The two new IPL teams — New Rising and Intex — will have to shell out close to Rs 90 crore each season and as they own the franchise for just two years, their tryst with the league will be more of a brand-building exercise to get a foothold in cricket.
The two new teams won’t be receiving the Rs 70 crore from the central revenue pool, moreover, they have to pay Rs 16 crore (New Rising) and Rs 10 crore (Intex) every year as per the reverse bidding process adopted.
In addition to this, the teams will have to shell out close to Rs 66 crore — the salary cap — for buying players and will also have to pay for stadium management to the host cricket association, travel and lodging of the players, payments to support staff, marketing. While revenue will come from sponsors and prize money it will still result in the teams spending Rs 80 to Rs 90 crores.
Keshav Bansal, the owner of Intex, said, “When you look at travel and logistics and other costs, including those on players, plus we will be paying the BCCI, I think the outlay involved can go upto to Rs 90 crore to Rs 100 crore.”
Bansal said that as the teams had only two years, the idea would be to minimise costs. “The idea will be to minimise losses, it is a short period of time. We want to have an association with IPL and this is a good start. If we come to know that the BCCI wants to continue with these teams or have more teams in the IPL we will be happy to be associated with the IPL in the future also,” Bansal, who has specialized in accounting and finance at the University of Manchester said.
The teams will also have to pay close to Rs 30 lakh to the host association for each of their home games. They can expect to earn about an estimated Rs 20-30 crore from sponsorships. Even taking into account the earnings from ticket revenue, they will earn only about Rs 45 crore per year.
The teams were sold through the reverse bidding process. The base price was set at
Rs 40 crore and the lowest bidders were awarded the franchises. Both Intex and New Rising made negative bids, which
means they will have to pay the BCCI that amount too.
Talking about why he put in a ‘minus’ bid for Rajkot, Bansal said, “I knew the competition for Rajkot will be intense and hence we had to go aggressive and remain positive. Everyone wants to get associated with IPL. For Vizag and Kanpur we have put in a positive bid and Rajkot we had put in a negative bid,” Bansal added.
The other three bidders were Harsh Goenka of RPG properties, Axis Clinical and Chettinad Cement. Incidentally all of them quoted higher bids than New Rising and Intex Mobiles.
IPL from April 9 next year
The next edition of the Indian Premier League (IPL) will be held from April 9 as two new franchisees – Rajkot and Pune – were added to the event as replacements for Chennai Super Kings and Rajasthan Royals. The tournament will begin five days after conclusion of the ICC World Twenty20 which will also be hosted by India. The ninth edition of the hugely-popular but controversy-marred League will conclude on May 29.
The new teams will pick from among players, who were part of CSK and RR. Players from CSK and RR will be divided into two groups of capped and uncapped and the top names will be sold through the draft system.
The two new teams will have a minimum of Rs 40 crore and a maximum of Rs 66 crore to buy their players. The cricketers who will remain unselected will go to general pool to be available for fresh auction, scheduled for February 6 in Bengaluru. The BCCI also announced that the franchise workshop will be held in Srinagar on January 13 and 14.