Cricket News By TODAYLIVESCORE.INFO - Will the massive IPL team bids make business sense?. The IPL has proven to be one of the hottest sporting properties in the world
The IPL has proven to be one of the hottest sporting properties in the world
The Indian Premier League (IPL) is estimated to be a 7 billion dollar property. On Monday (October 25), it became pricier by close to two more billion dollars. By placing bids of Rs 7090 crore and Rs 5625 crore respectively, Sanjiv Goenka of the RPSG Group, who owned the Pune franchise ephemerally for two years, and CVC Capital, the American firm which ran Formula One races till recently, made the IPL one of the hottest sporting properties in the world.
From now on, the Board of Control for Cricket in India (BCCI) would be earning Rs 1200 crore a year for the next 10 years, the figure having been derived from the assessment that both Goenka and CVC would have to pay 10 percent of their total franchise fee – Rs 709 crore and Rs 560 crore – every year.
The staggering combined value of the two new franchises – Lucknow and Ahmedabad – defies the conservative evaluations of the IPL mathematics. Both the team owners could be in the red of at least Rs 350 crore and Rs 260 crore a year respectively, even if one were to presume that they would be in receipt of an estimated amount Rs 350 crore from the IPL central pool (media rights mainly).
So far, the teams are earning around Rs 200 crore from the central revenue and make about Rs 100 crore more from the gate collections, sponsorship and merchandising. Sanjeev Goenka, the owner of RPSG though was emphatic about the mathematics after his bid.
The bid from CVC Capital too seems to have exceeded all expectations. Only a couple of days ago, two parties had told Cricbuzz that they were looking for a partnership in the bidding process, including with the Adani Group, the surprise losers of the day. There are speculations too that this may eventually come together.
CVC Sports surprises all
CVC Sports were the surprise bidders, not known to the Indian sports market until recently. It placed the bid in the name of Irelia Company Pte Ltd.
CVC, however, is an experienced hand in the international sports business, having previously managed the high-profile Formula One races. It has also acquired stakes in European football too by investing in the highly competitive Spanish League (La Liga). It also runs rugby leagues in Europe and has invested in world volleyball too.
Long wait ends with high drama
At the Taj Dubai there was high drama on Monday evening, when the announcement was made. The auditors and legal officials of the BCCI took more than six hours to evaluate the technical bids of the nine participating parties who were made to undergo a long arduous wait. Only around 7 pm IST, were the nine bidders called inside the evaluation room by the BCCI officials, among whom were president Sourav Ganguly, secretary Jay Shah, treasurer Arun Singh Dhumal and IPL chairman Brijesh Patel were there.
In their presence, Shah started reading out the finance bids and the process lasted just over two minutes. The penultimate bid to be read out was Goenka's and it sparked off a slight commotion. Till that point, favorites Adani Group was well in course for a team. But the announcement of Rs 7090 crore stunned them all. They had placed similar bids for both Ahmedabad and Lucknow.
More drama was to follow as the BCCI officials told the representatives of the Goenka team to decide which city they would choose and they were given only five minutes to make the call. Phone calls were immediately made to Goenka, who was back home in Kolkata, and as they had previously decided, they preferred Lucknow, leaving CVC Sports with Ahmedabad, which was to be owned by the Adani Group.