Lodha recommendations fetch BCCI record IPL rights deal
The Lodha panel's recommendations have got a significant role to play in the manner the IPL media rights auctions were carried out this year. The significant shift in the duration of the contract -- cut down from 10 years to five -- was a result of the 'due-diligence' process that as recommended by the Lodha Committee.
The committee had said that the BCCI signed new contracts -- including media rights -- with 'no norms or procedures to select or engage contractors in a fair and transparent manner' in its final report, which was made public in January 2016.
The Supreme Court had mandated these recommendations and had asked the board to ensure that all bids were passed through the due-diligence process, by subjecting them to scrutiny by lawyers and auditors before they were unveiled. This process has been emphasized upon and followed by the Committee of Administrators (CoA) as well.
Auditors from Deloitte and law firm Cyril Amarchand Mangaldas analyzed the bids of the 14 companies that participated in the media rights auctions.
"In business, if you have accountability, transparency, and stability, that translates into numbers. And that is what has happened," BCCI CEO Rahul Johri told ESPN Cricinfo.
"These three tenders have happened under the CoA's watch," he added.
The change in the duration of the rights deal has been beneficial for the BCCI as it received approximately INR 20,000 crore for the deals struck this year, which include the title sponsorship deal and the sponsorship rights for the Indian cricket team that were closed this June and April, respectively.
"You saw the excitement in digital and who knows five years from now where digital will be... It absolutely justifies [reducing the rights term]. Companies plan for five years. I don't know of many companies that plan for ten years," Johri said.
"There is accuracy in those [five-year] plans. These are all board-level decision companies have to take. Even the bidders have accountability, they can't just put up an arbitrary number. There are processes. So keeping it for five years works well," he explained further.
Apart from the INR 16,347 spent by Star India to close out the rights for broadcast and digital media, the BCCI had gained INR 2199 crore from Vivo for the IPL title sponsorship rights for 2018-22 and INR 1079 crore from Oppo for sponsoring the Indian cricket team's jersey.
Combined, the valuation from these three deals reads approximately INR 20,000 crore. The IPL deal is the most expensive one in world cricket at the moment, with each IPL game from 2018 onwards costing Star approximately INR 55 crore.