IndiaPost.com - Tycoons, film stars buy up IPL teams for hefty amounts

MUMBAI: Seeking to cash in on the cricket craze in India, corporate bigwigs, including Mukesh Ambani and Vijay Mallya, and celluloid stars Shah Rukh Khan and Preity Zinta won sponsorship for high profile teams for the upcoming Indian Premier League.

In the process, IPL is richer by a whopping about Rs 3,000 crore or USD 724 million even before it launches its Twenty20 tournament in April that would feature the most prominent cricket stars across the globe, including Aussies captain Ricky Ponting and India's M S Dhoni, who are out to battle in the tri-series next month.

India's wealthiest corporate house Reliance Industries promoter Mukesh Ambani was the top bidder with an offering of USD 111.9 million or over Rs 440 crore to bag Mumbai team defeating liquor giant Vijay Mallya, who won the Bangalore team for just three lakh dollars less.

However, India leading private sector lender ICICI Bank, retail giant Future Group and Sahara group, the current sponsor of the Indian cricket team, failed to get a pie of the tournament that is being structured on a corporate pattern.

Announcing the details of winners for the eight team whose sponsorship was up for grabs, BCCI Vice President Lalit Modi, credited for bringing in unheard of riches for BCCI, said, "It was a great success. There were eleven eligible bidders for eight of the 12 cities.

There were more than one bid for each city and Mukesh Ambani's successful bid of USD 111.9 million for Mumbai region was the highest." The eight successful bids, for a period of 10 years, have enriched the BCCI's already swelling coffers and added to its share of the media rights sold for USD 1.026 billion, it would fetch the Board USD 100 million annually, according to BCCI secretary Niranjan Shah.

Actor Shah Rukh Khan, along with Juhi Chawla and Jay Mehta, won the bid for the Kolkata team for USD 75.09 million. Fellow actor Preity Zinta and her boy friend Ness Wadia won the bid for the Mohali team for USD 76 million. The other winning bids were by Deccan Chronicle for Hyderabad (USD 107.01 million), India Cements for Chennai (USD 91 mn), GMR Holdings for Delhi (USD 84 mn) and Emerging Media for Jaipur (USD 67 million).

The base price for each bid was USD 50 million and the lowest, by Emerging Media, exceeded it comfortably. "There was good response. Three companies - Anil Dhirubhai Ambani Group, DLF and Duetche Bank - could not win any franchise while three others - Sahara Hospitality, ICICI Ventures and Future Group - did not submit the bids in time," Modi said.

"We had received such a big response because of the world class product we have built up in consultation with IMG. The bidders had the appetite," the BCCI official said. "We will soon announce the schedule of the tournament which starts on April 18. Matches will be held on every Saturday and Sunday and midweek over 44 days.

Players auction would take place next month after consulting the franchise winners," he said, adding 80 players have already been signed up for the Twenty20 League. Modi did not see any conflict of interests in N Srinivasan's India Cements Group entering the bid despite his presence on the IPL Board. "India Cements in a publicly traded company.

Srinivasan is there on the IPL Board as he's the treasurer of the BCCI. Once his term ends in September, he will not be on the IPL Board. There are no issues here," Modi said. Modi, also the Chairman of the IPL Governing Council, denied that he had any interest in the Emerging Media which won the bid for the Jaipur region.

He said that the tournament would be run on the International Cricket Council rules and under the ICC's jurisdiction. "It will be run under the ICC Rules. ICC umpires would officiate and Anti-doping and Anti-corruption measures adopted by the ICC would also be put in place," he said.

"Each match would be telecast live on SET Max channel of Sony Television who have won the media rights with World Sports Group," he said. "We are also looking out for title sponsors.

It will be finalized in the next few weeks and there would be 4-6 sponsors," Modi explained. As far as the revenue break-up was concerned, Modi said the team franchisees would rake in the entire local revenues like local sponsorship, gate money and sale of team merchandise.

"Out of the central revenue, they will get 80 percent of media rights in the first five years and 60 per cent in the next five. They will also get 60 percent of sponsorship rights for the entire ten years," Modi elaborated.