Rs 3,235 cr paid for Pune, Kochi teams, almost as much as for all eight in 2008.
Speculation on who’d win the two new franchises for the Indian Premier League’s (IPL’s) fourth cricket season in 2011 came to an end, as both the Videocon Group and Adani Enterprises, touted as frontrunners, lost.
Instead, in a morning full of surprises in Chennai today, the Sahara Adventure Sports Group emerged top bidder, paying $370 million (Rs 1,702 crore) as the franchise price for Pune. This was 64 per cent higher than the base price set for the auction, at $225 million (Rs 1,035 crore).
The other franchise on offer was bagged by a Kochi-based consortium of businessmen, Rendezvous Sports World Ltd, which won the Kochi franchise for $333.33 million (Rs 1,533.3 crore).
For the first season, in 2008, when the existing eight teams were brought under the hammer, Reliance Industries had made the highest bid at $112 million (Rs 515 crore) for Mumbai Indians.
While the existing eight teams had been sold for a total of Rs 3,330 crore in 2008, the two new teams managed to bag Rs 3,235 crore for IPL. “This clearly shows IPL is recession-proof and I hope they will make good business,” said its chairman and commissioner, Lalit Modi.
He said five bidders had participated in the auction — Rendezvous, Sahara, Adani Group, VC Digital Solution (Videocon) and Amonar Pvt Ltd. The cities on offer were Cuttack, Ahmedabad, Nagpur, Dharamsala, Indore, Visakhapatnam, Pune and Kochi.
While the franchisee fee would be paid over the next 10 years by the winning bidders in equal instalments, both Sahara and Rendezvous are to also pay $37 million (Rs 170 crore) and $33.33 million (Rs 152 crore), respectively, as bank guarantees to IPL by Tuesday.
Sahara had placed competitive bids for three cities — Ahmedabad, Nagpur and Pune — and eventually chose Pune. The other bidders which showed interest for Pune was Amonar, which quoted $261.3 million (Rs 1,203.36 crore) and Videocon, joined by Bollywood superstars Saif Ali Khan and Kareena Kapoor, which quoted $319.9 million (Rs 1,471.5 crore).
The Adani Group had quoted $315 million for Ahmedabad.
Rendezvous World Sports had placed its bid for Kochi with consortium partners Pavinee Developers, Anchor Earth, Filmwoves and Anandshah Developers. “At present, Kerala does not have any cricket stadium, but Kerala Cricket Association has said they are in the process of building one. Till that time, the bidder (Rendezvous Sports World Ltd) will be provided with an alternative venue, anywhere in India,” said Modi.
He added that IPL would now feature 10 teams and a total of 94 games, from the existing 60 games. “The Twenty20 tournament will not see any more expansion in the near future. In fact, I don't foresee an expansion in many, many years to come but, then, you never know," Modi said. Now are there plans to hold the IPL abroad in future, although we will play exhibition matches in foreign countries, said Modi.
IPL had invited bids for the franchises for two new teams in February and was supposed to declare the winners on March 7. However, it had to modify its tender norms after getting only two bids for the two teams on offer. Most prospective bidders balked at the stiff financial terms of the earlier tender.
IPL later made three major changes for the new tender. The $100-million (Rs 460 crore) performance guarantee was brought down to $10-million (Rs 46 crore), to be given 24 hours before the bid. The bank guarantee, to be given within 48 hours of winning the bid, was brought down to 10 per cent of the winning amount, from 100 per cent earlier.
The most important change was the withdrawal of the net worth clause. In the earlier tender it was $1 billion (Rs 4,600 crore).