DUBAI: And the winners are – Irelia Company Pte Ltd. (CVC Capital Partners) takes Ahmedabad, while Lucknow goes to RPSG Ventures Ltd.
And the price committed? CVC Capital has committed Rs 5,625 crores ($750m), while RPSG has won Lucknow with a mind-boggling bid of Rs 7,090 crores ($945m).
In all, there were nine entities at the IPL bidders “high table”. The other seven were: the Glazer family (owners of Premier League club Manchester United), the Adani Group, Torrent Pharmaceuticals, Hindustan Media Ventures Pvt Ltd, Amrut Distilleries, Capri Global and AllCargo Logistics.
The bidding was for the right to own an IPL team at one of the six cities — Ahmedabad, Lucknow, Indore, Dharamsala, Guwahati and Cuttack.
Now that the cat is finally out of the bag as it were, a tweet put out by industrialist Harsh Goenka (@hvgoenka), some hours ahead of the announcement is worth a recall.
Goenka had tweeted:
“Why I’m not bidding for a new IPL team:
1. At expected winning price of Rs 3500-4000 cr return is poor
2. Consumer catchment lower on remaining cities
3. Too much of my personal time will be spent
4. Additional matches may lead to TRP fatigue
5. I don’t have the money!!!”
We will stay with point 1. If Harsh felt that at Rs 4000 cr “return is poor” what on earth would he have to say about his brother Sanjiv Goenka bidding Rs 7090 cr for the Lucknow franchise.
We also refer to a Cricbuzz article that stated any bid of 3500 cr and over would entail a loss of approximately Rs 250 cr a year, at least for the initial five years.
Now the bids. SportzPower believes that CVC Capital is banking on the IPL media rights (which is coming up for bidding next) going for an astronomical Rs 40,000 cr or north of that. Additionally, as an industry insider who was actually building a business plan for a consortium that was considering bidding for a team had told this website, at Rs 5000 cr and above, this is NOT a Discounted Cash Flow (DCF) deal proposition but a Return on Equity (ROE) investment plan. Ergo it perforce HAS to have stock market play at some point.
And what of Goenka’s Rs 7090 cr bid? This is a trophy buy pure and simple is the considered opinion of this website. Goenka wanted to give himself as close to a 100% guarantee as possible that he would come out of this bidding process as the owner of an IPL team. And he essentially gave himself a Rs 1,000 cr buffer to rule out ANY chance of a higher bid coming into play. And so it turned out.
Additionally, it is also worth noting that as per information available with SportzPower, of the remaining seven bidders, only one of them had put in a Rs 5,000+ cr bid, which was Gautam Adani at Rs 5,100 cr.
As for the Rs 10,000 cr number that was doing the rounds through Monday, that was akin to someone playing Monopoly and throwing around the most outrageous number that could possibly come into play, is this website’s firm contention. We would be happy to be proved wrong!
Official release in full:
The Governing Council of the IPL had issued an Invitation to Tender (“ITT”) to acquire the right to own and operate 2 (two) new franchises. Pursuant to the tender process, various interested parties submitted their bids for the new franchises. The bids were submitted by the authorised representatives of the interested parties at Dubai today.
BCCI is pleased to announce the following successful bidders (subject to definitive documentation and other formalities being completed):
1. RPSG Ventures Ltd. – Lucknow (for INR 7090 crores)
2. Irelia Company Pte Ltd. (CVC Capital Partners) – Ahmedabad (for INR 5625 crores)
The new franchises will participate in IPL from 2022 season onwards subject to the bidders completing the post-bid formalities as specified in the ITT document. The IPL 2022 season will comprise ten teams and will have 74 matches, wherein each team will play 7 home and 7 away matches.
BCCI President, Mr Sourav Ganguly said: The BCCI is happy to welcome two new teams from the next season of the Indian Premier League. I would like to congratulate RPSG Ventures Ltd. & Irelia Company Pte Ltd for being the successful bidders. The IPL will now go to two new cities in India viz in Lucknow and Ahmedabad. It is heartening to see the inclusion of two new teams at such a high valuation, and it reiterates the cricketing and financial strength of our cricket ecosystem. True to IPL’s motto of ‘Where Talent Meets Opportunity’, the inclusion of two new teams will bring more domestic cricketers from our country to the global stage. The ITT process included two interested bidders from outside of India, which strongly emphasises the global appeal of the IPL as a sports property. The IPL is proving to be a wonderful instrument in globalising the game of cricket. I am keenly looking forward to IPL 2022.
Mr Jay Shah, Honorary Secretary, BCCI said: It is a momentous day for all of us and I formally welcome RPSG Ventures Ltd. and Irelia Company Pte Ltd. into the IPL fold. We had promised that IPL will be bigger and better from the 15th season and with Lucknow and Ahmedabad, we will take the league to different parts of India. The IPL has established gold standards for leagues across the world and remains a premium event on the sporting calendar as it has grown rapidly in a short span. Despite numerous challenges posed by COVID-19, the 13th and 14th seasons were completed, and the bids prove that interested parties have faith in BCCI and its hosting capabilities. I am thrilled for the people of Uttar Pradesh and Gujarat as the long wait is over and they will now have their own IPL team. My best wishes to the two new teams.
Mr Brijesh Patel, Chairman, IPL said: The level of interest among the interested parties prove that IPL is among the most sought-after sporting leagues in the world. We had bids from different parts of the world and from parties with diverse portfolios wanting to make a foray into the world of sports. I extend my heartiest congratulations to RPSG Ventures Ltd. and Irelia Company Pte Ltd. for securing the rights to operate the two teams. We had a wonderful 14th season and the 2022 season will see a new beginning.
Mr Arun Singh Dhumal, Honorary Treasurer, BCCI said: The fact that winning bids were way above the base price set for the two new IPL franchises is a direct indication of the true value of the Indian Premier League. We received tremendous interest after the ITT was floated with many conglomerates putting their hat into the ring. I congratulate RPSG Ventures Ltd. and Irelia Company Pte Ltd. for placing the highest bids and winning the rights to own the IPL teams. I also thank all the bidders for showing faith in the BCCI and IPL. This is the start of an exciting chapter, and I can’t wait for the big auction to see how the new teams shape up.
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