The International Cricket Council and the Board of Control For Cricket in India have exchanged terse e-mails in recent weeks on India's failure to secure tax exemptions for ICC events.
The Board of Control for Cricket in India finds itself in a dilemma of losing hosting rights of the 2021 T20 Men's World Cup. In a series of emails, the International Cricket Council has said it was within its right to withdraw the tournament from India because the BCCI had failed to secure a tax exemption for the tournament from the Indian government.
ICC's threat to BCCI comes at a time when chairman Sashank Manohar is reportedly serving the last couple of months as international cricket chief. Always a thorn in BCCI's flesh, ICC says it had lost 20-30 million dollars when India hosted the T20 World Cup in 2016 because the government didn't allow tax exemptions.
According to a report in ESPNCricinfo, BCCI has called ICC's threat an act of 'brinkmanship.' because according to the contract signed between ICC and broadcasters STAR India, there should be at least two ICC events in India in the eight-year cycle ending 2023. India is also scheduled to host the 2023 Men's 50-over World Cup. If there are no tax waivers, ICC could suffer a 100 million dollars loss.
India remains world cricket's biggest market. BCCI receives the largest share of ICC's revenue and any loss will impact the share given to other Test playing nations and associate members. ICC's largest portion of revenue comes from the sale of global broadcast rights. STAR reportedly paid a whopping 1.98 billion dollars (approximately 12,000 crores) for the rights till 2023.
For the 2021 World T20, ICC had sought an "unconditional confirmation" by May 18, 2020 on the tax exemption. But BCCI asked for an extension at least till June 30. The BCCI had invoked the force majeure clause (unforeseeable circumstances that prevent someone from fulfilling a contract) due to the coronavirus pandemic, but ICC was not interested.
On April 29, ICC's general counsel, Jonathan Hall, wrote to BCCI saying the ICC Business Corporation (IBC) had the right to terminate the agreement with "immediate effect" at any time. from May 18.
In the email, Hall wrote, "The BCCI has clearly had many years to arrange the tax solution… which is why the agreement asks for it to be provided ….no later than 18 (eighteen) months prior…. and why the BCCI was required to provide it by 31 December 2019. In such circumstances IBC is not prepared to agree to the requested extension to June 30, 2020 or 30 days after the lockdown is lifted whichever is later."
ICC also pointed out to BCCI that the original deadline for a solution was December 31, 2019. BCCI failed to meet that deadline. The deadline was extended to April 17 this year. On April 13, the BCCI told Hall that the deadline couldn't be met due to COVID-19 lockdown measures as the Indian government didn't classify sporting events as "essential services".
The lockdown began in India on March 24 and stage Four will end May 31.
The BCCI is itself in crisis. President Sourav Ganguly, secretary Jay Shah and the joint-secretary Jayesh George are all nearing the end of their short tenures as per the new constitution approved by the Supreme Court. Ganguly's name has also done the rounds as a successor to Manohar at ICC.
On Wednesday, ICC said, "The ICC and BCCI have been working in partnership to address the issue of tax exemptions for ICC events that is a requirement of the host agreement signed by all parties at the beginning of the cycle in 2015 and this work is ongoing."
"There are certain timelines within the agreements that we collectively work towards to ensure we can deliver successful world class events and continue to invest in the sport of cricket. In addition to this the ICC Board agreed clear timelines for the resolution of the tax issues which we are guided by."
In recent times, BCCI and ICC have seldom been on the same page. The Indian Board is also awaiting word on the fate of the ICC T20 World Cup scheduled in Australia in October-November. BCCI is looking for a window for its money-spinner called IPL that has been kept on hold due to the lockdown.