Challenges in conducting LPL

There is much excitement after the inaugural Lanka Premier League (LPL) tournament gained much momentum over the week following the player draft with the announcement of teams and then the release of the match schedule. 

Sri Lanka has been extremely slow in starting their own franchise based tournaments and several previous attempts fell by the wayside due to numerous hardships. This time around though, despite a pandemic wreaking havoc, much progress has been made and now it’s a matter of staging the competition. However, many are the challenges that the organizers need to overcome for the successful completion of the event. 

LPL schedule announced

Sri Lanka Cricket would give their fullest support in getting this event off the ground for a variety of reasons. Primarily, the board will earn a sum of US$ 2 million per year running into five years and the entire deal is worth US$ 10 million which is essential for the development of the game in the country. There is hardly any cost for the board as well and they only have to make their cricketing facilities available for the organizers. 

SLC obviously has outsourced the event to Dubai based Innovative Production Group. IPG’s CEO Anil Mohan is no stranger to Sri Lanka as he comes here frequently being part of the television production crew. 

So how does IPG make money to give away SLC a sum of US$ two million annually? IPG’s main source of income is through the sale of franchises. Initially, a franchise was given a price tag of US$ one million each. However, due to lack of demand, IPG had to come down on the price and it is hard to imagine that any franchise paid as much as US$ one million. It is said that some franchises paid US$ 500,000 and it is unlikely that any franchise was sold for more than US$ 700,000. 

So how do franchises raise this kind of money? Mind you, they also have got to pay the players and look after other logistics. 

Each franchise will get paid eight percent of the revenue the organizers get from the television deal. They also get eight percent each from the Central Sponsorship (event sponsors). Each franchise is also slotted to get 12% of the gate collection which at the moment is out of the equation due to health restrictions. Rest of the revenue they need to raise through sponsorships such as team sponsors, clothing sponsors and merchandise revenue. Other than that, they have further avenues to make revenue through team dugout branding, LED Perimeter Boards in the ground, 3D Grass signage and Big Screen advertisement opportunities. 

So, the major portion of the money has to come from television revenue and event sponsorship. If this is significant only the franchises will make a profit or break even. In order to attract big money from the television companies, it is essential that we bring down big name players. So far, the organizers have announced some attractive names but the hitch is that their efforts could be derailed due to a number of issues. 

All you need to know about the LPL Auction 2020

The most prominent of them all is quarantine. At the moment the health authorities have made it mandatory that individuals who arrive in the island from overseas need to do 14 days of quarantine. The tournament lasts for three weeks and top players will be wondering whether it is worth doing two weeks of quarantine for a 20 day tournament. Plus, they have already stayed too long away from families in Dubai taking part in the IPL. 

The other hitch is that a lot of international cricket will resume – particularly during the summer of the southern hemisphere – soon after the IPL. For example, Francois Du Plessis is slotted to play the LPL, but at the same time England will be touring South Africa for a bilateral series. It is unfathomable that Du Plessis will skip international commitment and play a franchise-based event. 

So once the big players are a no show, it becomes extremely difficult for the organizers to market the event lucratively. Television companies are unlikely to pay big money when big names are not on board. Lack of retired Indian players or second string active Indian players would be another reason why television companies are unlikely to pay big bucks. 

So all in all it is a tough ask for the organizers to make the event a reality and profitable. The general consensus is that for the first year except for SLC, the organizers or franchises will not make money. At least if they are able to break even, then there is a scope of being better prepared for next year, market the event properly and make money. 

But there is too much at stake for this year’s event. Although the schedule has been announced, the organizers are yet to sign a television deal or attract a main sponsor. There is also doubt that one franchise (Dambulla) is not yet sold. In that context, it is hard to imagine that the event will take off this year. 

However, all hope is not lost. Now that platform is in place, the event can be further delayed until we find a better time frame to host it. Either that is likely to happen or we might see a low key event. The effort, of Sri Lanka Cricket, however, needs to be commended.