BCCI heading for bankruptcy?

BCCI heading for bankruptcy? - InsideSport

A potential liability of INR 6,150 crore against a cash reserve of INR 3,100-3,200 crore. Is the richest sports body in the country with more to pay for than the available reserves heading for a financial disaster.

The Board of Control for Cricket in India is in a legal mess that holds a potent threat to force the BCCI – notwithstanding its cash-rich and the richest sports body image – into a state of bankruptcy. The administrative mess is making the matter worst.

The BCCI is faced with a liabilities of up to INR 6,150 crore on various accounts and accusations. The threat of another significant addition to this huge amount looms large as an arbitration is pending between the BCCI and the terminated Indian Premier League franchisees Sahara Pune Warriors.

Incidentally, trapped in a cleansing act and tug of war between the Supreme Court appointed Committee of Administrators and the elected, now officiating, executive members, the BCCI is step by step also losing out the clout and vision that has made India (BCCI) the unofficial super power of world cricket.

“The reforms are welcome. But before the much-hyped cleansing acts, it is important to clean this legal, administrative and liability mess which is swelling by the day with legal costs and cumulative interests,” a senior BCCI source told insidesport.co.

BCCI, while enjoying the unprecedented cash flows, power and stronghold on the strength of IPL, is failing miserably in handling the financial mess created around the league. Of the INR 6,150 crore potential liabilities (interests not included), a minimum of INR 4,500 crore is pertaining to the IPL.

The BCCI will find it tough to escape the payments of INR 2,420 crore for the Directorate of Enforcement cases emerging from holding the 2009 edition of the IPL in South Africa. There is a legal liability of INR 1,250 crores, which also includes INR 800 (plus interest) compensation reward to the terminated Kerala IPL franchisee Kochi Tuskers.

The BCCI and the CoA are also in a legal mess over a sum in access of INR 800 crore, which is held in an escrow account under the jurisdiction of the Supreme Court in a long-drawn arbitration with the IPL partners World Sports Group. The board, sources say, is on a sticky wicket in the case. There are other unavoidable Income Tax, Service Tax, Sales Tax and Value added tax liabilities aggregating to around INR 1,250 crore pending.

The senior BCCI official also shares with the insidesport.co that “the Board does not have more than INR 3,200 crore cash reserve in its kitty to pay these looming debts”.

“Let us accept the fact that we have collectively failed to handle in an earnest manner when these monstrous issues were not so big on the onset,” says the source. “CoA lacks a comprehensive approach and 360° view on how a sports body can and should be run. You have already lost your position of strength in the world cricket. That will affect your earnings and add to your liabilities. The threat of a lawsuit from the Pakistan Cricket Board is one prime example.

“People are counting on big rights and sponsorship revenue deals from the IPL. What they are not taking into account is the increased liabilities. Franchisees from next year will not pay the license fee. Operational costs are on the rise. The profits are shared with the stakeholders.

“The CoA is erring in being unwisely benevolent. No one is against good payments and perks to the players. But it all has to be rational. The FTPs, the salaries, the perks, the charities are all subject to your revenue model and financial sheets. These decisions cannot be made in one off meeting. These all have long-lasting effects.

“The fact remains that the BCCI cannot bask in the glory of being the richest cricket body in the world. The vision that created this richness is lost. It’s high time we wake up to these challenges,” says the senior board administrator.

Are the powers that be concerned about this ticking time bomb. CoA is out to fix the people who happened to be the BCCI. And, those representing the elected members in officiating capacity are busy washing dirty linen in public. An official accuses an elected office bearer of “threatening to liquidate” at least on three occasions in the precincts of five-star hotels, at a coffee shop and in the lobby, the corridors of power in the power centre of Indian sports were never expected to stoop so low.

It is high time the house is put in order. The urgent matters are dealt with urgent approach and genuine intentions.