bad and ugly methods, Lalit Modi, at least, knew how to keep the flock together.
Modi, of course, is not the issue here. The IPL management is. By throwing the Chargers out, it has not done any good to the image and brand value of the league. Sure, it tried its best to save the Chargers but what was the end result?
Another bitter separation! By letting the situation get out of hand, the BCCI/IPL exposed a woeful lack of imagination and dexterity in handling the crisis.
One way perhaps would have been to outsource the management of the team — like the way the Satyam crisis was handled. The board, anyway, has held back the Chargers’ share from the central revenue and that could have taken care of the expenses.
Governance is a key issue in the league, and how much open is the management to new ideas is the moot point. There has not been a single meeting with other franchises since the DC crisis broke out.
Consultations could have thrown up a few creative solutions, but the IPL/BCCI chose not to involve other teams. Every franchise is a stakeholder in the league and they have a right to know and be informed of the developments.
The way forward looks flush with perils. Having sold a team for $ 370 millions two years ago, the board had created a new benchmark for the overall value of a team. Now it would be under compulsion to extract a similar if not a higher price for the new team that it plans to auction. If not, it will leave at least one party — Pune Warriors — extremely aggrieved. Knowing that it would not get that big a price, the board apparently is contemplating to sell the team for five years, but it would be lucky if the Warriors don’t go to the court for the engineered depreciation in their total worth.
In an IPL-like set-up, the teams can scarce afford erosion in value. Here only two parties benefit, the players and the BCCI, who make loads and loads of money. The third party — the teams — suffers losses year after year. These losses range from Rs 20 crore to Rs 160 crore a year depending on the cost of the team. The franchises’ only hope is the likely appreciation in the price of their fixed asset. In this context, they look to the regulator to help raise the value of their teams but the BCCI has been unremarkably one dimensional in its functioning. Value erosion looks unfailingly imminent.
The IPL also needs an urgent image makeover. By changing and chopping teams, it sends out a message of instability. That could be the reason why my friend from England is saying that the league is collapsing. There is, of course, another reason for him to say so — Kevin Pietersen wants to play for Delhi Daredevils more than Three Lions. That, one understands, is the chief cause for the rift in the England team. But then, that is not our problem.