Indian Cricket: A crisis of confidence and credibility
05.11.2015By Murali Krishnan
These are testing times for the cash-rich Indian Premier League (IPL) that has truly been thrown into drastic uncertainty. Its reputation had taken the most serious walloping after the 2013 spot-fixing scandal that led to a committee appointed by India’s Supreme Court to suspend two popular franchisees Chennai Super Kings and Rajashan Royals for a period of two years.
And along with the suspensions in July this year, the committee imposed a life ban on tainted co-owners Gurunath Meiyappan and Raj Kundra for betting in matches. That by itself would have been a cause for action and for the tournament to be red-flagged as their conduct was found to have affected the image of the Indian cricket board (BCCI), the league and the game.
Just when the BCCI working committee was figuring out how the tourney will play out next year and try finding a way forward in the absence of two iconic teams, it suffered a double-whammy early this month. Title sponsor PepsiCo expressed its intent of pulling out of the controversy-marred cricket tournament.
The reason was quite obvious. Insiders say the cola giant had been mulling this pronouncement for a while. The decision clearly signaled IPL’s loss of credibility following the string of controversies associated with the razzmatazz version of the game.
Those in the know say global chairman Indra Nooyi had made it amply clear that the company would only associate with ethical and clean sporting properties. A couple of years back the beverage giant had terminated its contract with ace golfer Tiger Woods following an infamous sex scandal.
Hounded by controversy
Though an embarrassed BCCI tried to put up a brave face and issued a statement that "steps will be taken to address PepsiCo's concerns" hoping that it will try to salvage the deal and convince the sponsor to stay on, there is no certainty.
A joint statement of BCCI and Pepsi said; "BCCI and PepsiCo have had a long-standing cordial relationship and have been in discussions to work out a solution which addresses PepsiCo's concerns. Both parties will share it when ready."
So how damaging is the Pepsi pullout? The American beverage giant had paid USD 60.8 million for the five-year IPL title sponsorship in 2012, almost double of what DLF, one of the largest commercial real estate developers in India, had paid for the previous five-year period.
Some media planners are of the opinion that the pricing of IPL could see as much as 30 per cent viewership drop. Apart from the taint of the IPL, the next brand will probably have a shorter duration of the contract. Furthermore, the next title sponsor might find it hard to build up its association with the league in two years, maintained Sam Balsara, chairman at media buying group Madison.
Similarly other media planners were reported saying that they would expect to see a 25-30 per cent decline in the title sponsorship rights.
Around 90 percent of the advertisement money targeted at sports in India goes to cricket and one of the two teams (Chennai Super Kings) that the court-appointed panel recommended for suspension is owned by India Cements.
Former International Cricket Council (ICC) president Ehsan Mani is forthright when he insists that Pepsi’s severing of ties with the IPL is a mighty blow to the Indian cricket board’s reputation. Mani went one step further and compared the Pepsi-IPL issue to the FIFA scandal that rocked international football which resulted in Sepp Blatter, the supremo, being suspended.
“When sponsors are not sure about the integrity of their product, they take exception. They always want the highest ethical standards and even a hint of corruption makes them iffy,” said Mani, who held the reins of the ICC between 2003-2006.
Ali Bacher, South Africa’s former powerful cricket administrator termed the snapping of ties as a serious “wake-up call” for Indian cricket. “It is a very significant signal to the BCCI, and they need to heed it,” was Bacher’s succinct comment.
Expectedly IPL chairman Rajeev Shukla tried to play down the crisis. "They have been a long-time partner. We are in talks with them and have shared a cordial relationship. Both want to reach an amicable solution,” he said.
But what is certain beyond a shadow of doubt is that the sponsorship dilemma had roots in the betting scandal in 2013, which the former BCCI chief N.Srinivasan refused to deal with the way it should have been. Srinivasan failed to act when an illegal gambling and match-fixing scandal engulfed the IPL and the team he owns.
His son-in-law, who was manager of the CSK, has been indicted as one of the prime accused in the case. Not only did Srinivasan decline to set up an independent probe into the matter, but he also refused to step aside, despite calls from all quarters.
It required the Supreme Court to step in, appoint a committee headed by former Supreme Court chief justice R M Lodha to look into the charges and the ‘conflict of interest’ issue. The rest is history.
Clearly, new board president Shashank Manohar, who took over recently, already has his hands full to bring probity and transparency to Indian cricket following the damning Lodha committee report recommendations. He has yet one more issue to deal with.
What will be the future of IPL?
So how will IPL 2016 pan out? And will there be a dip in television viewership should advertising brand owners decide not to throw their weight behind it? Consulting firm American Appraisal in early 2014 assessed the total value created by the IPL during the past six years to more than USD 3.2 billion.
Industry experts still believe that the brand IPL is still hot and lucrative property and hold out hope that for prospective advertisers in the ninth edition of the game to be played in 2016.
“We don’t know the reasons as to why Pepsi decided to pull out before the end of the contract but we do know that this will not affect the IPL’s business as it has increased its viewership by 30 per cent in the last one year despite teams quitting and Lalit Modi getting it a bad reputation five years ago,” says Rohit Gupta, President, Multi Screen Media (MSM), the official broadcaster of IPL.
Though E-commerce companies such as Paytm and Snapdeal are reportedly looking at picking up the title sponsorship if Pepsi ends its deal, there is still no transparency on the issue. Shankar Nath, senior vice-president at Paytm, is on record saying said the company would evaluate the opportunity once the controversy was sorted out and there was more clarity.
The company is the title sponsor for all domestic and international cricket matches to be played in India till 2019 bagging an over Rs.200 crore (30.5 million USD) deal as BCCI’s title sponsor for a period of four years.
“It is all up in the air. Only if they have positive assurances from the BCCI bosses that they will rebuild the IPL brand, will sponsors decide to put in money,” said a senior corporate honcho.
“A lot is at stake here…especially reputations.”
The only faint glimmer in an otherwise gloomy situation is that there has been renewed interest and awareness in sports other than cricket, popularly referred to as the opium of the masses.
At least now people take an interest in badminton, tennis, hockey, football and kabbadi with premier leagues being formed around these disciplines to drive viewership and attendance at these venues. Advertisers and sponsors are turning their gaze at these sports especially the Pro-Kabbadi League and the Indian Super Leagues that are seeing increased viewership numbers.
What is certain is that the upcoming edition of the IPL is bound to lose its zing. Currently the tournament has only six teams which will obviously result fewer games, and a drastically shorter tournament is not a commercially viable one.
A six-team competition will have only 34 matches, severely compromising the BCCI's revenue.
A shortfall will affect the central revenue pool, a large chunk of which is distributed equally among the teams. Such a scenario would make it virtually impossible for all the stakeholders to make a profit from the tournament.
Another extreme option, says Amol Karhandkar, a cricket writer who has chronicled the tournament since its inception, is suspending the IPL for two years so that the BCCI can clean up its act. But that is not going to be an easy call. Suspending the IPL would not only affect the brand. It would have huge consequences on the BCCI's revenue, and as a result the revenue of state associations and players.
What the future holds for the IPL is tough to guess at the moment. It will take more than a monumental effort to keep the tournament alive and kicking. The need of the hour is to stamp out corruption which has given the tourney a tainted name.