The IPL deals

Though BCCI had set up a governing council comprising senior members to overlook IPLs operations but with Modis consistent success in getting new partners on board (more than two dozen deals) who were bringing in big moolah (IPL is a $2-billion venture according to various estimates) and also in keeping the fans interest going,he was gradually given complete freedom to run the show. It is the boards reluctance to rein in Modi while he was on a money and deal-making spree,which eventually led to the current imbroglio.

Here is a brief history of IPLs three-year journey:

Dec 24,2007: Tender invitations for franchise bids published. A minimum bid price of $50 m set.

Jan 14,2008: Broadcast company Sony Entertainment Television (re-christened Multi Screen Media Pvt Ltd,later) and sports marketing company World Sports Group awarded the global media rights for $1.026 billion for 10 years.

Bids received from Shah Rukh Khan-owned Red Chillies Entertainment,real estate company DLF,Vijay Mallya-owned UB Group,media company Deccan Chronicle Holdings,infrastructure company GMR Holdings,Mukesh Ambaniss Reliance Industries,India Cements,Deutsche Bank,Emeralds Telecoms,film actor Priety Zinta,Emerging Media. The bids that werent accepted because they were late were: Sahara India,Future Group and ICICI Ventures.

Event production entrusted with well-known sports marketing,management and production company IMG; it later emerged that IMG was promised 10 per cent commission against the industry standard of 3-4 per cent. The contract was renewed a year later with significant reduction in the commission.

Jan 24,2008: Eight franchisees announced. The names and the bids include: Delhi: GMR Holdings $84 m; Mumbai: RIL $111.9 m; Chennai: India Cements $91m; Bangalore: UB Group $111.6 m; Mohali: a consortium led by Preity Zinta,at $76 m; Jaipur: Emerging Media $67 m; Hyderabad: The Deccan Chronicle $107.01; Kolkata: led by Shah Rukh Khan at $75.09 m.

IPL contracts top 80 players according to ICC rankings; auction of players is held in February 2008,a maximum of eight overseas players allowed per franchisee.

Real estate company DLF signed as title sponsor in a Rs 200-crore deal spanning five years. The other sponsors included Vodafone,Hero Honda,Citibank,Kingfisher Airlines and Pepsi. The deal size varied from $5-6 million. The web rights negotiated at $50 million to Canadian company Live Current Media Inc.

Sources of revenues identified: media rights,sponsorships,ticket sales,licensing,hospitality and merchandise.

In 2009,the league was taken to South Africa after the government expressed security concerns and its inability to provide enough security cover because of the coinciding general elections. The IPL management,read Modi,also forced broadcast partner MSM to re-negotiate the original deal of $1.02 billion for 10 years to $1.6 billion for the remaining years. Also,it would have to route the investment through sports marketing company WSG.

With no substantial dip in viewership or advertising,IPL management incurred losses of Rs 34 crore because of additional expenses. It still contributed Rs 202 crore to the BCCI state associations kitty.

In 2010,the third year began with a bang with Modi signing a flurry of deals. The broadcast deal was broken into two with entertainment-centric broadcast rights given to Viacom18s Hindi general entertainment channel Colors. Another ambitious deal signed with Internet giant Google for streaming live matches on user-generated content website YouTube. Rights for theatrical and public exhibition (such as inside hotels,clubs,airports,buses and trains,etc) of matches awarded to Entertainment and Sports Direct,which,in turn,signed up with UFO Moviez and Valuable Media for theatrical rights. These deals were expected to raise the revenues by almost 30-40 per cent against the previous year.

Bids for two new teams invited. Stringent conditions,such as a base price of $225 million,net worth of the entity bidding to be $1 billion and a bank guarantee of $100 million,placed.

Bidding process was cancelled on March 7,2010,the day the bids were scheduled to be opened. BCCI said because of stringent conditions only two bids were received from Mumbai-based Videocon Group and Ahmedabad-based Adani Group. Bids conditions relaxed to a bank guarantee of $50 million and fresh bids invited.

Two surprise winners in the fresh bidding process held on March 21. On April 11,Modi disclosed the names of shareholders in the Kochi consortium and also questioned their decision to give free equity to some members including Sunanda Pushkar,a close friend of Congress MP and then Minister of State for Foreign Affairs Shashi Tharoor.

A high-voltage drama ensued between the Kochi team and Modi camp,both alleging foul play. On April 18,Tharoor resigned and Pushkar gave up her free equity. The episode gave impetus to ongoing protests within BCCI to clip Modis wings.

First year concluded with a cumulative viewership of around 300 million,revenue of Rs 662 crore,which included Rs 202 crore given to 25 state associations (most headed by influential politicians) comprising BCCI. While the league incurred a loss of Rs 34 crore in 2009,its revenues went up to Rs 774 crore and the state associations still managed to get Rs 202 crore.