$225m base price for two new IPL franchises

The IPL will include two more teams from the 2011 season and will auction the franchise rights at a base price of $225 million, the league's commissioner Lalit Modi announced on Thursday. That figure - double of what the most expensive franchise was sold for in 2008 and more than four times the base price in that first auction - is, in an uncertain market, a sign of the league's confidence in itself and the Twenty20 format.

That valuation is all the more surprising given that the franchises will almost certainly be based in relatively small markets - the metros and bigger cities already have teams. The favourites to be host cities for the two teams are Ahmedabad and Lucknow.

However, signs of the IPL's growing net worth were evident in February when Rajasthan Royals, the then IPL champions, sold a 11.7% stake in their franchise for approximately US$15.4 million. That put the valuation of the franchise at around $140m, more than double the $67m paid for it a year previously.

The league's expansion will see a much longer fixture list - 94 games as opposed to 59 in the first two seasons if the format remains the same - and accommodating it in the 45-day window without compromising players' fitness, and keeping the international calendar in mind, will be a challenge.

Modi's announcement followed a meeting of the IPL's governing council at the BCCI headquarters in Mumbai that was also attended by board president Shashank Manohar and secretary N Srinivasan.

He announced details of next season's league, which will begin on March 12 in Hyderabad - home to the current champions, the Deccan Chargers - with the final and the third place play-off on April 25 at the D Y Patil Stadium in Navi Mumbai. The semi-finals will be held in Bangalore.

Another important decision taken today was to remove the two-player cap on centrally contracted Australian players in each IPL team. The cap had been in response to Cricket Australia's concern of an exodus from its pool of contracted players when the league started.

Modi also said he had received requests from 12 Pakistan players to be part of the auction for the third IPL on January 19. Each team has been allotted $750,000 to make new signings at that auction.

The player auction for the fourth IPL will take place after the Champions League in the third or fourth quarter of 2010. The process for the players would be on the same lines as during the inaugural edition but said only "certain" players would be bid without going into much details. "The current franchises would be allowed to keep a certain number of players, the modalities are being worked out."