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Disqualify CSK from IPL, observes Supreme Court

Coming down heavily on Chennai Super Kings (CSK), the Supreme Court on Thursday observed that the Indian Premier League (IPL) franchise backed by N Srinivasan and India Cements should be disqualified. Raising concerns over a conflict of interest, the judges asked Srinivasan, also the Board of Control for Cricket in India’s (BCCI’s) president-in-exile, to furnish details of India Cements’ shareholding and board members.

The judges also criticised Gurunath Meiyappan, Srinivasan’s son-in-law and former team principal of CSK; and frowned upon the team’s captain, Mahendra Singh Dhoni, for holding an important position in India Cements.

The Supreme Court Bench headed by judge T S Thakur, which resumed hearing in the case relating the IPL spot-fixing controversy, rejected a plea from Srinivasan’s counsel, C A Sundaram, that the investigation in the case be left to the BCCI disciplinary committee, which had a code of conduct and rules to deal with corrupt practices.

IPL WITHOUT CSK
  • Rs 54.6 cr: BCCI to lose the annual franchise fee it gets from the team
  • Rs 59.8 cr: The annual fee the 20 players of the team will not get
  • 14: Decrease in the number of matches (from 60 to 46) if the number of teams is reduced by one
  • Rs 167 cr: The reduction in broadcasting rights fee MSM might ask for — it pays Rs 725 cr at present — due to decrease in number of matches
  • Rs 46 cr: The haircut IPL sponsors might want because of fewer matches being played; they pay Rs 200 cr at present
  • Rs 45 cr: CSK’s loss of revenue from sponsors, besides Rs 20 crore as gate money
  • Rs 200 cr: Likely decline in MSM’s advertising revenue from Rs 900 cr last year (from fewer matches at same ad rates as last edition)

The Bench observed instead that the probe and the subsequent action could not be left to the present establishment, as several of its members were under the shadow of corruption. “The present members should not have anything to do with the probe.”

The judges said a new committee should be constituted to deal with the issue. Alternatively, the Mukul Mudgal committee, which recently gave its investigation report in the case, could be asked to take up the matter from where it had left and decide the punishment for the guilty. It might also be asked to oversee the BCCI election, due in a few weeks, they said.

The case was posted for next hearing on December 1.

If the court’s observations are implemented and the CSK franchise is axed, IPL will have to take a hit of more than Rs 600 crore — that is, a fifth of its overall revenue. It will also raise a question mark on the future of the world’s richest cricket tournament.

The axing, if that happens, will reduce the number of matches in the tournament from 60 to 46. CSK earns about Rs 20 crore from gate money and gets another Rs 45-50 crore from sponsors like Aircel, Amazon, Reebok and Orient.

Besides, BCCI is estimated to lose Rs 270 crore on account of no franchise fee from CSK (going by what the team paid this year), reduction in the board’s share of the gate money, and the compensation it might have to pay broadcasters and key sponsors for a decline in the number of matches in the tournament.

When contacted, a spokesperson for Multi Screen Media (MSM), the network that airs IPL matches on the SET Max and Sony Six channels, refused to comment on the matter. The company pays BCCI Rs 725 crore for broadcast rights. Its advertising revenue from IPL, about Rs 900 crore lately, is likely to come down significantly if the number of matches is reduced.

Similarly, the IPL sponsors, such as PepsiCo, pay over Rs 200 crore. They, too, are likely to reduce their payouts.

Worse, the team’s 20 players, who were paid a combined Rs 59.8 crore as fees this year, will be out in the cold. Dhoni, also the skipper of India’s national team, for example, was paid an estimated Rs 12.5 crore this year. CSK had retained Dhoni, Suresh Raina, Ravindra Jadeja, R Ashwin and Dwayne Bravo for a total of Rs 39 crore. Axing of CSK, one of the two most valued franchies, will seriously dent IPL’s valuation. US valuation agency American Appraisal had recently pegged CSK’s worth at $ 72 million, the same as Mumbai Indians’. The total valuation of the eight franchisees was estimated at $ 400 million.

The Supreme Court’s observation has cast a dark shadow on IPL’s 2015 season but most still believe the tournament has a certain magic, despite its problems. Omnicom Media Group Chief Operating Officer Harish Shriyan, for example, says: “Controversies have been part and parcel of IPL but there is no other sporting event that gives the kind of reach that IPL does, especially with television viewership ratings of more than four.”

Others disagree, as next year’s IPL is to happen soon after the World Cup cricket. “If CSK is not part of IPL next year, you might find some of the team’s sponsors switching over to the World Cup to get at least some mileage from cricket,” says Havas Media Group Chief Executive (India & South Asia) Anita Nayyar.

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