Lucknow and Ahmedabad become home to the two newest IPL franchises

In what will be seen as a watershed moment in the business of cricket, two corporate giants - RP Sanjiv Goenka Group (RPSG) and CVC Capital Partners (Irelia Company Pte Ltd) - have bid a staggering sum of money, running over USD 1.6 billion, to buy the two new IPL franchises.

On Monday, at a walk-in bidding event in Dubai, RPSG paid INR 7090 crore (USD 940 million approx) to buy the Lucknow franchise while CVC, a private equity fund, bought the Ahmedabad franchise for INR 5625 crore (USD 750 million approx).

The RPSG bid was about 250% more than BCCI's base price of INR 2000 crore (US$270million approx). The corresponding figure for CVC was over 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 led by board president Sourav Ganguly, secretary Jay Shah, treasurer Arun Dhumal, vice-president Rajeev Shukla and joint-secretary Jayesh George.

In a BCCI media release on Monday Ganguly said it was "heartening" to see two new teams being added to the IPL roster "at such a high valuation, and it reiterates the cricketing and financial strength of our cricket ecosystem". Brijesh Patel, the IPL Governing Council chairman said the IPL was "globalizing" cricket and its importance as being one of the "most sought-after" leagues in sport was established through the bids from "different parts of the world and from parties with diverse portfolios".

The new franchises will need to pay out 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 needed 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 totaling to not more than three.

Apart from Ahmedabad and Lucknow, the cities shortlisted by the IPL in the bid document were Cuttack, Dharamsala, Guwahati and Indore. Bidders were permitted to pick more than one city but would get the rights to own just one franchise.

Along with Lucknow, RPSG also put in bids for Ahmedabad and Indore. While it put the same price (INR 7090 crore) for Lucknow and Ahmedabad, it bid INR 4790 crore for Indore.

CVC picked Ahmedabad and Lucknow and its bid for the latter was INR 5166 crore. Significantly, the minimum bid price raised by all nine bidders was over INR 4000 crore.

It is understood that the BCCI wanted to allot the winner for each city keeping in mind the highest possible bid combination and hence RPSG got Lucknow and CVC Ahmedabad. If RPSG were allotted Ahmedabad, then the BCCI would have lost over INR 400 crore on Lucknow. In contrast, in 2008 when the IPL started, the BCCI had allowed the bidders to pick their city of choice.

The winners aside, among the 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, Torrent Pharma, Kotak Group, All Cargo Logistics, Capri Global, and Hindustan Media Ventures Limited.

The Adani Group was the third-highest bidder among the final nine, listing the same bid price - INR 5100 crore - for both Ahmedabad and Lucknow.

This is the second stint in the IPL for RPSG, who earlier ran the Pune-based Rising Pune Supergiant(s) 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.

"It is good be back in the IPL and I am delighted," RPSG owner Sanjiv Goenka told ESPNcricinfo minutes after bagging the Lucknow franchise. "It is an initial step. We now have to build a good team and perform."

A documented sports lover, Goenka wore his emotions on the sleeve the last time around, even replacing MS Dhoni as captain ahead of the 2017 season after they had finished runners-up in 2016. RPSG, which calls itself a "diversified business conglomerate", also has wider interests in sport. They own Atletico Mohun Bagan in the Indian Super League and have owned teams in table tennis and boxing previously.

CVC, meanwhile, are an international conglomerate with offices throughout Europe, Asia and the Americas. They were the one of the - if not the - first private equity firms to invest heavily in sport. They had a controlling stake and ran Formula 1 for close to a decade until 2016, before selling it to Liberty Media, the current owners of Formula 1. Recently they took a minority stake in La Liga, the top-flight Spanish football league, and also have vast experience in rugby leagues globally.

The IPL, though, will be the first time CVC run a team as opposed to their traditional strength of investing in and running a sporting league. It is learned that this is the second time CVC were looking to run a team in the IPL, having failed to acquire a stake in the Delhi franchise in 2018, which went to Jindal South West (JSW).

CVC's Ahmedabad home will be the world's largest cricket stadium, the Narendra Modi Stadium, which has an advertised capacity of 132,000 people. Lucknow's home games will be at the Atal Bihari Vajpayee Ekana Cricket Stadium.