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IPL jackpot: Rs 7,090 crore for Lucknow, Rs 5,625 crore top bid for Ahmedabad

The IPL’s brand value, according to a Duff & Phelps estimate, had soared to Rs 47,500 crore in 2019 before taking a 3.6 per cent pandemic-induced hit to come down to Rs 45,800 crore in 2020.

Written by Shamik Chakrabarty | Dubai |
Updated: October 26, 2021 2:00:59 pm
The Indian Premier League (IPL) is set to have 10 teams from next year. (File)

ON A day when the Indian cricket board lined up an unprecedented windfall, their flagship tournament went truly global. At the auction to decide two new franchises in the Indian Premier League (IPL), Lucknow became the most-valued team ever and Ahmedabad got pocketed by one of the world’s leading sports investors.

The Sanjiv Goenka-led RPSG Group will be guarding IPL’s northern outpost after shelling out Rs 7,090 crore for Lucknow while private equity firm Irelia Company Pte Ltd (CVC Capital Partners) forked out Rs 5,625 crore to head west and make the world’s biggest cricket stadium at Motera their home.

The auction, which took place in Dubai, also underlined the phenomenal rise in valuation of the T20 tournament. In 2008, Mukesh Ambani had paid $111.9 million to buy Mumbai Indians, one of the most high-profile franchises in the T20 league. Thirteen years down the line, Lucknow went for a price nine times more than that.

The IPL’s brand value, according to a Duff & Phelps estimate, had soared to Rs 47,500 crore in 2019 before taking a 3.6 per cent pandemic-induced hit to come down to Rs 45,800 crore in 2020.

Speaking to The Indian Express, Sanjiv Goenka explained the fine print in his group’s bid. “You pay the BCCI Rs 700 crore a year and you will get Rs 390 crore a year from them by way of broadcast rights, sponsorships and all that. So you are effectively paying a net of Rs 310 crore from year two onwards,” he said.

Goenka made his first foray into cricket in 2016, owning the Pune franchise for a two-year period after the BCCI suspended Chennai Super Kings and Rajasthan Royals for some of their officials’ alleged involvement in betting and spot-fixing.

“It feels good to be back in the IPL. But this is just a start. We have to now get down to building a good team, a team that can perform well on the ground,” said Goenka, who owns the majority stake at ATK Mohun Bagan in the Indian Super League.

Explained

Now cricket’s prime event

The winning bids for the two new franchises show how the IPL has become the prime event in the cricket ecosystem, and underscore its economic model. From eight teams and 60 matches to 10 teams, 74 matches, the revamped tournament will test the international schedule.

Sports lawyer Nandan Kamath said the “two bids are high, even if you factor in the growth of media rights and sponsorship valuations over the next few cycles”. “But they are undoubtedly an affirmation of the IPL’s commercial trajectory. From RPSG’s point of view, this appears to be a long-term play after having tasted ownership for a couple of years with the Pune franchise,” Kamath told The Indian Express.

CVC is an international conglomerate with a strong connection to sport through previous stake-holding in Formula 1 and a recent minority stake in La Liga. Their cricket home would be the Narendra Modi Stadium, boasting a capacity of 132,000.

“The private equity firm CVC has already invested deeply in rugby and the IPL bid could be part of a trend. With the US sports market being mature, private equity portfolios are diversifying to sports with different audiences, such as rugby and cricket. These are perhaps seen as having higher growth potential in 7-10 year periods when CVC might look for an exit,” Kamath said.

Manchester United’s US-based owners, the Glazers, too were busy at the franchise bidding in Dubai, a day after United were thrashed 5-0 by Liverpool. But at Rs 4,180 crore for Ahmedabad and Rs 4,024 crore for Lucknow, they turned out to be one of the lowest bidders.

The other parties that took part in the auction were the Adani Group, Capri Global, Hindustan Times, All Cargo, Kotak and Torrent. It is learnt that Rhiti Sports Management was disqualified on technical grounds, and it was also late for the bidding process.

With the tournament’s ever-growing popularity in mind, the BCCI had decided to expand the IPL from 2022 onwards, adding two more cities to the roster. Their top officials were bullish about the future of the tournament after the high-stakes scramble between nine potential owners. Each of them eyed two cities and none of the bids were less than Rs 4,500 crore.

“It is heartening to see the inclusion of two new teams at such a high valuation, and it reiterates the cricketing and financial strength of our cricket ecosystem. True to IPL’s motto of ‘Where Talent Meets Opportunity’, the inclusion of two new teams will bring more domestic cricketers from our country to the global stage,” BCCI president Sourav Ganguly said in a statement.

“We had promised that IPL will be bigger and better from the 15th season and with Lucknow and Ahmedabad, we will take the league to different parts of India. The IPL has established gold standards for leagues across the world and remains a premium event on the sporting calendar as it has grown rapidly in a short span… the bids prove that interested parties have faith in BCCI and its hosting capabilities,” BCCI secretary Jay Shah said. —(With Mihir Vasavda/Delhi)

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