Indian Premier League 2010 March 7, 2010

IPL defers unveiling new franchises to March 21

88

The IPL's unveiling of its two new franchises on Sunday ended in an anti-climax with the league pushing back the entire process by two weeks, in the process scrapping the existing tender procedure after bidders objected to stiff financial clauses. The new tenders, which will be floated on March 9 and opened on March 21, will drop a clause requiring the bidder to have a net worth of $1 billion.

The new process will also amend two existing clauses: One will be a reduction of the advance deposit from $100 million to a $10 million "performance guarantee", to be submitted 24 hours in advance of the bid being opened. Another original clause gave the IPL's governing council the discretion to seek from the winning bidder 100% of the amount with a minimum time-frame; under the new process, the winning bids will be expected to pay 10% of their bid within 48 hours.

The minimum bid amount, however, remains the same at $225 million; the existing tenders were not opened at the IPL governing council meeting in Mumbai and were returned to the bidders.

"The relaxation [of the clauses] was because we received letters from many, many companies who had expressed interest but said that the $1 billion net worth criterion [was one] which owners of the existing franchises were not asked for earlier," Lalit Modi, the IPL commissioner, said at a brief press conference. "So they asked why they were asked for the new criteria, which eliminates them from bidding, hence the clause has been amended to give more people the opportunity to bid."

Sources told Cricinfo that the opposition came from within too - senior BCCI officials had objected to the radical revision of clauses from those of two years ago. It was a reversal of Modi's stand that the high entry fee was a means of keeping away frivolous investors. "We put a high-end clause for entry because we need to get solid companies," he had told Cricinfo on Saturday. "This business requires a long gestation period and that is the reason we want to secure ourselves. The BCCI always secures itself."

The manner of the announcement - a public event scheduled to launch the next phase of the IPL's remarkable success story - and the scale of the cutbacks in the clauses represent a departure from the usually sure-footed manner of the league's workings and suggests that it had overestimated the viability of its terms and conditions for potential franchise owners. It also gave credence to the claim made on Friday by Priyadarshan, a film director, that the $1 billion clause was unviable and had put him off bidding for a franchise.

The atmosphere at the Four Seasons hotel in downtown Mumbai was already shorn of the usual bustle associated with any IPL event, given the boycott by the National Broadcasters' Association (NBA), an umbrella group of Indian TV channels. Not even the surprise entry of Bollywood stars Saif Ali Khan and Kareena Kapoor could raise more than a muted reception.

Eventually only three bidders evinced interest: a consortium of Khan (son of former India captain MAK Pataudi), Kareena and her sister Karisma, Pune's Panchshil group of industries and Venugopal Dhoot, owner of electronics manufacturer Videocon, who were bidding from Pune; the Adani Group for Ahmedabad and the Jaypee Group from a undisclosed venue.

"The reason given was that they unilaterally cancelled the bids," Atul Chordia, chairman and chief executive of the Panchshil Group, said. "It is not the question of happiness about the previous terms. Whatever terms and conditions were there we abided by it, whatever the tender form asked for we gave it, we tendered. We gave the 100 million dollar bank guarantee."

Chordia said he and the other investors in his group would be back to bid for the new tender.

The cities in the fray were Pune, Ahmedabad, Nagpur, Kanpur, Dharamsala, Vizag, Rajkot, Cuttack, Baroda, Kochi, Indore and Gwalior. The base price for the bid is more than four times the value set in January 2008, when the original eight franchises were auctioned. Other terms and conditions were similarly stringent - all bidders had to stump up a returnable deposit of $100 million before the bid, as against the $5 million (approximately) stipulated in 2008.

Nagraj Gollapudi is an assistant editor at Cricinfo

Comments have now been closed for this article

  • Arun on March 8, 2010, 16:05 GMT

    We r eagerly looking 4 the first IPL team from Kerala.....

    KERALA COBRAS........ will be our team.....

  • D N on March 8, 2010, 16:05 GMT

    IPL has finally tasted defeat in its backyard. I think a little bit of humility will not hurt IPL. It is a old fashioned virtue, not really valued much in today's world. There is a saying that what goes up must come down and a fall is twice as faster as its raise. IPL can take lessons from IT promoters in 2000. Suddenly they were geniuses no more !!!!! Wake up Mr. Modi and IPL coterie. It is not you who has created this but the public who come to stadiums and the families that watch this tamasha on TV at home. You are just a facilitator with some smart ideas.If people do not watch - you are nowhere. Get worried about innovation not just strategic breaks (game is getting stale already) rather than money as public is fickle minded and may not like IPL 3 or 4. Wake up before it is too late

  • Dummy4 on March 8, 2010, 15:25 GMT

    IPL = Indian Proudy League

  • Dummy4 on March 8, 2010, 14:59 GMT

    RCB2 would also Rock..!!:)

  • Cric on March 8, 2010, 14:28 GMT

    A lot of folks are side swiping IPL's money aspect. They should get out of their single-mindedness and realize that IPL has two aspects - Cricket and Money. And that there will be conflicts between these and there will be choices made that favor one or the other at different points in time. I, for one, am happy that Cricket now does not have to look at 'Sarkar mai-baap' for support. I hope other sports will grow up as well. Hockey, Football, etc have fed off of gov support for far too long.

  • Dummy4 on March 8, 2010, 7:35 GMT

    Pune is good choice but then Mumbai already has a team and team from pune now will directly affect Mumbai revenue.. Better will be get team from Ahmedabad and Kanpur to get Pan India Look

  • Dummy4 on March 8, 2010, 7:24 GMT

    Any hopes of Kerala getting a team... Shasi tharoor... Mohanlal, priyadarshan will do... Wish U all the best....

  • Dummy4 on March 8, 2010, 7:20 GMT

    IPL is not a cricket Tournament, It's only a business show. Players and Teams are products. And World crikcet viewers are consumers of these poducts. Mony... Money.. thats main aim of BCCI. Sure, IPL Cricket is not a Sports tournament.

  • Sony on March 8, 2010, 6:31 GMT

    @BapiDas, for development of cricket in india, bcci needs money. thru ipl, bcci gets big money.

    another good thing about ipl is, only 11 guys from 100 crore can play for india. rest of the players spend their life playing ranji cricket. non of them could see cricket alone as a profession as the money they get from playing domestic cricket is not good when compared to some other professions.

    what ipl has done is, it completely changed this equation. now a domestic player can see cricket alone as a profession. that means we will get to see more professional players even in domestic cricket.

    we should not be caring if corporates are making big money or not. but if a small percentage of that money gets distributed amoung cricket people of india (both players and technical staff), am happy.

  • Balasubramanian on March 8, 2010, 6:24 GMT

    What is the real reason for this scrapping of a planned bidding process remains a mystery though one wouldn't lose one's money if one betted that some 'BCCI favoured' bidders opted out, for whatever reason, presumably stiff norms for bid acceptance. BCCI is unwilling to allow IPL to become an independent entity, like the English FA allowed English Premier League to become. BCCCI, believe it or not has no CEO or strong management team. In contrast, every well-run sports association around the world has a strong management team, which has fairly independent operational control. Here the Board members themselves run the operations. On the other hand, the BCCI makes tonnes of money and so does the IPL, and there is no reason why they should be extended any tax benefits by the government. They should pay regular corporate tax. This will force them to make meaningful investments and spends on cricket infrastructure.

  • No featured comments at the moment.