The BCCI brought out the tender document inviting bids for two new franchises in the Indian Premier League (IPL). This Invitation-To-Tender (ITT) is available for a price of Rs10,00,000 until October 5, following which the cricket board will announce the winners by around mid-October, to coincide with the final week of IPL-Phase 2 in the UAE.
The ITT does not ask for a separate technical bid and the base price for bidding has been reserved at around £170 million – the value at which BCCI last sold its costliest franchise to Sahara Warriors. Any individual, company or consortium looking to submit a bid must show a net valuation of their business at around £300 million, which is a mandatory requirement. Further, a potential bidder can write to the BCCI requesting clarifications in the ITT – one that will be reverted to over the next month until the submission of bids.
Pharma companies like the Torrent Group in Gujarat and Aurobindo based out of Hyderabad; retail and industrial services companies like the RPG Sanjiv Goenka Group; investment bankers and private equity players who hob-nob between Dalal Street and the Wall Street; and potential consortiums of lesser-known businessmen are eyeing the space right now.
“Pharma is a loaded sector. Someone like Sanjiv Goenka has wanted a franchise forever now. We recently saw the Rajasthan Royal deal with Redbird Capital, a US-based private investment firm. Then there are aspiring businessmen who strongly believe IPL is their ticket to get into a room where the likes of Mukesh Ambani and Shah Rukh Khan delve in. So, when an IPL franchise is up for sale, there’s bound to be a great amount of interest always,” say those tracking developments.
A number of cities are in the fray, but Ahmedabad and Lucknow remain favourites. Ahmedabad because the city now boasts of a brand new 110,000 capacity stadium – the largest in the world and given the fascination that the Gujarati community has for the game.
Lucknow is the other favourite because the so-called ‘Hindi heartland’ – Uttar Pradesh, Bihar, Madhya Pradesh & around – account for close to 75% of cricket’s consumption on television and OTT. “And UP alone accounts for close to 30% of that 75% space. So, the following is huge and the ‘heartland’ does not have its own franchise. So, there are those who see great potential in it,” add sources.
The two new franchises will be brought on board through a revenue-sharing formula of 50:50, like has been the case for the existing eight franchises in the IPL since 2018. That means, 50% of the central revenue share will continue to be held by the BCCI while the remaining 50% will be shared among the10 franchises (including the two new ones).
“That means, the two new franchises will continue to earn the same money as the other eight. In 2008, when the original eight franchises had first come on board, the revenue sharing formula between the franchises and the BCCI during the first ten years stood at 80:20 for first two years (in favour of franchises), 70:30 for year three & four and 60:40 for the remaining six years before settling down at 50:50,” says an industry executive. The BCCI, it is understood, has kept the revenue sharing at 50:50 to avoid complications.