The eight team owners of the Indian Premier League (IPL) are all set to lock horns with the Board of Control for Cricket in India (BCCI) by refusing to pay their next instalment of the franchisee fee, which is due in January 2009.
The reason: the cricket body has not met its commitment to pay monetary compensation for shifting the IPL Twenty-20 tournament to South Africa this year. Two, it has still not paid them their share (80 per cent has to go to the teams) of the broadcasting rights' money earned from Sony TV.
Each franchise owner had bid and won the rights over a team, which ranged from $111.9 million for Mumbai Indians to as low as $64 million for Rajasthan Royals for a period of 10 years.
The franchisees have formed an association recently and are expected to take up the issue together with the Board.
BCCI signed a new contract with Sony-WSG, which paid over Rs 8,200 crore for broadcasting rights of the IPL matches for nine years.
In the first five years, the IPL teams were expected to share 80 per cent of the fee, which comes to around Rs 90 crore for each team the key source of revenue and the basis of the economic vialbility of a franchisee. Says a leading member of the association and also a senior executive of one of the key franchisee owners: "We are planning to take up this issue with the BCCI, and will not pay our next instalment which is due if our share of the revenue, as well as the compensation promised, does not come to us quickly."
BCCI officials could not be reached for comment. The eight teams pay BCCI the franchisee fee in two instalments, one in January and the other in April.
When IPL-2 was rescheduled and played in South Africa, BCCI has said it would compensate the franchise owners.
According to industry estimates, BCCI owes each team Rs 10-15 crore, which they had lost on ticket sales in their home grounds, in ground advertising and in having to cough up money for travel and stay for the teams and officials in a foreign country. "We were asked to submit bills of our expenditure, which we have done. But there is no clarity on how the accounts will be done, whether this compensation will include just the additional expense (travel, hotel accommodation, etc) or will also include the revenue loss due to matches not being held on home grounds (each team was to hold seven matches at its venue)," said an executive from one of the teams.
