IPL news

Deccan Chargers reject sole bid for franchise

Nagraj Gollapudi

September 13, 2012

Comments: 29 | Text size: A | A

Parthiv Patel loses his middle stump, Deccan Chargers v Kings XI Punjab, IPL, Hyderabad, May 8, 2012
Deccan Chargers' future is still up in the air © AFP

The auction for the IPL Deccan Chargers franchise on Thursday has ended in an anti-climax with the team's owners rejecting the sole bid they received. This leaves the franchise's future up in the air, with the BCCI 's working committee meeting on Saturday likely to take a decision on its next course of action.

The solitary bid reportedly came from PVP Ventures, a company that finances film projects in India. No details were made public but reports said the offer was for Rs 900 crore ($164 million). Only three bidders had evinced interest to buy the Chargers: besides PVP Ventures, RPG Group and Jaypee Group also bought the bid document. However on the day of the auction only PVP turned up.*

"They [the franchise] informed us that the price and terms were not suitable so they did not accept it," BCCI president N Srinivasan said in Chennai. "The BCCI assisted the Deccan Chargers and we also looked at the eligibility criteria, whether they were fit and proper. We found that the party was acceptable to us. After that, though, it was between Deccan Chargers and the bidder."

Today's development puts the ball squarely back with the BCCI, which could conceivably terminate the agreement with Chargers and put the players on the auction block. Though no decision has formally been taken, it is understood that the board has lost patience with Deccan Chronicles Holdings Limited (DCHL). Its plan for the way forward could include terminating the contract with Chargers and floating a tender to add a new team to the IPL. There would be a shortlist of cities for the bidders to choose from, with the location of the new franchise to be decided by the highest bid for one of those cities.

"DCHL have been been found out for various violations," a board official told ESPNcricinfo. "The BCCI tried to pitch in and help but that has not proved useful. The board needs to protect the IPL model and a new franchise can only enhance the IPL."

If the board does scrap Chargers' contract then it will encash the bank guarantee of the franchise to settle the dues of the players. Most players and coaching staff are reportedly yet to receive 85% of their contracted amount.

A positive outcome today could have changed that but it is understood that while DCHL were happy to go with the offer, the company's lending banks, rejected it. "The lenders [banks] and the owner [DCHL] could not come to an agreement over the mode of payment proposed by the bidder," the official said.

The official said the banks were not happy with PVP's plan to divide the bid amount in two parts over the next ten years. "They said they would pay Rs 450 crores ($82 million) in the next five years, at the rate of 90 crore per annum, and the rest in 2022," the official said. The banks' reluctance, the official said, could stem from the fact that they stood to receive the sale proceeds - which, in this case, would be staggered.

Last month, the banks had knocked on the BCCI's doors to help them out, after which the board had set a deadline of September 15 for Chargers to clear all their dues including player payments and report with a clean slate. However, DCHL said they were unable to sort out the problems and, after seeking the board's intervention, placed an advertisement announcing that the franchise was for sale.

The board official said that Chargers still had two days' time to figure out their final decision: "The [BCCI] decision could depend on what the Chargers report on Saturday."

Thursday's development is a harsh reality check for the IPL, whose valuations across several properties and deals had brought the BCCI, its owners, more than $2 billion. Mumbai Indians were the costliest franchise at $111.9 million in the first team auction in 2008, with Chargers third at $107 million; just two years later, the Sahara group successfully bid $370m for Pune Warriors while the Kochi franchise, now dissolved, fetched $333 million.

Now, however, franchises are experiencing operational difficulties vis-à-vis the IPL. Chargers and Royal Challengers Bangalore have delayed payments to their players; some franchises with multiple owners are reported to be looking at selling stakes to raise funds.

* September 13, 19.30 GMT This story has been updated with the details of potential bidders

Nagraj Gollapudi is an assistant editor at ESPNcricinfo

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Posted by   on (September 15, 2012, 17:51 GMT)

@ Tadikonda Daiwik ... no one cares whether you watch IPL or not. It's a stupid tournament anyway

Posted by Sinhabahu on (September 15, 2012, 9:59 GMT)

So this is why many Indians wanted the SLPL to fail. The irony is that both Kochi and Kerala had Lankan captains. LOL.

Posted by TheWayCrciketShouldBePlayed on (September 15, 2012, 9:41 GMT)

@ Thushaa, Do you know how any team perform next season?

Posted by TheWayCrciketShouldBePlayed on (September 15, 2012, 9:12 GMT)

Kochi Down DC Down 8 More Wickets to go for All Out!

Posted by Thushaa on (September 15, 2012, 8:28 GMT)

End of DC. Their fate was on the wall, literary. Actually all low performing teams should be scrapped, as they don't give any colour or competitiveness to the IPL . They just slowing things down and taking the fan base down also. Time to cut down on the teams and make IPL more competitive.

Posted by Thushaa on (September 15, 2012, 3:15 GMT)

A team like the Chargers are also having difficulties.. hmm, its time to say Bye to Chargers I think, anyway their time is up ,as they look exhausted and their fan base is also seems going down. Time for a new team, or just stick with the rest of the teams... T.Dinesh

Posted by Thushaa on (September 15, 2012, 3:12 GMT)

Hmm..this is alarm bells for IPL. If a good team like the Chargers are also having difficulties, its going to be real hard if a team goes into the relegated zone in one year to get running in the next years' IPL. The model has to be revamped or totally scrapped. Time for all teams to think deep, as this may be the beginning of the end. As a Indian fan, I will be really afraid of these developments. As the IPL is getting kind of boring and fan base is loosing interest, time for some serious thinking.

Posted by   on (September 15, 2012, 2:04 GMT)

People are talking about NBA/NFL/EPL as role models but they forget these teams play many more games to operate. Nobody is going to sit and watch each franchise play 30-40 odd t20 games, which in effect is a cut down version of a proper game of cricket (unlike football, baseball, basketball). Therefore the value and operating costs these franchises can operate under is far smaller and the BCCI are being unrealistic if they think a franchise is worth hundreds of millions.

Posted by   on (September 14, 2012, 20:10 GMT)

End of IPL!!!!! Thats it IPL bye bye

Posted by   on (September 14, 2012, 20:01 GMT)

dc we will miss u...................

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