Skewed numbers

India's early exit from the World Cup did more than hurt the hopes, aspirations, and prickly egos of its few hundred million cricket fans. It brought the BCCI face to face with a crisis - or at least a "big correction", to use a sports channel executive's phrase - in the economy spawned by the subcontinent's number one spectator sport. Confusion is the best form of defence. As such, as a senior official admitted, the board's recent "crackdown" on top players and the limits it imposed on endorsements were not only populist but also served another purpose. "It was a diversionary move," confessed the official. "We had to take away attention from the fact that big television deals were falling apart."

True, some of this was already happening even before the World Cup. India's defeat, and the real and notional commercial losses that entailed, accelerated the process. The cricket market is suddenly seen as overpriced and overheated. The offer by Subhash Chandra, media baron and chairman of Zee Telefilms, to run an alternative Indian Cricket League (ICL) has threatened to change the state of play. Near simultaneously, and for related but not always identical reasons, three sets of television deals are in trouble:

One, the ICC's package deal for its premium properties, the World Cup and the Champions Trophy, the India rights for which were bought by Sony till 2007 and ESPN-Star Sports for subsequent tournaments in the 2007-15 period. Two, the BCCI deal covering all cricket played in India, signed with Nimbus. And three, the BCCI's agreement with Zee Telefilms for cricket matches in "offshore" markets overseas.

The ICC: wary eye on the future
Despite the long-drawn, tiresome format, and notwithstanding India's early exit, it is not the skewed economics of the 2007 World Cup that worries the ICC, but the possible impact on future ones. "For this World Cup," says a cricket industry insider, "the sponsorship and television deals were signed. The channels had contracted the bulk of the advertising. The only loss was in terms of corporate hospitality and travel that would have taken place if, for instance, India had reached the semi-final."

That's not how ESPN-Star Sports, which has paid $1.1 billion for the rights to the 2011 and 2015 World Cups, three Champions Trophies, and two Twenty20 world championships, all to be played in the 2007-15 period, sees it. It is worried. So is the ICC, which hopes to generate, through additional sale of sponsorship rights, another half a billion dollars at least.

The bulk of the money is, of course, expected to come from India, the 800-pound gorilla without which cricket would be a small international sport, run by Australian commerce and comparable to badminton. For the 2003 and 2007 World Cups, companies like LG, Pepsi, and Hero Honda bought sponsorship rights to attract customers and win eyeballs in, almost exclusively, India. That seemed a clever move when India reached the final in 2003. In 2007 the investments turned to duds. Hero Honda motorcycles are not going to be bought or sold in Ireland and Trinidad because the company is sponsoring the World Cup. The Indian viewer, on the other hand, has switched off.

"It was a big setback, for the sponsors and for companies like Pepsi that had prepared expensive World Cup-specific campaigns," said one sports marketing executive. "India was expected to reach the Super Eight stage, and even if it lost there, play six matches. Those six matches just got wiped out."

When the sponsorship bids for the 2011 and 2015 World Cups - and it's usually an "all or nothing" offer - are invited, will Indian corporate houses take the gamble? Alternatively, will they collectively save their half a billion dollars and sign on Hrithik Roshan and Abhishek Bachchan as brand ambassadors for a fraction of the cost? It is a question that must have Malcolm Speed biting his nails.

The BCCI: double jeopardy
In 2006 the BCCI signed a four-year deal with Harish Thawani's Nimbus, under which the company would produce the audiovisual feed for, telecast, and market all cricket played in India for the next four years. The agreement guaranteed the board $612 million and was roundly applauded as a blockbuster.

Rather than further sell the telecasts to a television network, Nimbus set up two television channels of its own and became both producer and broadcaster. Based on the projections it made, Nimbus attracted private equity investments from abroad amounting to, it is believed, Rs 550 crore. It had in its control one of the world's most lucrative sports properties - cricket played in India - and was operating in a booming economy growing at nine per cent, where the media and entertainment sectors were on a roll. Investors bought the hype.

In recent days, two things have happened. One, the Indian courts have legislated that Nimbus - or any other cricket rights-holder for any matches featuring India or of interest to Indian fans - will have to share feed with Doordarshan, the national broadcaster. This is expected to bring down revenues of the right-holders in question, according to one sportscaster's calculations "by at least 33 per cent, maybe more, depending on the tournament or series, and across ad sales and subscription revenues". This has transformed the market; it has obviously hit Nimbus, and has had its investors raising eyebrows. In the short term, the sustainability of the second channel on the Neo platform is up for speculation.

Two, with a clutch of top players set to retire in the next season or so, Indian cricket is moving into a rebuilding phase, waiting for the next great stars, the next big endorsement brands, the next icons. In the interim, interest in the game could sober down somewhat. This will also hit television revenues.

The Nimbus deal is not the BCCI's only nightmare. Also falling apart is the $220-million, five-year deal signed with Zee Telefilms for the BCCI Overseas Media Rights. This guaranteed a minimum of 25 one-day internationals to be played by India, and organised by the BCCI, in territories outside India. Obviously the matches can't be played in Australia or England - where the local cricket boards have their own television deals and jurisdictions. So the BCCI picked "offshore" venues like Malaysia and Abu Dhabi. This summer, South Africa and India will play three ODIs in Ireland.

Zee sources indicate they are all but done with this deal and are looking to exercise an exit clause. The India-Australia-West Indies DLF Cup played in Malaysia in 2006 was a damp squib - literally; it was interrupted by rain - and a financial disaster. It is understood that of the roughly $9 million Zee paid per game, it recovered about a quarter.

Both the Zee and the Nimbus deals were part of the aggressive new negotiation skills brought to the BCCI by Lalit Modi, the board's vice-president and BCCI chief Sharad Pawar's brains trust. "At the BCCI today," says a cricket official, in an understated sort of way, "Lalit is a bit of a lonely man."

Zee's Chandra and Kapil at an ICL press conference - a format that may provide more value for sponsors © AFP/Getty Images

Zee makes its move
After the Indian team's World Cup fiasco, popular opinion swung against the players and the BCCI. The senior members of the India squad were seen as overpaid underperformers, obsessed with advertisement contracts of the sort that had made even a relative newcomer like Mahendra Singh Dhoni rich enough for a few generations. The board was blamed, as usual, for lack of professionalism, poor quality of domestic competition, lack of fast pitches, and all the other old chestnuts.

Zee's Chandra took advantage of this despondency to announce the ICL, hoping to win support from enthusiasts fed up of the BCCI. He also offered a new format, one with a lower entry cost and providing more value for money to sponsors.

The ICL, as Chandra described it, would be a six-team league. Each of the playing XIs would represent a geographical region or city, with sponsorship tie-ups, suitable branding, and the necessary razzmatazz. Foreign professionals would be invited to play, opening up the possibility of, for instance, Kevin Pietersen coming down to India in the winter, for a fat fee, and batting alongside Yuvraj Singh.

Chandra has long wanted a hot cricket property, having unsuccessfully bid for the BCCI's flagship rights for years. In 2006 he acquired the BCCI overseas rights, but discovered soon enough that he'd been sold a dummy. He has a successful television network and the only thing he lacks - as opposed to the Star or Sony bouquets - is compelling sports programming. He has the hardware, as it were, with the business alliance between Zee Sports and Ten Sports expected to get only stronger, but no software, no content.

To understand the ICL, it would be appropriate to look overseas for an analogy. Indian cricket is a bit like English football. It has a passionate fan following, and attracts huge media coverage and endorsement deals. Yet the national team is not quite a world beater. No one would bet on England winning the FIFA World Cup. David Beckham is football's Sachin Tendulkar, a supremely talented player and national superhero - but, frankly, not up there with the greatest match-winners of all time. He's not Pele, just as Tendulkar is no Viv Richards. The big trophies are missing from their cupboards.

Even so, since England loves football and there's a lot of money riding on it, it needs a format where English teams - as opposed to the England team - and English players do well. This is what makes the English Premier League perhaps the richest domestic league of its type. Chandra's ICL wants to follow the exact formula. It will feature clubs/teams with an Indian branding and local players. Sponsors will be able to buy in cheap, at a fraction of the hundreds of millions of dollars the ICC wants for its World Cup. These sponsors will be guaranteed six competitive, evenly-matched teams, unlike the BCCI rights-holders, who could end up with an India-Australia ODI series one month and an India-Zimbabwe Test series the next.

Chandra has put his money where his idea is. He has offered to bankroll the ICL with $100 million. It is almost certain that he will renege on the BCCI's overseas rights deal, invest in a cheaper product that he can control, and still save $100 million.

The third way
Can the ICL work? Whether or not Chandra pulls it off, the fact is, he's got a good plan. India's cricket economy is ready for a new format positioned between conventional domestic and international cricket. In a sense, the Professional Hockey League (PHL) is a model. Promoted by ESPN-Star Sports, PHL is now three years old and is expected to start making money by year five. A cricket league could do it much faster.

Only one question remains: why can't the BCCI out-Chandra Chandra? Why can't it revamp domestic cricket - maybe create a Ranji Trophy premiership league where Reliance Mumbai Maniacs, led by Tendulkar and featuring Adam Gilchrist and Makhaya Ntini as overseas professionals, takes on Kingfisher Bangalore Bozos, captained by Rahul Dravid and including Andrew Flintoff and Younis Khan? It could be the golden chance for Harish Thawani to save the Neo network and rejuvenate his domestic cricket deal.

Unfortunately, old hands in the industry are confident, the BCCI will be too slow to act. "The board is very good with raising money," goes one cynical voice, "but very unimaginative at spending it." Nevertheless the ICL is an idea awaiting execution, whether by Chandra or somebody else. When Surf prices itself out of the market, it creates space for Nirma. Indian cricket is ready for its share of froth.