March 30, 2010

Pass the gravy

There's a lot of silly money flying around in the IPL: Indian players will benefit, but it's a little more complicated for the franchises
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Midway into season three of the Indian Premier League, the dollar signs have got larger, the hype louder and the gossip and side stories even more complicated. This year's tournament has been almost taken over by the numbers being discussed for next year and the drama being anticipated as the IPL jumps orbits from eight teams to 10.

Two new franchises were sold on March 21. Pune went to the Sahara business group for US$370 million, and the Rendezvous Sports World consortium won the rights to Kochi for US$333 million. That aside, all IPL teams will now be allowed to spend up to US$7 million a year each to recruit players. This would include money spent on direct hiring, retaining some of the players contracted for the first three seasons - subject to rules to be framed by the IPL council - and buying new players at a razzmatazz sequel to the inaugural auction in Mumbai in February 2008. The new cap is US$2 million above the previous one.

What does all this mean for players, franchise owners and for ordinary cricket fans - if they can decipher the IPL's manic deal-making anymore? In the first place, are the massive bids by Sahara and Rendezvous realistic?

Franchises: batting for valuation
A quick assessment by the chief executive of one of the current franchises insists the two new teams will lose "at least Rs 100 crore [about US$22 million] each year for the next five years". The figure could change if the Indian economy grows exponentially and the IPL business model reaches even greater heights, and if the new teams pull in generous sponsors. Yet operational losses of a considerable nature are almost guaranteed in the near term.

So what makes an IPL franchise worth all the money? It is a combination of business and an ego trip. Whether it is football clubs in England or baseball teams in the United States, the decision to purchase a sports team is not always a rational one, driven by profit-loss calculations alone. Often well-heeled individuals or businessmen do it to announce their arrival. When their fortunes decline, they sell to the next billionaire, from the next sunrise industry. The fact that supply is limited - there will only be a finite number of football clubs or IPL franchises - keeps demand robust.

Yet there is also a strong element of business. Some of the better-managed IPL franchises are beginning to turn the corner, though not quite make huge money yet. They are exploiting a strange paradox in India. The Indian economy is today large enough to support and sustain more than one sport. Even so, India remains fundamentally a one-sport society. This means advertisers, sponsors and team-owners are simply over-invested in cricket.

Nevertheless, whatever the public claims of IPL stakeholders, in private, franchise officials offer very modest assessments of profits - if they offer any assessments at all. True, every franchise has gained from the surge in central revenues - revenues that accrue to the IPL as an institution and are divided between the League authority and the participating teams. Yet, in 2011, each franchise's share of central revenue will change from 7.5% to 6%, with the addition of two teams.

In the coming 12 months, the single largest source of income for many of the current franchise owners may well be from the sale of equity. "Every franchise," says an executive at one of the teams, "is ready to sell a stake to an interested investor. Everybody is looking for the right fit." A few franchises (King's XI Punjab is mentioned by IPL insiders) have promoters said to be looking to sell a majority stake and essentially exit the cricket business.

How do you sell a business that is not making money or is barely in the black? This is a function of Twenty20 cricket's two Vs: vanity and valuation. You tickle the potential buyer's vanity and excite him with the option of owning (or owning a part of) an IPL team. Second, you maximise that silly game called valuation. Pune and Kochi have set the benchmark on what a virgin franchise is worth. A franchise that is already established, and has brand recall, city-specific identity, player and local endorsement associations and a certain fan base, could fetch more.

In the end it will boil down to who bargains better and which valuation figure is deemed most credible. Dizzying numbers have done the rounds in recent times. It is sobering to understand that these are often notional figures, driven by what can only loosely be described as wild optimism.

A few weeks ago, the consultancy Brand Finance plc valued the IPL as an entity at $4.13 billion, up from 2009's $2.01 billion. A sports franchise's commercial value has little to do with on-field results, it is often contended. As if providing evidence of this, Brand Finance said in its report that the valuation of Deccan Chargers, the 2009 IPL winners, had declined from $34.8 million at the start of season two to $ 34.4 million at the start of season three.

All this would seem a fair argument. However, in May 2009, a joint exercise by two companies, Intangible Business and MTI Consulting, valued Deccan Chargers at only $11 million. The variation between Brand Finance and Intangible Business-MTI Consulting was as wide when it came to valuing other franchises.

One the eve of the 2010 season, Brand Finance estimated Rajasthan Royals as having a brand value of $45.2 million, well ahead of Mumbai Indians ($40.8 million) and Delhi Daredevils ($40.5 million). By all accounts, Rajasthan Royals is not the best-run franchise. In contrast, both Mumbai Indians and Delhi Daredevils are credited with a solid management structure. Also, any cricket franchise in India's two largest cities is always going to have access to greater revenue streams than a team in Jaipur.

The Indian economy is today large enough to support and sustain more than one sport. Even so, India remains fundamentally a one-sport society. This means advertisers, sponsors and team-owners are simply over-invested in cricket

How then can Rajasthan Royals have a brand valuation higher than that of Mumbai Indians and Delhi Daredevils? Would any investor pay more for, say, 20% of equity in Rajasthan Royals than he would for 20% of Delhi Daredevils or Mumbai Indians?

At some point between now and season four, as franchise owners begin to sell or sell out, the IPL will have take off its billion-dollar glasses and read that googly.

Players: batting for bonuses
All in all, the two new franchises are looking at a very expensive 2011. Other than paying their licence fee to the IPL, they will have to spend enormous amounts on brand building, and recruitment of players and support staff. The eight other teams have had a three-year headstart. They will almost inevitably be allowed to retain (subject to mutual agreement) some of their current stars. If the new franchises want to buy out these marquee players, the wage bill will go up that much further.

Indeed, the biggest gainers are going to be the players. In 2008, $1.5 million a season was the highest salary for any one IPL cricketer. That was what MS Dhoni of Chennai Super Kings was promised. In 2009, Kevin Pietersen (Bangalore Royal Challengers) and Andrew Flintoff (Chennai Super Kings) were auctioned for a bit more, but neither has played an entire season.

In 2011, team managers are almost unanimous that the top player salaries will breach $2 million a year and "could even reach $2.5 million". It is also clear that the highest-paid cricketers, by a fair amount, will be Indians.

Again, there are two reasons for this. First, as an IPL team manager says, "It is apparent a franchise's brand identity is determined by local players, especially among Indian or Indian-origin audiences." Big contemporary players from abroad - Pietersen, Ricky Ponting, Michael Clarke - have either shunned the IPL or can only appear when international commitments permit. To them, this is not the priority format of the sport.

The second reason is pure demand and supply. As one franchise official explains, "Ten teams will need 70 Indian cricketers. If each player is to have a back-up, that means 140 cricketers of some quality. Where do you have such reserves?"

For the October 2009-September 2010 period, the BCCI has offered central contracts to 40 cricketers. This list includes Sachin Tendulkar and Suresh Raina, but also Abhishek Nayar, Ajinkya Rahane and Wriddhiman Saha - talented perhaps, but completely unproven at the international level.

Yet, these 40 - give or take a few - are going to corner a significant segment of the US$70 million that the 10 franchises will spend on players in 2011. The best of the lot - Dhoni, Raina (Chennai Super Kings), Yusuf Pathan (Rajasthan Royals), among other proven Twenty20 performers - could make multiples of millions. Even Manish Pandey (Bangalore Royal Challengers) and Manoj Tiwary (Kolkata Knight Riders) could be prized commodities.

However, this will lead to a smaller pool of money being available for the foreign players. Some of them may already be sensing the competition. IPL 2010 has been noteworthy in that cricketers such as Jacques Kallis (Bangalore Royal Challengers), Andrew Symonds (Deccan Chargers) and to an extent even Matthew Hayden (Chennai Super Kings) are doing better (so far) than in previous seasons. At any rate, they have appeared more purposeful.

To some extent, this could be because they have finally got a hang of the IPL. It is more likely that they are taking the whole tournament much more seriously because they realise it's not a one-off, Allen Stanford type circus but in some senses the future of cricket, with real pay cheques. Their performances this year - not the successes or failures of 2008 and 2009 - will decide how badly franchises will want them in the upcoming auction.

Particularly worried and vulnerable are players who are done with international cricket or are close to the end of their careers. In 2008, Symonds went for $1.35 million, Sanath Jayasuriya (Mumbai Indians) and Kallis earned close to a million dollars each, and Adam Gilchrist (Deccan Chargers) signed on for $700,000. In 2011, it is conceivable that all of them may have to settle for less. With no alternatives to the IPL and no Test/ODI career - or only a short one in the case of Kallis - their bargaining power will decline sharply. The fact that there are simply so many foreign players competing for four slots per playing XI will not help. In the mini-auction of 2010, the Pakistani players realised the consequences of this when the franchises ignored them - fearing political tensions - and instead bought alternatives from New Zealand, the West Indies and South Africa.

In 2011, the Pakistanis will be back in contention. They will join a queue of non-Indian cricketers trying to break down the door and get into the IPL living room. All this will make the foreign-player auction even more of a buyer's market.

The same principle will probably hold true for some of the older Indian cricketers who are not quite built for Twenty20. VVS Laxman never does seem to be part of Deccan Chargers' plans. Rahul Dravid would patently be happier doing something else. The probable exception is Sachin Tendulkar. Sahara has indicated it wants him to captain its team and Tendulkar could trigger a bidding war between Mumbai Indians and the yet-unnamed Pune franchise.

Overall, however, a situation where a Yusuf Pathan gets well over a million dollars, maybe close to $2 million, and a Laxman goes unsold is a frighteningly real possibility. The IPL has changed this game and its verities forever.

Ashok Malik is a writer in Delhi

Comments have now been closed for this article

  • POSTED BY srini_cric on | April 2, 2010, 21:16 GMT

    I love watching IPL no doubt about that. But every time I watch a game I feel sorry for the bowlers and it gets me frustrated at how IPL is putting a dent in the quality of cricket that is being played. Boundaries are being brought in and free hit for a No ball , I feel IPL is creating a biased game of cricket just to raise its commercial value. I think the emphasis is purely on big hitting and big scores to sustain the viewers interest in the game but the fact that is being forgotten is that a good competitive game always is a great entertainment.

  • POSTED BY TenRajesh on | April 2, 2010, 10:39 GMT

    The article is clearly insignificant considering the IPL is in nascent stage. It will certainly take time for the IPL management , team owner , broadcaster etc to find out the best business model. Like it or not IPL will find a way to make it profitable in its own way.

  • POSTED BY MasterClass on | April 2, 2010, 7:04 GMT

    @inswing - TY for the correction. But even if the franchise is only for 10 years, the fact is that $35 mil/year doesn't seem a lot to pay compared to what the owners are getting. BTW the population of Milwaukee is less than 1/10 that of even the smallest IPL team city, with some being close to 50 times more. You mentioned NFL ticket prices in relation to IPL ticket prices, and concluded that advertising was the main revenue source. I concur. However you failed to realize that the IPL advertising revenue (which is based on viewership) is actually similar to NFL than to MLB. That is to say: IPL games have a national viewership, just like NFL games, and thus command much higher advertising revenue unlike MLB or NBA which have only regional or city viewership. When the Lakers when not in the finals or playoffs I didn't reallly care who played. Most casual sports viewers are like me. Bcuz of the lake of sports viewing options in India (and other factors) all IPL games get national audience.

  • POSTED BY RonG on | April 2, 2010, 1:32 GMT

    Superb article - hope to see more such articles that dissect the business of cricket in India.

  • POSTED BY shrastogi on | April 1, 2010, 14:01 GMT

    Informative article. IPL should have 60% of 7 million as salary cap rest 40% should be available to franchisees to be given as performance bonus. This would benefit younger/lesser known talent who for three years get lesser money inspite of giving performance.For a player $2 -$2.5 million is a high number. If a sought after player also performs well he would anyway get performance bonus. For 45 day IPL window if sought after players earn Rs 10-15 lakh a day it is definitely juicy for even CEO & Chairmans of the companies supporting IPL teams would not be earning that much as salary.

  • POSTED BY libinbond on | April 1, 2010, 13:10 GMT

    I agree with redneck.. Most people are just calculating present cash flows and are completely disregarding present worth of future cash flows. Basically means, if Sahara is willing to shell out $370 mil for a team, with the amount of premium they are paying over a team like Mumbai which was worth $150 mil 3 years ago, it is because it takes into account the brand value that has built up, and the future cash flows look stronger due to bigger brand building each year... The first timers were risk takers, with future cash flow being just a paper calculation.. 3 years later, Sahara knows that Reliance played it correctly and the Mumbai franchise will, aboslutely without any sense of doubt, WILL make money.. Nobody here actually doubts the business acumen of Mukesh Ambani, do they ? $370 mil is not the price of Pune now, but the buyers believe the price after 10 years will be much higher. This will get clearer when franchises offload stakes bit by bit for humongous returns on investements..

  • POSTED BY EuropeanSummer on | April 1, 2010, 11:17 GMT

    Can someone help me understand the player fee payment structure?

    Question 1: In case Player X has been bought by a Franchise for $1 million. Will he be paid $1 million every season irrespective of the number of matches he actually plays? If he joins mid way through the tournament or if he on bench for 10 out of 14 league matches, will he be paid the entire contract amount of $1 million? or is the match fee pro-rated based on the number of matches actually palyed by the player?

    Question 2: Are players paid extra for playing in the Champions league?

    Question 3: For example if someone like Gibbs plays for both Cape Cobras and Deccan, and if these two teams clash in the Champions league, which team is he obliged to select? obviously it can't be his choice, because both of them pay him money and would want him to play.

  • POSTED BY Jiteendra on | April 1, 2010, 7:07 GMT

    A gud attempt depicting the effect of money on IPL.... But it's not appropriate to say dat it's affecting the quality of cricket being played in any way... Rather than in a country like India... where the sports is hailed as a religion, it's a fantastic opportunity for players as well as investers to showcase their skills.... The pin pointing on IPL is just not correct as it is helping the game reach to a larger share of audiences which will surely result in the popularity of the game worldwide in years to come...

  • POSTED BY on | April 1, 2010, 3:33 GMT

    I really feel that IPL is a ggod business and player are not given respect what they should get.

  • POSTED BY jadedfan on | March 31, 2010, 22:36 GMT

    Nice write up, however, Ashok is wildly off the mark w.r.t Matty Hayden - he was the orange cap winner the last time round, remember???!!! For me, Aussie cricketers have demonstrated their professionalism in the IPL as no one else has - with the exception of Ponting, who should have never signed up in the first place. Examples: Warne, Watson, Marsh, Warner, Hayden, Gilly and Symonds. Even the ones who haven't had massive success are putting in 100% when called upon.

  • POSTED BY srini_cric on | April 2, 2010, 21:16 GMT

    I love watching IPL no doubt about that. But every time I watch a game I feel sorry for the bowlers and it gets me frustrated at how IPL is putting a dent in the quality of cricket that is being played. Boundaries are being brought in and free hit for a No ball , I feel IPL is creating a biased game of cricket just to raise its commercial value. I think the emphasis is purely on big hitting and big scores to sustain the viewers interest in the game but the fact that is being forgotten is that a good competitive game always is a great entertainment.

  • POSTED BY TenRajesh on | April 2, 2010, 10:39 GMT

    The article is clearly insignificant considering the IPL is in nascent stage. It will certainly take time for the IPL management , team owner , broadcaster etc to find out the best business model. Like it or not IPL will find a way to make it profitable in its own way.

  • POSTED BY MasterClass on | April 2, 2010, 7:04 GMT

    @inswing - TY for the correction. But even if the franchise is only for 10 years, the fact is that $35 mil/year doesn't seem a lot to pay compared to what the owners are getting. BTW the population of Milwaukee is less than 1/10 that of even the smallest IPL team city, with some being close to 50 times more. You mentioned NFL ticket prices in relation to IPL ticket prices, and concluded that advertising was the main revenue source. I concur. However you failed to realize that the IPL advertising revenue (which is based on viewership) is actually similar to NFL than to MLB. That is to say: IPL games have a national viewership, just like NFL games, and thus command much higher advertising revenue unlike MLB or NBA which have only regional or city viewership. When the Lakers when not in the finals or playoffs I didn't reallly care who played. Most casual sports viewers are like me. Bcuz of the lake of sports viewing options in India (and other factors) all IPL games get national audience.

  • POSTED BY RonG on | April 2, 2010, 1:32 GMT

    Superb article - hope to see more such articles that dissect the business of cricket in India.

  • POSTED BY shrastogi on | April 1, 2010, 14:01 GMT

    Informative article. IPL should have 60% of 7 million as salary cap rest 40% should be available to franchisees to be given as performance bonus. This would benefit younger/lesser known talent who for three years get lesser money inspite of giving performance.For a player $2 -$2.5 million is a high number. If a sought after player also performs well he would anyway get performance bonus. For 45 day IPL window if sought after players earn Rs 10-15 lakh a day it is definitely juicy for even CEO & Chairmans of the companies supporting IPL teams would not be earning that much as salary.

  • POSTED BY libinbond on | April 1, 2010, 13:10 GMT

    I agree with redneck.. Most people are just calculating present cash flows and are completely disregarding present worth of future cash flows. Basically means, if Sahara is willing to shell out $370 mil for a team, with the amount of premium they are paying over a team like Mumbai which was worth $150 mil 3 years ago, it is because it takes into account the brand value that has built up, and the future cash flows look stronger due to bigger brand building each year... The first timers were risk takers, with future cash flow being just a paper calculation.. 3 years later, Sahara knows that Reliance played it correctly and the Mumbai franchise will, aboslutely without any sense of doubt, WILL make money.. Nobody here actually doubts the business acumen of Mukesh Ambani, do they ? $370 mil is not the price of Pune now, but the buyers believe the price after 10 years will be much higher. This will get clearer when franchises offload stakes bit by bit for humongous returns on investements..

  • POSTED BY EuropeanSummer on | April 1, 2010, 11:17 GMT

    Can someone help me understand the player fee payment structure?

    Question 1: In case Player X has been bought by a Franchise for $1 million. Will he be paid $1 million every season irrespective of the number of matches he actually plays? If he joins mid way through the tournament or if he on bench for 10 out of 14 league matches, will he be paid the entire contract amount of $1 million? or is the match fee pro-rated based on the number of matches actually palyed by the player?

    Question 2: Are players paid extra for playing in the Champions league?

    Question 3: For example if someone like Gibbs plays for both Cape Cobras and Deccan, and if these two teams clash in the Champions league, which team is he obliged to select? obviously it can't be his choice, because both of them pay him money and would want him to play.

  • POSTED BY Jiteendra on | April 1, 2010, 7:07 GMT

    A gud attempt depicting the effect of money on IPL.... But it's not appropriate to say dat it's affecting the quality of cricket being played in any way... Rather than in a country like India... where the sports is hailed as a religion, it's a fantastic opportunity for players as well as investers to showcase their skills.... The pin pointing on IPL is just not correct as it is helping the game reach to a larger share of audiences which will surely result in the popularity of the game worldwide in years to come...

  • POSTED BY on | April 1, 2010, 3:33 GMT

    I really feel that IPL is a ggod business and player are not given respect what they should get.

  • POSTED BY jadedfan on | March 31, 2010, 22:36 GMT

    Nice write up, however, Ashok is wildly off the mark w.r.t Matty Hayden - he was the orange cap winner the last time round, remember???!!! For me, Aussie cricketers have demonstrated their professionalism in the IPL as no one else has - with the exception of Ponting, who should have never signed up in the first place. Examples: Warne, Watson, Marsh, Warner, Hayden, Gilly and Symonds. Even the ones who haven't had massive success are putting in 100% when called upon.

  • POSTED BY on | March 31, 2010, 19:44 GMT

    IPL is overtaking good quality cricket. By that i do not mean that i like test cricket or vice versa. Now, i miss the shots played by dravid, sachin and laxman in the normal cirumstances.Those beautiful cover drives and fine leg glances are replaced by slog sweeps and mongoose batted flat sixes. Same goes with the bowling, the fast bowlers bowling slow balls and spinners bowling quicker bowls. Hardly do we see, swinging deliveries. The people are making each and everything possible out of ipl. Cricket can't be compared to football. Football is same all the way. But, the very soul of cricket is being murdered by a phenomenon named IPL. To be honest, i love IPL too, but there is a limit for everything and now IPL is exceeding hat limit.

  • POSTED BY on | March 31, 2010, 19:04 GMT

    Thought provoking article on the business and commercial aspects of the circus called IPL.

    The author makes a valid point about the valuations, and the last time I remember the term "over-valued" used so blithely was before the dot-com bubble burst.

    Regardless of which player is better suited for the format, it appears that most of them will make money, but if the sponsors and franchisees don't, will they come back?

    As for the quality of cricket - well, there is Maggi Noodles and there is gourmet food and I guess to each his own.

  • POSTED BY on | March 31, 2010, 18:46 GMT

    wah malik shaab,

    this is the best buisness analysis for ipl i have read so far,india is moving west and with the richer getting richer and india adapting to new technologies,India is going to see a lot of marketing of ipl as it is cricket crazy.the young upcoming cricketers should read this not watch ipl and be on the cricket stadium practicing 24 X 7,it is never easy to earn millions of dollar all celebrities know that and this is the time god has given to upcoming sports person to make thier life.

    wah wah India

    mrugal

  • POSTED BY AlexDackard on | March 31, 2010, 14:23 GMT

    Folks don't seem to realize that the pie has just gotten BIGGER. The increase in no. of teams means that no. of matches have just gone up, you can bet your undies that modi WILL renegotiate a new contract with IPLs broadcaster. Last time he renegotiated the new terms meant a nearly 50% increase in broadcast fees. And all the sponsors pay their respective fees on per match basis - increase in matches means increase in sponsorship fees. Then in India the biggest pie after broadcasting the on - air 3G content has not been explored yet, but this year3G spectrum auction will happen and by next year hopefully 3G services will role out - pie gets even bigger. Merchandise has not really picked up as a viable revenue stream, this generally happens in latter part of franchise's lifetime - pie WILL get even bigger. I am running out of words but take my word for it there is enough for everyone and MORE. IPL is here to stay like it or not.

  • POSTED BY inswing on | March 31, 2010, 14:15 GMT

    @masterclass, the price is for owing the franchise for 10 years only, not forever. (see http://timesofindia.indiatimes.com/iplarticleshow/5709804.cms "the franchise will be valid for 10 years" or http://in.reuters.com/article/topNews/idINIndia-31576620080124 "The base price for owing a team for 10 years was set at $50 million. ").

  • POSTED BY inswing on | March 31, 2010, 14:08 GMT

    @Balaji, your point taken. But consider this: There are about 160 games in the baseball season (for one team), 80 at home. In IPL there are 16, 8 at home. This is comparable to NFL (16 games in the season), where avg ticket prices are around $80. Some tickets are several thousand rupees, but no way the *average* ticket price is anywhere close to $25 in IPL. Second issue is the market size. It is correct that the Indian population base is much larger than US. But the issue is not just the body count, but the spending power and willingness. In the US, people will buy a $10 t-shirt for $50 because it has the player name (official jersey), and they have no savings. In India how many will buy a Rs2000 t-shirt that they could buy for 200 otherwise (no doubt some will, but very small %). The main revenue source has to be advertising, and it all boils down to how much additional goods/services the sponsors can sell due to IPL ads. Millions of rupees, yes, millions of dollars, unlikely.

  • POSTED BY on | March 31, 2010, 12:36 GMT

    To me IPL is just like a movie that I can watch and have fun for some hours and what is business about IPL now it's on its boom so you cannot predict about the coming things. To me it should have the flavor of every nationality leaving Pakistan out of it make it discriminatory league, leaving CHAMPIONS out of a show will always have a question mark ? on the credibility of even and whatever the franchise make in the period, the cricket really sprit is hurt badly. If someone is going to decide his future on basis of thing that is for money only it will make life harder for the crazy nations loving cricket. Passion for cricket is not involved in that type of business only passion for money is there I really appreciate the MCC decision not to take stake in that league. Comments are always comment you cannot force people to follow the mentality you have but same time If you have big followership than it might counts what you are saying.

  • POSTED BY AshokGupta on | March 31, 2010, 10:24 GMT

    I really feel that the author is disrespectful for a test legend like Laxman. Remember that Laxman rejected icon status. By doing this he already stated that he did not consider himself an icon in T20. So you need not disrespect him with such comments.

  • POSTED BY Bilal_Choudry on | March 31, 2010, 9:19 GMT

    its club cricket and should be treated as such ... people like yousuf pathan or tiwary have already failed to make an impact on the international stage ... or look at how the people who are well past there best still performing on the IPL. The only conclusion i can get to is that IPL is overrated and the cricket played is below standard we all saw what happened in the champions league ...

  • POSTED BY fahadchughtai on | March 31, 2010, 8:58 GMT

    This whole talk of the IPL failing in the future is unlikely though, it will have to lose many foreign players to survive in the Indian market, the management is beginning to realize that. these games aren't mere exhibition games anymore which means something and Indian players are the ones to give it their all. To all who are worried, don't be. This is evolution.

    Pakistan needs to develop its own cricket league, not to rival the IPL, but one that caters to its own domestic market.it could include foreign players, though not many will come. however, it can attract talent from Associate nations, like Afghanistan who are at present underrepresented. New Zealand talent can play for Australia in the KFC Big Bash, and South Africa and England have their own leagues.The West Indies already has a good format in place and can build on it to attract cricketers from the region.

    Altogether, this will make the Champions League the tournament to watch internationally, not the IPL.

  • POSTED BY on | March 31, 2010, 7:00 GMT

    " a situation where a Yusuf Pathan gets well over a million dollars, maybe close to $2 million, and a Laxman goes unsold is a frighteningly real possibility. " Even more possible is IPL taking over the top priority for many cricketers and their will base their carrers on how well the did in the IPL

  • POSTED BY Mahatma_of_Great_Britain on | March 31, 2010, 6:52 GMT

    To FallsDown:

    No IPL does NOT need to have any more than 4 foreign players each team or else it'd meet the same fate as ENGLISH Premier League, where sometimes there's not even a single ENGLISH player playing in a team. This results in England failing to even qualify for Euro Cup. INDIAN Premier League is to develop India's youth and give them a cricketing platform where they get to play with and against best players and enhance their skills. IPL's hugely successfull even in its 3rd year with just 4 foreign players in team and can't see any sensible reason for it to increase this cap.

  • POSTED BY Mahatma_of_Great_Britain on | March 31, 2010, 6:51 GMT

    malko2685 and all the Pakistani supporters:

    After Pakistan's diabolical performance in Australia with 10 defeats in a row, I'm not surprised they're not chosen and quite rightly so. I wouldn't want someone to work for me, who's good for nothing. Besides, without Pakistani, IPL's drawing not just billion within India, but also millions of fans across the globe, expanding further next year, even reaching USA and soon to be a threat to EPL. Hardly see if IPL's the one losing out without Pakistanis. It's the Pakistanis who's losing out, for sure.

  • POSTED BY crikbuff on | March 31, 2010, 6:40 GMT

    Finally a serious article questioning the 'valuations'. IPL is nothing but the goose that's laying golden eggs (T20 cricket) being cut open and eaten up! And where's the bottom lines for the franchises? There's absolutely no transparency in their deals! The fact is that there's despearation all over - and smart ones (KXIP) are looking to sell out. Just look at the way ad-spots have been sold - on TV, in-ground, in the air (blimp) - they've even fitted in ads within the over! Modi and BCCI are raking the moolah. Franshises are cruched and are fooling sponsors. Look at the KKR sponsors - all brands endorsed by SRK! And all this for sub-standard cricket. IPL is a bubble folks! Wake up before it's too late!

  • POSTED BY on | March 31, 2010, 6:10 GMT

    @inswing The average ticket price is a lot more than Rs.150. Here in Chennai the cheapest priced Rs. 500 ($11) tickets were sold a long time ago. The tickets available are now well over Rs. 1000 and if you count the premium tickets, the average ticket price should be well over $25. Also, CSK has a following of probably 30 million people. That is many times over Milwaukee population. Moreover, unlike in US where each sport has to contend with 3 other top leagues, Cricket has an unbridled access over 1 billion people economy growing at 8%.

  • POSTED BY MasterClass on | March 31, 2010, 4:42 GMT

    Interesting and well written article. I concur on many of the observations, but disagree with the analysis/conclusions/inferences on team valuations. I believe that the valuation of the teams is closer to the Kochi/Pune bids than the average person or even the MBA type knows. @inswing - the bid price is not to own the team for only 10 years. It is to own the franchise period. However payment is made in 10 equal instalments over 10 years! So for a paltry $35 mi/year Kochi/Pune gets a piece of one of the hottest properties in the WORLD. Probably one of the best values in sports anywhere in the world. Indian businessmen are know to be very "hard nosed". I'm sure they've run the numbers.

  • POSTED BY on | March 31, 2010, 1:25 GMT

    Forget about the franchise prices for now, I personnally feel that if the IPL doesn't increase its quota of international players allowed in each game then they may lose many very talented international players. The last thing you want is for the international players to be only the ones that have retired from international cricket and for the IPL to turn into a primarily Indian Domestic League, this will lead to a decline in viewership internationally. I understand the market in India is huge, but the big pull of the IPL in my opinion is that it brings the best international cricketers on the same stage often playing against their countrymen. This also places a strain on the franchises because they pay huge sums for some of these players and sit them on the bench for the bulk of the season possibly sacrificing the performance of the team.

  • POSTED BY malko2685 on | March 30, 2010, 22:51 GMT

    with out pakistani players ipl is worth nill for me,,it is not worth waisting 4 hours

  • POSTED BY on | March 30, 2010, 19:48 GMT

    Pakistan is the only country to have made it to the World T20 World Cup final twice and are current Title holders, we all pakiz hate i.p.l , i.p.l is getting failed without ''CHAMPIONS''...

  • POSTED BY SnowSnake on | March 30, 2010, 17:54 GMT

    What IPL lacks is professional management. It is a franchise that was developed on emotional basis and run on emotional basis. It is doomed to fail. If you carefully look at it, it is a sub-standard cricket which pays more money in 6 weeks than high quality international cricket can pay in entire year. The teams are filled with ametures who do not have a lot of international cricket playing experience and international players that are retired. Adding more teams is another egomaniac approach to increase survivability of a business model that is doomed. Companies betting on these teams are investing on egoistic decisions. It is a bubble indeed. It is going to pop and investors of the franchises will be loosers. The only winners are the players who will make the money while the franchises last.

  • POSTED BY rs.abhilash on | March 30, 2010, 17:12 GMT

    In country like India, where Bollywood and Cricket are main source of entertainment, and the huge fan following for both film stars and Cricketers is all together a new story. I think EGO is getting bigger than the business sense in IPL. However there is always an X-factor involved in turning an investment into lucrative business. In India language and region/state plays huge role, in case of IPL regionalism is the "X-factor". As long as regionalism is running high in the veins, I believe the franchises will make money, provided the team has some cricketing brains as well.

  • POSTED BY Lovetesh on | March 30, 2010, 16:15 GMT

    Just on the basis of a hypothesis that bigger city should have larger valuation, author is discarding the calculations of professional evaluators. Absurd. Useless article!!

  • POSTED BY on | March 30, 2010, 15:48 GMT

    Nice one this time, Its very important for the franchise to buy the players who are available for the full tournament otherwise it doesnt have any sense to spent the money on the some of the players who are not fully available for the tournament. One thing I like most is the your quote for the availability of 140 indian players, teams have to focus on the buying of some of the finest indian players available because at the last they need 7 good indian players to win the matches, the most good example is the 3rd season of the ipl where indian young players played well than the other overseas players. The old one like Hayden, Kallis and Gilchrist is not very good choice for any of the teams, but you doesnt say this for Tendulkar, because everyone wants him right now because of not of his game only but he is very popular in india and new teams need him for better publicity of their team. I think new teams are so much interested in buying him at any cost. lets see what happens in auction.

  • POSTED BY dhaval1984 on | March 30, 2010, 15:44 GMT

    @ASHOK MALIK

    SIR FIRST PLZ LET US KINDLY KNOW WT ARE YOUR CREDENTIALS TO ANALYZE BUSINESS DECISIONS OF THESE PEOPLE..WELL, ATLEAST IF I AM JUDGING RIGHT THAN YOU ARE NOT THE CEO OF ANY MARKETING GIANT...LOL

    I MEAN FOR THE FACT WE KNOW THAT THESE ARE ALL VERY WELL KNOW REPUTED BUSINESS PERSONS IN OUR COUNTRY..I DONT BELIEVE THAT THEY WILL BE INVESTING SUCH A HUGE AMOUNT OF MONEY IRRATIONALLY...

  • POSTED BY inswing on | March 30, 2010, 14:54 GMT

    Just for comparison, a small baseball franchise in the US, the Milwaukee Brewers, is valued at $350 million. Something close to Pune/Kochi. This includes a stadium worth $84 million, and ticket revenues of $61 million. IPL franchises have no stadium, and the average ticket prices cannot be more than Rs 150-200 ($3 to $4). (Brewers average ticket price is $20.) If they sell out a 40,000 seat stadium every single game at $4 per ticket, that is less than $1.3 million per team. How on earth do you value a franchise at $350 million? And remember that this price tag is only for 10 years of ownership!

  • POSTED BY inswing on | March 30, 2010, 14:42 GMT

    Within 5 years, more than one franchise will fold, or will be sold at much, much lower prices. Numbers do not add up. Remember that everything is driven by selling stuff. The highest revenue is from TV and other advertising. Advertisers will pay crores only if they are making profits in crores, and that will happen only if people are buying stuff worth tens of crores due to advertising. Just 7 weeks of ads does not move that much product in India. India has a large middle class who has some disposable income, but not *that much* disposable income. India does not have the US-like consumerist buy-buy-buy culture, yet, but the franchise evaluations and the money being paid to people are at US level. In 20-25 years, such numbers will be sustainable, but not now. No way.

  • POSTED BY Prakash.R on | March 30, 2010, 14:24 GMT

    Ashok, great article. Very thorough and informative, explains the IPL Economics in detail, from investors' and players' view. I am wondering what are those dynamics from the sponsors view, starting with DLF..Since they contribute to this IPL ecosystem, to the extent of tagging each activity in IPL with the sponsor's name, It would be interesting to know their Pay off. Over all, this is the best article on IPL as on date.

  • POSTED BY jedjfdp on | March 30, 2010, 14:21 GMT

    Good article!! Sad to see players like Laxman and Dravid getting sidelined.

  • POSTED BY ww113 on | March 30, 2010, 14:10 GMT

    As someone suggested on Page2 of cricinfo,they should simply give the trophy to the highest bidder.

  • POSTED BY Sankara on | March 30, 2010, 13:25 GMT

    Ashok, one additional point: From 2012, the central pool available for the franchaisees will drp from 80% to 60%. In all this, it is not just the franchaisees who are losing money. Sony has not made any money cumulatively on this either. It is not surprising that the worthy who took this burden on Sony is no more with the company. There are a couple of puzzles in the mddlle of this all. First, with all this money, silly cash as you call it, flying around,, BCCI made only abt Rs 15 cr in 08 according to their accounts. 09 would have been worse cos of higher costs in SA. Why is it going thru such a lot for so little? Second, IPL has racjed up 7K insurance policies for various contingencies. The way they have insured beats any logic. For instance over 4.5k is against injuries. while just abt 2 k is for life of players. never have I heard of life being worth less thn injury. No of injuries this yr, after the policies, has been phenominalcompared to previous yrs. is this a new cash stream

  • POSTED BY Rake1 on | March 30, 2010, 12:51 GMT

    good article. enjoyed reading it. cheers.

  • POSTED BY on | March 30, 2010, 12:48 GMT

    there must be some limitations and rules otherwise there will be too much corruption in future in IPL

  • POSTED BY on | March 30, 2010, 12:37 GMT

    What hasn't been investigated fully is the merchandising capabilities of the IPL teams. This will only be a matter of time I guess as they build an international following through having the IPL free to air in places like the UK on ITV4 and free to all on YouTube. For example the thousands of UK followers of IPL can't as yet simply go into their local sports store and buy a team jersey, caps, training gear, stickers, bags and with the right distribution network in place there are rich rewards to be had not only from Europe but also USA, Canada, Australia and Middle East.

  • POSTED BY Thunee_man_Naidoo on | March 30, 2010, 11:37 GMT

    I think that in next years IPL auction players should also get a significant say in which frachises they want to go to. I understand that "small-time" players who only have, for example, one year contracts, are lucky to be picked by an IPL team and should be happy to play for any team. But players, like Sachin Tendulkar, Shane Warne or Rahul Dravid, have really become the face of their respective franchises and it would seem odd to see them playing for another team. I can't imagine Lasith Malinga bowling for Kings XI or Matthew Hayden batting for Delhi.

  • POSTED BY uknsaunders on | March 30, 2010, 10:36 GMT

    While the article is right in most areas, I would disagree with the overseas player situation. Having watched alot of IPL 2010, it's clear that 4 good overseas make a massive difference to a side. Get the balance right and your halfway to winning the IPL. Likewise, with 2 new franchises entering, they will be keen to buy the best of whatever is available - so for the right overseas I think bidding will be fierce. Not only will established stars be in demand, but those who have performed well in the IPL without the star billing tag - Shaun Marsh for example.

  • POSTED BY FallsDown on | March 30, 2010, 10:07 GMT

    The IPL should seriously consider raising the number of permitted international players per playing XI to 5 or maybe 6, to ensure the cricket is of a higher standard than it currently is. If this is unabashed capitalism, nationalism should have less of a say in the matter.

  • POSTED BY rtom on | March 30, 2010, 9:47 GMT

    i watch IPL just because all my favourite players are in action. but as such i dont like it because it is not cricket. We in our villages used to play like this during our college days !! Its like another super - duper bollywood movie with actors in various colors. Its like GOVINDA's bollywood movie. Watch for 3 hours and forget what happened in that 3 hours.. I hope all this drama stops sometime in near future. Probably this is a way to amke black money into white ( For some people atlest !!)

  • POSTED BY jamrith on | March 30, 2010, 9:39 GMT

    @An Uglyhunk let us see Yusuf Pathan perform in T20 Internationals then I will be a believer. otherwise he is just an IPL-butcher to me, would love to be proved wrong.

  • POSTED BY on | March 30, 2010, 9:22 GMT

    The Mathematics of Big Numbers

  • POSTED BY on | March 30, 2010, 9:12 GMT

    The process of naturalization and possibility of dual citizenship should be adopted by these cricketers to become 'Indian' cricketers... tht cud b an interesting twist to the limits tht exists in team composition. unsure tho on the number of years that have to be accounted for the same!

  • POSTED BY Quazar on | March 30, 2010, 8:24 GMT

    Good article. "Irrational exuberance" has hit cricket too! Although it isn't quite as bad as the Internet bubble...the IPL franchises do generate substantial revenues. I don't expect Sahara and Rendezvous to make any profits even over 5-7 years, given their ridiculous bids...though they may be able to just about recover their investment over that period if the Indian economy keeps buzzing. But as Ashok rightly says "the decision to purchase a sports team is not always a rational one, driven by profit-loss calculations alone."

  • POSTED BY sam.suresh on | March 30, 2010, 8:06 GMT

    Too much information = Rubish......

  • POSTED BY AmarjitCricketFan on | March 30, 2010, 7:56 GMT

    WOW!! Askok i am very impressed by your facts and economic sense... Great article probably the first which actually explains the IPL. I think india doesnt have 140 'good cricketers' and i think there will be a time when money will win a competion. Because if a team was to have the best of the indians i.e dhoni, tendulkar, pathan etc. and have the top 4 international t20 players it would certainly give them a huge advantage for every tournament.

  • POSTED BY on | March 30, 2010, 7:10 GMT

    "Freedom of Investment"... not for returns, but for pride...

  • POSTED BY jamrith on | March 30, 2010, 7:08 GMT

    A crisp and clear piece of investigative sports journalism that raises many questions which can't , or rather won't, be answered by those who can. The brand valuation is plainly pie in the sky although I daresay the IPL supremo has some economics professors lined up to bolster his case. Again, the lack of transparency on the part of the franchises is staggering. Some of the franchises are owned by major corporates so how are they allowed to get away with this reticence regarding bottom-line performance. As for the teams owned by Bollywoodians and others ( such as the Kochi franchise owners) everyone knows that profit or loss is not an issue when the colour of the money is questionable. Finally, it does seem crass for a Union Minister to sit literally arm-in-arm with Lalit Modi, the same Minister who "facilitated' the award to one of the new franchisees.

  • POSTED BY on | March 30, 2010, 7:02 GMT

    @Madhavan, @Moin, let's not get carried away with Yusuf vs Laxman. The fact is Yusuf is better T20 player and we are talking about IPL here. Talent is not just scoring runs in Tests. One also needs talent to score runs fast. So, give credit where it is due

  • POSTED BY Knightriders_suck on | March 30, 2010, 7:01 GMT

    I did some basic math and this is what I figured out. Mumbai Indians Expenses 11.5 mn Franchisee fees 8mn Player fees 3-4 mn Ancillary charges

    So that is about 25mn in expenditure.

    Income Max pays 2B / 10 years = 200 mn / year = 16mn Ticket charge - Rs.1000 * 25000 * 7 = $4mn Sponsors - I guess around a mn (may be I am guessing too much)

    I don't think Marchandising revenue would be too much so discounting that.

    So looking at these figures even Mumbai is making a loss of around $3-4mn a year. Where is Sahara going to recoup it humongous costs? Unless the gate receipts go up I don't see a possibility of any of the franchisees going in black.

  • POSTED BY Rahul_78 on | March 30, 2010, 6:55 GMT

    Wonderful and very informative article. Ashok not only thorws up the numbing figures but provides insight behind them. War over sachin between billionaires will be something to watch out for. But the best thing IPL has done for indian markets is provide talented cricketers with a rich career alternative. Earlier these boys would be washed down the toilet of muddled and political favoring selction policies even for ranjit teams. Now if you have talent then it will get its due recognition. Also IPL will create lots of lucrative and rewarding job apportunity to indians and overseas pros in IT, marketing and many more fields. And for the purist complaining of the advertisements and everything that is not cricket in ipl..they shld look at the larger picture.

  • POSTED BY Monis-Iqbal on | March 30, 2010, 6:49 GMT

    Great article. IPL should be consider the removing the salary cap.

  • POSTED BY Croc_on_mara on | March 30, 2010, 6:07 GMT

    I'd pay a dollar to watch the collapse-show of this charade. The post-apocalypse cricket team emerging from this, I bet ya, will be the first truly jingoistic world beating act from the bulwark of the sub-continent. Till then, the shilpa-preity aunty show continues...ably supported by side actors Modi uncle, Shastri uncle and naughty-slow-cousin Danny Morrison. Next year it will be even more awesome. Assuming our neighbours are invited and the super-over gets replaced by a ball-chewing runoff, bidding wars will hit through the roof with teams vying for the most prolific ball-chewer. Needless to state, the winning player gets an additional endorsement from Vicco Vajradanti and Colgate toothpaste...

  • POSTED BY critic12345 on | March 30, 2010, 5:50 GMT

    The case will hold also for indian internationals. Ishant got a whooping 950000$ in 2008, will struggle to get a bidding this time. Sreeshanth could go to a base price for Kerala IPL team,if they intend to take him. Same would be the case for Parthiv, Tiwary and others like them. There are some players who have proved conistently in last 2-3 years like Yusuf Pathan, Raina , Manish Pandey, Pragyan Ohja, M Karthik, Naman Ohja,Dinesh Karthik could see a bidding war. Last time, the franchises went for names & reputation. I guess this time, they will be clear as to how to approach the auction. Bangalore has been the quick learner in 3 seasons, while chennai got away with in 2 seasons without bowlers, is now got napping. Before the season finishes , they will learn a thing or two.

  • POSTED BY Moin.Pasha on | March 30, 2010, 5:38 GMT

    "Overall, however, a situation where a Yusuf Pathan gets well over a million dollars, maybe close to $2 million, and a Laxman goes unsold is a frighteningly real possibility. The IPL has changed this game and its verities forever"

    This sums up the IPL.

    Gud article.

  • POSTED BY on | March 30, 2010, 4:59 GMT

    Wow..Thats a very nice and well written article- I did wonder about return on investment in IPL. In a investors world, equity appreciation is always a lure, but seldom a reality.

    And frightening facts of the game itself- The talented would not be the best paid. Hit hard. Hit them hard and go with the cash.... Thats the concept.Where else wud Yusuf pathan make more money than the talents of players like Rahul Dravid

  • POSTED BY redneck on | March 30, 2010, 4:42 GMT

    "How do you sell a business that is not making money or is barely in the black?" isnt that what we call goodwill? esentially any potential buyers isnt buying a stake of a team on its book value they are buying a stake in the brandname that could generate money down the track. thats how the accountents would treat the transaction anyhow!

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  • POSTED BY redneck on | March 30, 2010, 4:42 GMT

    "How do you sell a business that is not making money or is barely in the black?" isnt that what we call goodwill? esentially any potential buyers isnt buying a stake of a team on its book value they are buying a stake in the brandname that could generate money down the track. thats how the accountents would treat the transaction anyhow!

  • POSTED BY on | March 30, 2010, 4:59 GMT

    Wow..Thats a very nice and well written article- I did wonder about return on investment in IPL. In a investors world, equity appreciation is always a lure, but seldom a reality.

    And frightening facts of the game itself- The talented would not be the best paid. Hit hard. Hit them hard and go with the cash.... Thats the concept.Where else wud Yusuf pathan make more money than the talents of players like Rahul Dravid

  • POSTED BY Moin.Pasha on | March 30, 2010, 5:38 GMT

    "Overall, however, a situation where a Yusuf Pathan gets well over a million dollars, maybe close to $2 million, and a Laxman goes unsold is a frighteningly real possibility. The IPL has changed this game and its verities forever"

    This sums up the IPL.

    Gud article.

  • POSTED BY critic12345 on | March 30, 2010, 5:50 GMT

    The case will hold also for indian internationals. Ishant got a whooping 950000$ in 2008, will struggle to get a bidding this time. Sreeshanth could go to a base price for Kerala IPL team,if they intend to take him. Same would be the case for Parthiv, Tiwary and others like them. There are some players who have proved conistently in last 2-3 years like Yusuf Pathan, Raina , Manish Pandey, Pragyan Ohja, M Karthik, Naman Ohja,Dinesh Karthik could see a bidding war. Last time, the franchises went for names & reputation. I guess this time, they will be clear as to how to approach the auction. Bangalore has been the quick learner in 3 seasons, while chennai got away with in 2 seasons without bowlers, is now got napping. Before the season finishes , they will learn a thing or two.

  • POSTED BY Croc_on_mara on | March 30, 2010, 6:07 GMT

    I'd pay a dollar to watch the collapse-show of this charade. The post-apocalypse cricket team emerging from this, I bet ya, will be the first truly jingoistic world beating act from the bulwark of the sub-continent. Till then, the shilpa-preity aunty show continues...ably supported by side actors Modi uncle, Shastri uncle and naughty-slow-cousin Danny Morrison. Next year it will be even more awesome. Assuming our neighbours are invited and the super-over gets replaced by a ball-chewing runoff, bidding wars will hit through the roof with teams vying for the most prolific ball-chewer. Needless to state, the winning player gets an additional endorsement from Vicco Vajradanti and Colgate toothpaste...

  • POSTED BY Monis-Iqbal on | March 30, 2010, 6:49 GMT

    Great article. IPL should be consider the removing the salary cap.

  • POSTED BY Rahul_78 on | March 30, 2010, 6:55 GMT

    Wonderful and very informative article. Ashok not only thorws up the numbing figures but provides insight behind them. War over sachin between billionaires will be something to watch out for. But the best thing IPL has done for indian markets is provide talented cricketers with a rich career alternative. Earlier these boys would be washed down the toilet of muddled and political favoring selction policies even for ranjit teams. Now if you have talent then it will get its due recognition. Also IPL will create lots of lucrative and rewarding job apportunity to indians and overseas pros in IT, marketing and many more fields. And for the purist complaining of the advertisements and everything that is not cricket in ipl..they shld look at the larger picture.

  • POSTED BY Knightriders_suck on | March 30, 2010, 7:01 GMT

    I did some basic math and this is what I figured out. Mumbai Indians Expenses 11.5 mn Franchisee fees 8mn Player fees 3-4 mn Ancillary charges

    So that is about 25mn in expenditure.

    Income Max pays 2B / 10 years = 200 mn / year = 16mn Ticket charge - Rs.1000 * 25000 * 7 = $4mn Sponsors - I guess around a mn (may be I am guessing too much)

    I don't think Marchandising revenue would be too much so discounting that.

    So looking at these figures even Mumbai is making a loss of around $3-4mn a year. Where is Sahara going to recoup it humongous costs? Unless the gate receipts go up I don't see a possibility of any of the franchisees going in black.

  • POSTED BY on | March 30, 2010, 7:02 GMT

    @Madhavan, @Moin, let's not get carried away with Yusuf vs Laxman. The fact is Yusuf is better T20 player and we are talking about IPL here. Talent is not just scoring runs in Tests. One also needs talent to score runs fast. So, give credit where it is due

  • POSTED BY jamrith on | March 30, 2010, 7:08 GMT

    A crisp and clear piece of investigative sports journalism that raises many questions which can't , or rather won't, be answered by those who can. The brand valuation is plainly pie in the sky although I daresay the IPL supremo has some economics professors lined up to bolster his case. Again, the lack of transparency on the part of the franchises is staggering. Some of the franchises are owned by major corporates so how are they allowed to get away with this reticence regarding bottom-line performance. As for the teams owned by Bollywoodians and others ( such as the Kochi franchise owners) everyone knows that profit or loss is not an issue when the colour of the money is questionable. Finally, it does seem crass for a Union Minister to sit literally arm-in-arm with Lalit Modi, the same Minister who "facilitated' the award to one of the new franchisees.