BCCI fearing the going down of revenues due to an e-auction

It is a known fact that the Board of Control for Cricket in India (BCCI) is the biggest powerhouse in the world of cricket. A huge part of the board’s earnings come from the revenues it collects from the broadcast rights. The officials believe that holding an e-auction for the IPL media rights can result in a significant fall of the revenues.

However, a lot of potential bidders will be rooting for an e auction to be held in order to grab the media rights (TV, mobile, internet) for the next 3 seasons of the Indian Premier league. But according to the BCCI, the current system of traditional sealed tender will be the most profitable for the board. There is a very demand for an e-auction this time which will decide the various media rights. August 24 has been decided as the last date for buying the IPL media rights tender document and the winner will be revealed on August 28.

The BCCI is apprehensive about the move because they believe that there will be no secrecy in an e-auction which was not the case with a sealed bid. As the bidding amounts will be open to all the bidders in an e-auction, the bidders will be able to draw out a clear idea of how much they should bid to grab the rights. The possibility of getting a higher bid for the board will also be removed. The BCCI has been handed two weeks time to explain their views and their stand for not agreeing with an e-auction.

BCCI official’s statement:

“Suppose there are 10 potential bidders for IPL TV rights The BCCI will have to set up a base price for the auction just like it happens in case of players’ auction. Let’s assume the base price for TV rights is Rs 100.”

“All the 10 potential bidders will be provided with the login and password. For each round of bidding, there will be a specific time-frame in which the companies will bid. After each round, the bid amounts will be revealed.”

“It means that the bidders will get an estimate of other quotes and that will possibly stop them from making his maximum bid,” a senior BCCI official told PTI.

Another reason for the BCCI to not allow an e-auction is that the concept of  ‘price discovery’ will not have any role if an e-auction is held.

The unpleasant situation of the board was explained by the official.

“Take the IPL title rights for example. Had it been e-auction, Oppo was bidding Rs 1430 crore and Vivo might have bid Rs 1500 crore at the maximum. The additional Rs 700 crore that BCCI earned was because of the current process of sealed bid,” he said.

“You can’t fault the big media houses favouring e-auction as that would mean less expenditure. But we have to look at BCCI’s interest and how we can maximise the revenue. We believe our current process has full transparency with our legal team and auditors monitoring the whole process,” the official said.