MUMBAI: Even as the BCCI has decided to push the date for final submission of bids to own two new franchises in the Indian Premier League (IPL) from October 17 to 25, the competition between potential investors to own these franchises has been narrowing down with each passing day.
The delay in the date of submission has to do with BCCI replying to the multiple queries they’ve received from potential bidders and industrystakeholders that may also involve clearing out certain legalities.
First, a bit about who’s bidding as of now. After weeks of speculation whether the Adani Group would come to the table, it can be said with a certain degree of surety that the company is crunching numbers to that effect.
“The Torrent Group in Ahmedabad is also looking to bid, but through power and not pharma. The RPG-Sanjeev Goenka Group is going to be a certain bidder. The other company that was very interested in bidding was Aurobindo Pharma. But they’re still working out some eligibility clauses that are part of queries BCCI is looking into,” those in the know of developments told TOIthis week.
The Aditya Birla Group and financial services company Kotak have shown interest but may not cross a certain spending threshold. Given that IPL happens to be India’s rare interest-free business – considering a winning bidder pays BCCI the sum of the franchise in 10 equal parts over 10 years – a lot of private equity players and investment funds should have taken interest. However, that hasn’t been the case.
The reasons for this lie in the bid document clauses. BCCI has asked that average turnover of the company bidding for a franchise should be at least Rs 3,000 cr or the average net-worth of each bidder at least Rs 2,500 crore. “Which is fine, but the problem is, BCCI also says should there be a consortium of three bidders, each bidder’s average net-worth should be Rs 2,500 crore as per the last three audited accounts. That’s where the issue arises,” sources say.
The cricket board has done this, it says, to avoid controversies like in the past when consortiums bid for franchises but bowed out of IPL quickly. However, potential bidders have written to BCCI seeking clarifications on this front. Outside of Ahmedabad, Lucknow is where the second franchise is most likely to be based out of and industry executives say, “it’s high time India’s proverbial heartland gets its own IPL team”.
“If 100 people watch TV in India, close to 75% watch it in Hindi and almost 22% of that 75% constitutes Uttar Pradesh alone. Now, if India accounts for more than 70% of global TV viewing then Uttar Pradesh can be seen as amongst the densest fanbases for cricket anywhere in the world,” say those tracking numbers.
With the sale of new media rights coming up later this year, and the IPL’s central revenue pool expected to shoot up by close to 80%, industry is pegging the value of each franchise at Rs 4,000 crore. “Two franchises put together could bring BCCI revenues in excess of a billion dollars,” say those in the know.
The delay in the date of submission has to do with BCCI replying to the multiple queries they’ve received from potential bidders and industrystakeholders that may also involve clearing out certain legalities.
First, a bit about who’s bidding as of now. After weeks of speculation whether the Adani Group would come to the table, it can be said with a certain degree of surety that the company is crunching numbers to that effect.
“The Torrent Group in Ahmedabad is also looking to bid, but through power and not pharma. The RPG-Sanjeev Goenka Group is going to be a certain bidder. The other company that was very interested in bidding was Aurobindo Pharma. But they’re still working out some eligibility clauses that are part of queries BCCI is looking into,” those in the know of developments told TOIthis week.
The Aditya Birla Group and financial services company Kotak have shown interest but may not cross a certain spending threshold. Given that IPL happens to be India’s rare interest-free business – considering a winning bidder pays BCCI the sum of the franchise in 10 equal parts over 10 years – a lot of private equity players and investment funds should have taken interest. However, that hasn’t been the case.
The reasons for this lie in the bid document clauses. BCCI has asked that average turnover of the company bidding for a franchise should be at least Rs 3,000 cr or the average net-worth of each bidder at least Rs 2,500 crore. “Which is fine, but the problem is, BCCI also says should there be a consortium of three bidders, each bidder’s average net-worth should be Rs 2,500 crore as per the last three audited accounts. That’s where the issue arises,” sources say.
The cricket board has done this, it says, to avoid controversies like in the past when consortiums bid for franchises but bowed out of IPL quickly. However, potential bidders have written to BCCI seeking clarifications on this front. Outside of Ahmedabad, Lucknow is where the second franchise is most likely to be based out of and industry executives say, “it’s high time India’s proverbial heartland gets its own IPL team”.
“If 100 people watch TV in India, close to 75% watch it in Hindi and almost 22% of that 75% constitutes Uttar Pradesh alone. Now, if India accounts for more than 70% of global TV viewing then Uttar Pradesh can be seen as amongst the densest fanbases for cricket anywhere in the world,” say those tracking numbers.
With the sale of new media rights coming up later this year, and the IPL’s central revenue pool expected to shoot up by close to 80%, industry is pegging the value of each franchise at Rs 4,000 crore. “Two franchises put together could bring BCCI revenues in excess of a billion dollars,” say those in the know.
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