Uncertainty looms large on IPL 2025 amid escalating India-Pak tensions

The suspension of the marquee Indian Premier League, a property valued at $12 billion, in the wake of the India-Pakistan standoff, will have serious financial implications should it be cancelled. The tournament that kicked off on March 22 saw the last match played between Punjab Kings and Delhi Capitals in Dharmsala on May 8 being abandoned halfway into the first innings after a technical failure. The decision to suspend the tournament was taken a day after that.

The concern is around the large monies at stake. Franchise owners (there are ten in all), broadcasters, advertisers and the Board of Control for Cricket in India (BCCI) could be placed precariously if IPL 2025 is called off. Just the outgo for JioStar, the broadcaster holding the television and digital rights for the 2023-2027 period, was Rs 48,390 crore. Given cricket’s mass following in India, the IPL remains one of the most expensive properties to advertise on – estimated to be around Rs 18 lakh for a 10-second spot on standard definition and high definition channels.

“To the BCCI, JioStar and the franchises much of the financial downside will get covered by force majeure (an unforeseen event beyond the control of the state) clauses in the insurance covers,” says Sandeep Goyal, Chairman of ad agency Rediffusion. Those who have put in the money, informally, speak of the potential scenario where the tournament is cancelled. It is broadly estimated that each match will leave a hole of at least Rs 100 crore, through a combination of advertising and sponsorship plus ticket sales. The eventual loss will depend on the kind of insurance package that is chosen.

Given the kind of money spent on advertising, addressing that is critical. “Advertising deals with brands will most likely get pro-rated and squared off. These spends will migrate mostly to news as a genre,” thinks Goyal. While maintaining that the financial impact should be “fairly minimal”, his view is that if hostilities cease, most spends will get reinstated. Most advertisers are in wait-and-watch mode.” In 2009, the IPL, a year after the first edition, was moved to South Africa because of the general elections.

The insurance part is key in determining the actual loss. According to Aatur Thakur, IPL co-founder and director, Alliance Insurance Brokers, the entity involved in insuring the IPL, says there are four interested parties – organisers, broadcasters, the 10 franchises and sponsors – in the matrix.

There are three layers from an insurance perspective here. The first covers all risks including bad weather, utilities like electricity failing, a match disrupted because of an agitation among things. The next layer encompasses that plus political environment and terrorism, while the last part includes war. “Each client needs to take a decision on what is best suited for him. There is no loss incurred so far since it is still a suspension,” he says.