Lucknow and Ahmedabad home to two new IPL franchises
In what will be seen as a watershed moment in the business of cricket, two business houses – RP Sanjeev Goenka Group (RPSG) and CVC – have bid staggering sum of money running over a billion dollars to buy the two new IPL franchises.
On Monday, at a walk-in bidding event, RPSG paid INR 7000 crore to buy the Lucknow franchise while CVC, a private equity fund, bought the Ahmedabad franchise for INR 5200 crore.
“It is good be back in the IPL and I am delighted,” RPSG owner Sanjiv Goenka told ESPNcricinfo. “It is an initial step. We now have to build a good team and perform.”
The RPSG bid was 250% more than BCCI’s base price of INR 2000 crore ($270 million approx). The corresponding figure for CVC was 160%. In all, 22 companies had purchased the tender document, but only nine were eventually present at the walk-in bid event held in Dubai that lasted over six hours on Monday.
The bids, enclosed in a sealed envelope, were opened after a lengthy technical evaluation process. The entire process was overseen by the IPL Governing Council as well as the BCCI top brass lead by board president Sourav Ganguly, secretary Jay Shah, treasurer Arun Dhumal, vice-president Rajeev Shukla and joint-secretary Jayesh George.
Both the franchises will need to pay the entire amount over a 10-year period. To ensure that the owners have a solid foundation, the BCCI had put stringent norms in the bid document. A bidder needs to have a turnover of at least INR 3000 crore per year for a minimum of the last three years.
Measured in terms of net asset value (assets minus liability) this number was pegged at INR 2500 crore per year over the last three years. In the case of a consortium, the BCCI had put a cap on the number of investors totalling to not more than three.
Both Ahmedabad and Lucknow were part of the six cities shortlisted by the IPL in the bid document along with Cuttack, Dharamsala, Guwahati and Indore. Bidders were permitted to tick more than one city but would get the rights to own just one franchise. It isn’t known which others cities RPSG and CVC had put in bids for. Details could emerge when BCCI issues an official release.
A day after India’s crushing loss to Pakistan at the T20 World Cup, the buzz quickly shifted to the IPL franchise bidding; the topic becoming a top trend on Twitter in India.
Among the nine bidders to eventually put their hat in the ring were Lancer Capital, who own Manchester United football club; Ahmedabad-based Indian infrastructure biggie Adani Group, Aurobindo Pharma and Torrent Pharma along with the two winners.
This is the second stint for RPSG, who earlier ran the Pune-based Rising Pune Supergiant in 2016 and 2017, when Chennai Super Kings and Rajasthan Royals served a two-year suspension in the aftermath of the 2013 IPL corruption scandal.
A passionate sports lover, Goenka wore his emotions on the sleeve and even replaced MS Dhoni as the Supergiant captain ahead of the 2017 season, when they finished runners-up. RPSG, which calls itself a diversified business conglomerate, also has wider interests in sport.
They own the Atletico Mohun Bagan in the Indian Super League and have owned teams in table tennis and boxing previously. (ESPNCricinfo)