BPL may not be a high profit-making venture

Admin Mon Jan 16, 2012 4:49 am

Lack of skill and limited knowledge about franchise-based professionally run leagues is likely to upset Bangladesh Cricket Board’s (BCB’s) plans to make huge profits from the Bangladesh Premier League (BPL). The Indian Premier League (IPL), for the first time, showed the cricket world how to mingle cricket and business and also fetch a lucrative amount of revenue.
Bangladesh, due to relative inexperience, handed over the responsibility for running the BPL to Game On Sports Management (GOSM), an Indian event management company. The company won the rights through formal tendering for a staggering sum of Tk. 350 crore for six years.
Interestingly, all the six companies that took part in the tender process were Indian companies and no local company participated in it.
Contrary to direct handling of the IPL by the Board of Control for Cricket in India (BCCI), BCB’s franchise-based league relies completely on GOSM for success.
The Indian company earned $6.5 million from the team auctions where the floor price was set at $ 1 million for every team. It will earn money from title sponsorships for all teams and the profits from ticket sales will also go to its pocket.
As per the agreement, GOSM has already provided the bank guarantee, worth Tk. 70 crore, and it would provide the profit for the first year as well.
The company has borrowed Tk. 1.50 crore from BCB even before the start of the tournaments, said highly placed sources.
When asked, GOSM director Anjan Ganguly admitted: “We had to borrow [money] from BCB for opening an account in this country. It’s no big deal. We’ve already paid back the money,” he said.
A BCB source, however, told The Independent that the Indian company was yet to pay back the money to BCB.
Incidentally, BCB saw a vertical split in its organisation over the BPL issue and this came to light when one faction opposed tooth and nail lending money to GOSM. And the former CEO of BCB, Manjur Ahmed, had a harrowing time on the loan issue.
The BPL chalked out the agreement so as to avoid future scuffles with GOSM, something BCB had experienced in its pact with Nimbus Sports International for worldwide marketing agency.
Some loopholes in the agreement between BCB and Nimbus, such as the absence of the guarantee money clause, still pains BCB as it is yet to get about Tk. 100 crore back from Nimbus.
The BPL governing body chairman, Gazi Ashraf Hossain Lipu, claimed that they were careful while striking the deal with GOSM.
“When we made the agreement with them, we tried to ensure that no loopholes were left in it. We also ensured that they paid Tk. 70 crore as guarantee money for two years, which they have obliged. They will have to pay guarantee money for the next two years once we have completed two seasons of the tournament,” Lipu said.
Lipu, however, acknowledged that they tried to remain in a safe zone insofar as making profits from the games is concerned, as they are not experienced enough to organise such a big tournament.
“We want to be sure that we make no losses in the tournament. It’s the first time that we will be holding such a big event. We are a bit apprehensive about it, but the way it is going, we think everything will be alright,” he said.
The bidding went off smoothly as the franchisees had reportedly reached an understanding among themselves to make it a success. Sources said the names of all the six companies names had been finalised even before they bid for the teams.
Lipu vehemently denied the fact and said: “As I can see, there were no such irregularities.”
The BPL governing body has requested all teams to include anti-corruption and security personnel. Sources said BCB was wary of betting and match-fixing during the tournament– something it had experienced in the BPL team auction drama.
Lipu said the BCB would increase the number of teams from next year.
“In the first year of the tournament, we’ll just wait and see the results. Moreover, we’ll evaluate the activities of Game On Sports Management after three years,” he added.
He further said that in the first year of the tournament, GOSM would pass on 40 per cent its profits to the franchisees. In addition, it will bear the expenses of putting up players and umpires in top class hotels. It will also provide 20 per cent of match tickets of different categories to BPL.
Earlier, BCB had organised NCL Twenty20 and earned a net profit of Tk. 1.50 crore, said Lipu.
He claimed that since then had been a lot of pressure from stakeholders, including the government, for organising a global Twenty20 tournament in Bangladesh.
“Although we invited local corporate houses, they did not participate in the tender process. Probably, they were apprehensive about the tournament’s success,” he said.
“During the BPL team auction, we were worried whether local companies would be interested in buying teams. But the teams got sold. Hopefully, some of our biggest corporate houses will buy franchises from next year,” he added.