Tuesday, June 18, 2013

Bailing out the bankrupt cricket board - a wise use of tea cess funds?

Sri Lanka Cricket is in deep financial trouble, having burned millions of dollars in stadia that lie unused.

The Tea Board will be a part sponsor of the team at a cost of Rs.530m. Dialog, the other sponsor, will pay some Rs.753m.

So far so good,

Only that the last time when Dilmah sponsored the team, they only paid $2m. Dilmah did not renew the sponsorship. Although no reasons were given it is reasonable to assume that the commercial return was insufficient to justify a larger sponsorship.

Now the Tea Board is paying twice what Dilmah paid, for a partial sponsorship. Does this really make commercial sense? The tea industry is already crippled by politically motivated wage hikes and unnecessary regulation, it is imperative that tea cess funds be used for the maximum possible benefit of the industry.

Does this looks like a thinly veiled bailout of the Cricket Board? To save a Government bail out and embarrassing questions as to how the body of the most lucrative sport went bust?

The finances of the Cricket Board are actually quite similar to that of the Government, its just that the latter still has the capacity to borrow.

Update: I was watching the cricket yesterday. Although I kept looking quite hard I could see neither the Tea Board nor Dialog anywhere. Someone said that since Reliance was sponsoring England the Dialog logo could not shown  and since Pepsi was also involved the Tea Board logo could not be displayed. Not sure if this is true but the team sponsorship does not seem to have brought any publicity to either sponsor, at least as far as the UK tour is concerned.

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