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Indian Premier League

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IPLs Stakeholders..

IPL

Franchises

Players,Team

Officials

Sponsorshi ps

Broadcasting RightsUmpires

IPLGoverning

Body

Spectators

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IPL Governing Body

The league run by a separate Governing bodyto independently manage the affairs of IPL.

Integration of accounts of IPL done on annualbasis.

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IPL and Franchisees

Formation of Franchisees contract T hrough auctioning. (Offer to invitation) Auction winners own the IPL team for perpetuity.

Contract between IPL and Franchisee Franchisee can earn revenues through

Broadcast rights (Franchise: IPL 80:20)Sponsorship (Franchise: IPL 60:40)Team sponsorshipGate receipts (Franchise: IPL 80:20)In-stadia Advertising

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Main expenses Franchisees have to bearFranchise fee to IPLPlayer Acquisition cost

Stadium hire chargesTeam costs (Coach, travel, insurance, office, other expenses)Marketing/ Promotion costs

Termination of contractContract can be terminated on the grounds of

Breach of contract. Mutual consent of franchisee and IPL

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T eam composition rules

Minimum squad strength of 16 players plus one physio

and a coach.

No more than 10 foreignplayers in the squad and at

most 4 in the playing XI.

As this is domestic cricket sominimum of 8 local playersmust be included in each

squad.

A minimum of 2 playersfrom the BCCI under-22 pool

in each squad.

The first players' auctions were held on 2008. The IPL placed icon status on aselect few marquee Indian players. These players were Rahul Dravid,Sachin

Tendulkar,Saurav Ganguly, Yuvraj Singh and Virender Sehwag. VVS Laxman initiallynamed an icon player, later voluntarily opted out of his icon status to give his

team (Deccan Chargers) more money to bid for players . Mahendra Singh Dhoni

has been termed as a marquee player since he doesn't have a local team .

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U mpires and Match Referees..Contract with IPL

Code of Conduct set by IPL for Umpires and Match Referees.

Breach of Contract Can be reported by:

In case of Umpires: the refereesThe Team ManagerFranchisee of one of the teams playing the matchIPL Chairman

Hearing:By Commission in accordance with the procedure set out inOperational Rules with IPL acting as claimant and the Umpire orreferee as Respondent.

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Broadcasting Rights Securing of Broadcasting rights

Auction (Offer to Invitation) Sony and World Sports Group into contract with IPL for 10 years.

Contract: Terms and conditions defined by IPL governing body.

Sony contract case Contract terminated on the grounds of

Obstructive commercialization

Poor quality of broadcast.

Sony-WSG entered into new contract with IPL in 2009 for season II.

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Sponsorship The rights granted are subject to:

IPL sponsorship guidelines Governing body rules (IPL Governing Council) General Law (e.g. limitations on alcohol and tobacco advertising)

Sponsorship rights may include: Rights to hospitality company Rights to individual player appearances and endorsements. Rights to player images Rights to use logos and sponsorship designations Promotional and advertising rights across media

Right to display logo on team and replica apparel Right to name the team or event (DLF IPL) Right to branding and visibility at venues Right to match tickets Rights to in-stadium hospitality On air rights etc.

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Franchisee and Players Contract

3 years contract. If a player plays NO games or less than a quarter they will

still be paid the minimum payment, which is 25% of theircontracted amount.

Code of Conduct for Players.

Termination of contract

Mutual consent of Players and franchisee owning theplayer. Breach of contract: violation of Code of Conduct defined

by IPL.

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A uctioning of Players..

In annual auction, domestic players boughtand uncapped players signed through tradingand buying replacements.In the trading window the player can only betraded with his consent.If the new contract is worth more than the

older one then the difference will be sharedbetween the player and the franchise sellingthe player.

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Guidelines for replacements In a bid to streamline the registration process for "replacement" of

players, T he Indian Premier League (IPL) laid down guidelines forfranchisees who want "replacements" to substitute contractedplayers unavailable due to injury or any other reason.The Franchisees must seek prior approval ahead of the SecondPlayer Auction from the IPL for all such "replacements".The franchisee will be able to recruit a "replacement" outside of the

2009 auction, at a player fee no more than that of the replacedplayer and would not be counted as part of the 2009 Auction Purseof US $ 2 million.Additionally players not purchased during the auction will beavailable as "replacement" at a player fee equivalent or greaterthan the reserve price. Also " uncapped " overseas players or Indian

players defined as under the player trading rules would beavailable as "replacement .The DLF IPL also stipulates that if the " replacement " player is anoverseas player, then he would require an NOC from his domesticboard.

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Suit for Injunction : RR filed an appeal against the decision in Mumbai High

Court. Case adjourned the case till Nov. 15 th 2010.

Arbitration RR and BCCI informed court that they would seek for

arbitration under section 17. Justice B N Srikrishna acted as the sole arbitrar. Arbitrar penned the case in favor of the franchisee.

According to Justice Srikrishna:Prima Facie the termination of the contract was Illegal .It appears that the Respondent (BCCI) was very much aware of who the original bidders were, who the ultimate controllers were,and the fact that the Applicant (Jaipur IPL) was a part of the groupcompanies or entity controlled by the original bidders. Theprotestations to the contrary appear to be contrived and too facileto cut ice.

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Injunction against the termination in effect for 6 weeks.Allowed RR to take part in IPL s auction and name the

players it wants to retain. BCCI not allowed to change the rules which might go

against Royals.

BCCI filed case against order in Mumbai High Court: Appealed that in case of injunction there should be fiscal

riders attached to it. RR objected to the argument. Upheld the stay on the termination of RR. Modified the order, adding few conditions:

Court asked to disclose the role three companies who are part of the consortium.Ordered the owners to disclose the shareholding pattern.Franchise also had to provide a bank guarantee, from anationalized Indian Bank, worth $20.83 million.

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ther cases charged on BCCI.

BCCI charged with a slew of legal cases: Charged on the ground that termination of the

contract with the team was due to the proximityto Lalit Modi, the persona non grata in the BCCI.

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K ochi T eam Controversy Team bought with the second highest bid, i.e. of Rs.1533.32 crores by Rendezvous Sports group.

The shareholding pattern of K T K defined was:Rendezvous Sports group (26%)Parinee Developers (26%)Anchor Earth (27%)Film waves (12%)Anand Shyam (8%)Vivek Venugopal (1%)

Of 26% held by Rendezvous Sports Group, the shareholderswere :

Gaekwads (10% sweat equity + 1% paid)Sunanda Pushkar (5% sweat equity)Brand Ambassador (10%)

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Dispute in consortium, i.e. Rendezvous and co-partners dueto

26% sweat equity share held by Rendezvous Transfer of equity to unknown partners.

IPL Governing Council invoked clause 12(1) and gave 30 daynotice to:

Remedy the disputes in the consortium. Provide details of unknown party by Rendezvous

The revised structure of agreement submitted to BCCIofficials.

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T he new shareholding pattern agreed upon :

Anchor Earth (31.4%) Parinee developers (30.6%) Film Waves combine (13.5%) Anand Shyam (9.5%) Vivek Venugopal (5%) Rendezvous Sports World (10%)

Finally announced by BCCI that it was satisfied with theagreements signed by the franchise owners.

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Some of the differences to international Tw enty20 cricket:

.A difference to internationalcricket is a timeout.It gives the players anopportunity to strategiseand take a drink duringthe strict 2 minutes, 30seconds time limit.Each team is awarded twotimeouts per inningstotalling to four timeoutsfor the whole game. The

teams can take thetimeout when instructed,but is necessary to take itat the end of 9th and 16thover.

IPL is also known for havingcommercials during the

game

there is no time limit forteams to complete theirinnings.However, there may be apenalty if the umpires findteams misusing thisprivilege at their ownchoice.

The total spending cap for afranchisee in the first playerauction was US $5 million

. Under-22 players are tobe remunerated with aminimum annual salary of US $20,000 while forothers it is US $50,000The most expensiveplayers in the IPL to date isGautam Gambhir of Indiafetched the highest price

of $2.4 million fromKolkata Knight Riders atthe auction for season 4

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H o w IPL business model has given returns??

Unlike its counterparts such as EPL or NBA, the majorsource of revenue for IPL is not stadium ticket salesbut media rights.

Other sources of revenue for IPL are titlesponsorship, the sale of franchises and licensedmerchandise and products. A part of the revenues soraised are retained by the BCCI, a part distributed asprize money and the remaining is divided equallyamong the franchises based on a pre agreed model.

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BCCI inflow:The biggest source of revenue for the BCCI sofar has been the proceeds from franchise bids amountingto a total of $1.42bn . Another major source of revenue ismedia rights that were awarded to Sony for $1bn for aperiod of 10 years and starting from IPL-3, an undisclosedamount for media streaming rights awarded to Youtube .

T itle sponsorships (DLF, Coca Cola etc.) form another bigchunk of the revenues.

Finally, proceeds from stadium tickets, merchandise sales etc.complete the list of major sources of revenues for IPL.

BCCI outflow: Apart from the revenues generated from thebidding of franchises, almost all other revenues are sharedwith the franchises in different proportions

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W ho gains ,w ho risks?? The ones with the least to lose are the gentlemen at theBCCI.Legally, the IPL is a sub-committee of the BCCI, and ithas already guaranteed itself close to $1.75 billion intelevision rights and franchise sales figures.

The title sponsorship for the inaugural IPL tournament, andthe commission from the player auctions - each of the eightfranchise teams can " buy " up to four foreign cricketersthrough IPL - will earn it more.Of course, two-thirds (64 per cent, to be precise) of the

central rights money - television and title sponsorship, forexample - will have to be shared with the franchisees/clubs.Even so, by the simple expedient of sanctioning a newproduct, Twenty20 cricket, the BCCI/IPL has earned thecheapest billion in Indian history .

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T hank You!!!