BCCI to compensate franchises

The Indian board has decided to compensate the eight IPL franchises for any extra expenditure they incur in moving from India to South Africa this year, a senior official said.

Apparently, the BCCI has a "definite idea" of expenses incurred by the franchises last year along with an estimate of how much the cost would have been had the event been staged in India this year, the official said.

"Any expenditure that occur above these estimates due to the relocation to South Africa will be borne by the BCCI and IPL," the BCCI official, who is also a member of the IPL governing council, said. "Of course, this does not mean a blank cheque for the franchises, but a satisfactory resolution will be arrived at."

The IPL declared a gross income of Rs 645 crore in its inaugural year in 2008 and a profit of Rs 51 crore, according to BCCI records. But this time, the board may fall well short of initial expectations, the official said, because a "suo motu decision" has been taken at the "highest level" to compensate the franchises.

"The IPL is a long-term vision and the thinking at the highest level is to nurture the brand at all costs," the official said. "Not holding the IPL this year just because of the costs involved would have been disastrous for the brand. We envisage that the IPL will one day become - some say it has already become - the single biggest cricket tournament in the world."

The Indian board's compensation package, which would run into millions of dollars, is expected to include extra expenditure incurred by the franchises on travel, accommodation, and team costs, including practice facilities and fees for the host provinces in South Africa, which is likely to be paid as a bulk amount to Cricket South Africa (CSA) for distribution to various host provinces.

"For instance, each of the franchises paid an amount of Rs 5 milion last year for each of the seven home games to the local state association in India," the official, who is also a member of the IPL governing council, said. "We will keep that total of Rs 35 million as a benchmark this time and chip in with the extra money."

The Indian board, or the IPL, will even step in to help with team sponsorships, in case sponsors decide to pull out of any arrangement due to the relocation, the official suggested. "We can either help in getting fresh sponsorship for the teams for equivalent and higher amounts or in a worst-case scenario, compensate the amount," the official said. "But I would hope that no sponsor adopts a short-sighted policy just because of this year's relocation because they should know that there's a lot of money coming their way in the long run."

The official also said the BCCI is in the process of transferring to IPL accounts an initial working capital of US$ 10 million in foreign exchange to organise payments for the second edition starting on April 18. "The payment is in the process of being cleared," the official said. "More money will be transferred as and when the need arises."

However, the official refused to offer even a ballpark figure of how much the IPL would cost this year, including the payment to CSA, saying that the "calculators were still at work". "You should understand that an event of this magnitude usually takes about two to three years to organize and we are squeezing everything into two to three weeks," he said.