MUMBAI: And so it came to pass. The storm in the tea cup blew over. CVC Capital, the successful bidder for the Ahmedabad franchise in the Indian Premier League, has reportedly already fulfilled its first financial commitment.
It has made a payment of Rs 75 cr to the Board of Control for Cricket in India (BCCI), as required by a franchise after its winning bid, and the global private equity firm has also signed the franchise agreement, cricbuzz reports.
As per the cricket website, CVC is now awaiting the signed papers from the BCCI, something even the Lucknow franchise owners, Sanjiv Gaoenka’s RPSG Group, is looking for. As per the agreement, the two new franchises have to pay 30% of their bid amount in the first week of January. CVC won the Ahmedabad franchise with a Rs 5625 cr bid, pipping “overwhelming favourite” Adani Group to the post as it were. Adani’s bid of Rs 5,100 cr turned out to be third in line after CVC and highest bidder RPSG Group, which won the Lucknow franchise after an astronomical bid of Rs 7,090 cr.
To cut to chase, on Tuesday, a day after private equity and investment advisory firm CVC Capital Partners was declared the owner of the Ahmedabad franchise of the Indian Premier League with a winning bid of Rs 5,625 cr, Chinese whispers started circulating.
First off the blocks was former IPL head honcho Lalit Modi who tweeted: “I guess betting companies can buy an IPL team. must be a new rule. apparently, one qualified bidder also owns a big betting company. what next? does BCCI not do their homework? what can Anti-corruption do in such a case? #cricket.”
Modi has been known to play fast and loose with his comments in the past as well, but calling CVC Capital, which has 107 portfolio companies under its umbrella and approximately $111 billion in secured commitments, a betting company is seriously stretching the envelope.
It is true though that CVC does have a betting operator in its portfolio, which is Tipico, Germany’s leading sports betting provider that has built up more than 50% market share in the German market.
CVC’s most high profile investment in the betting business however was in SkyBet. It had bought an 80% stake in the business from its then parent – U.K. satellite broadcaster Sky Plc – in 2015. Subsequently, in 2018 it cashed out, selling Sky Betting & Gaming at a massive profit to The Stars Group for $4.7 billion.
The BCCI is yet to make a public comment on the matter but a senior official told Outlook on Wednesday: “CVC Capital is a big private equity company and they are free to pick up stakes in a betting company because betting is legal abroad. Irelia Company Pte Ltd (through which CVC Capital bid) could be managing many funds but as long as they don’t have any managerial role or control, how does it matter? Betting is a matter of perception. It should not be confused with match-fixing.”
Seen from this perch, this “manufactured controversy” will ultimately prove little more than a storm in a tea cup. But IF CVC’s bid were to be deemed illegal after the fact, erstwhile ‘favourites’ Adani Group, which had bid Rs 5,100 cr for the Ahmedabad franchise, would be the immediate beneficiary. For the record, RPSG Group had the highest bid among all nine “candidates”, taking the Lucknow franchise by bidding a whopping Rs 7,090 cr.
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