The coronavirus outbreak has massively impacted the lives of people across the globe. All the major sporting competitions have come to a halt, which is why sporting organizations, leagues and teams alike, have suffered huge losses. The much-anticipated IPL 2020 has been postponed indefinitely by the BCCI currently as the situation in the country doesn't look promising. If the IPL 2020 stands cancelled due to the coronavirus crisis, the board is looking at a humongous financial loss.
Now, IPL's first Chief Operating Officer (COO), Sundar Raman has reckoned that the impact of potential cancellation of the IPL on the world cricket economy will be severe. Sundar Raman was IPL's COO for the first 8 years of the competition and was a prominent figure in making the IPL a brand that it has become today. Sundar Raman, who knows a great deal about the IPL, spoke about the consequences that the cricket economy would face if IPL stands cancelled.
While speaking to The Times of India, Sundar Raman said that the cancellation of both the events (IPL 2020 & T20 World Cup) will have a serious impact on cricket economics for this year. However, in the case of an ICC event, as the contracts run through till 2023, deferring it to 2022 may be possible without loss of revenues. But not hosting an IPL or bilateral series of any country will lead to a loss in revenues, which is far from desirable.
Sundar Raman further said that in an ideal world, the ICC event scheduled in 2021 in India could be shifted to Australia as it is in the same October window and India could host the event in 2022 by creating a suitable window. This will give adequate time for economic recovery and not overcrowd the calendar.
Sundar Raman, who is presently the CEO of the sporting arm of the Mukesh Ambani-led Reliance Industries, which also owns the Mumbai Indians, added that the IPL remains the single biggest event for the global cricket economy. With a contribution of around 1/3rd of global cricket revenues annually, the importance of IPL cricket's global economy cannot be overstressed. Raman claimed that with cricket's economy estimated at $1.9 billion, IPL contributes to 40% of its revenues, which comes to approximately $760 million.
When it comes to players' salaries annually, Raman opines that the IPL alone contributes $100 million every year, which works out to the broadcast revenues of 3-4 countries on an aggregate. As a result, he believes that there are two scenarios added for world cricket to look at - 1) Cricket could become a 'TV and digital only' sport from July 2020 onwards, with fans gradually brought back to stadiums in January 2021 (This would result in a 48% loss of revenues overall) or 2) Cricket could become a 'TV and digital only' sport from December 2020 and fans are allowed into stadiums from April 2021 (However, this would result in an estimated 88% of losses in revenues, out of which 36% would be in the case of the IPL 2020 getting cancelled).
He also said that if the IPL was to be considered a separate cricket body and revenues from IPL were to be removed from the Indian cricket board's revenues, IPL would emerge as the biggest revenue generator for global cricket - higher even than ICC & ACC revenues combined.
World cricket is severely dependent on India's tours to attract interest from Indian broadcasters and even the big countries like England and Australia will also face dire situations if the India tour had to be cancelled. Raman also said that India remains the biggest force in the world economy. Raman added that the importance of India to the world cricket economy cannot be overstressed. Outside of Australia and England, who have large domestic market deals, both valued at US$1 billion each over a 4-year cycle, other cricket boards rely on Indian tours as part of bilateral fixtures to attract interest from Indian broadcasters.