SO, King Khan, Shahrukh Khan has finally had enough of IPL. And more importantly, he cannot make promises anymore because he has lost the moral right. Enough of Kolkata Knight Riders after three consecutive seasons of unmitigated disastrous performances. SRK feels awful for Kolkata and his sponsors. Remember that Nokia forked out the highest amount as lead sponsor of KKR, in excess of Rs 450 million for three years. Brand SRK can sell everything and anything. After all he is known as Khan Market, a tony high street destination in south Delhi. But managing KKR has been a lesson for him. Maybe that is why he is acutely hassled, after all running a sporting franchise requires management bandwidth. Red Chillies can do without this headache for the time being is his present state of mind and thinking.
As season three comes to an end, get ready for a shakeout in IPL. Notwithstanding the current controversy surrounding the Kochi franchise, several promoters of the existing franchises may be looking to partly or wholly exit from their investment. AsSportzPower has reported in the recent past, Kings XI Punjab’s sale has more or less been finalised for $ 300 million to an undisclosed buyer. Confidentiality agreement, you know. Mohit Burman, co owner of the franchise has clearly indicated toSportzPower that the suitor is neither Videocon or Pawan Munjal of Hero Honda.
Similarly, a big north Indian newspaper magnate may be contemplating a jump into IPL mania, with an acquisition of a north Indian based franchise. The newspaper magnate is believed to be part of a consortium which may well include a two wheeler automobile major as well. The two wheeler major is already lead sponsor for Delhi Daredevils, just as it is one of the principal sponsors for the IPL itself. Indications are that GMR Sports, owner of DD may well exit in part or full to this consortium if the price is right. Given that the three year lock in period ends with the culmination of season three, promoters of franchises can sell more than 51 per cent beginning 26 April.
SRK’s dalliance with cricket has been a big joke, more so in season two when KKR was the butt of all the jokes. Between JB – coach John Buchanan, eleven captains, FakeIPLplayer’s blogging and Brendon McCullum’s bizarre captaincy, KKR the truly the object of ridicule. Controversies have continued to dog it right through, just as they have shadowed Kings XI Punjab off and on the field.
Two bidders who were beaten at the door in the fresh two team auction – Videocon and Gautam Adani – are believed to be still in the hunt for a franchise. Sources close to developments have revealed that Venugopal Dhoot may well be in a dialogue with SRK for KKR while Lalit Modi is reportedly pushing for Adani and Ahmedabad instead of Rendezvous and Kochi. SRK is already brand ambassador for Videocon for some time now. The key is the price. Kings XI Punjab for instance is seeking a 4x valuation, SRK may also get something similar for KKR. The timing is certainly right for a disconsolate SRK, though the price may be a consideration for Dhoot.
What the two team auction has managed to do is raise the valuation bar considerably for all the eight existing franchise owners. Valuation range between 3.4x for a Mumbai Indians and Bangalore Royal Challengers to as much as 6x for Rajasthan Royals. remember that the new threshold limit is between $ 333.33 million paid by the mystery men and women for Rendezvous and $ 370 million by Subroto Roy Sahara. Teams which have not done well and are in a bit of spot due to poor performance parameters are at the vanguard of this exit strategy.
The window of opportunity is however limited because sometime in late September after the Airtel Champions League (in South Africa?), the fresh player auction is slated to take place for all ten teams. All stake or outright sales will thus have to be completed between 26 April and much before late September-early October. New owners or co promoters will have to get a hang of the business and take a call on the auctions.
First the IPL governing council meeting on 23-24 April will have to decide on the course of action for Rendezvous and then on how many players can be retained by the franchisees before the new auction. Sahara for example is extremely concerned about this. It wants all players to go under the hammer so that choice is not limited and the $ 7 million cap can be used judiciously. Glam quotient and cricket may well sell but in SRK and Priety Zinta’s case, the marriage has certainly not been made in heaven. SRK used as enormous brand equity with sponsors to make KKR the most financially viable franchise despite performing below par on the field. Sachin Tendulkar has single handedly focused on winning IPL 3.0 and his personal brand salience has pulled the team out of its two season morass. MI has in turn pulled in sponsors as well. KKR and SRK despite being led inspirationally by Saurav Ganguly off and on this season have failed to deliver the kayo punch consistently.
IPL and Lalit Modi’s problems have only begun. On Wednesday as I write this, MEA has hit back at Modi saying that he tried to stop a visa being issued to SA model Gabriella who claims she is Modi’s friend. This tit for tat counter punching will continue till the PM returns from the US when a call will be taken on Tharoor. Issues of propriety have been raised and Tharoor’s personal relationship with memsahib Sunanda Pushkar named as one of the beneficiaries in Rendezvous and her middle east connection are sure to trip the urbane minister who has been under a cloud ever since UPA 2 was formed.
Many have reckoned that the IPL bubble will burst, anyway for now it seems to be coming apart at the seams. The Modi-Tharoor spat is a manifestation of the opacity that exists in IPL where no financial details have been forthcoming. Transparency remains the single biggest issue. If the BCCI is a private cosy club, Indian Pariwar League is an even more secretive society. Tharoor ka suroor is busy tripping it right now.
