BCCI eyes big moolah from auction of two new IPL teams

Bids below the minimum amount of Rs 2000 crore will be rejected at BCCI's sole discretion and no reduction will be made to the amount even if the event format changes

e4m by Javed Farooqui
Updated: Sep 16, 2021 2:22 PM
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The Board of Control for Cricket in India (BCCI) is eyeing a windfall gain from the auction of two new Indian Premier League (IPL) franchises. The board has set a base price of Rs 2000 crore for each franchise. At the base level, the BCCI is assured of getting Rs 4,000 crore from the auction of two new franchises.
The BCCI has made it clear that bids below the minimum amount of Rs 2000 crore will be rejected at its sole discretion. It also clarified that no reduction will be made to the minimum bid amount even in the event of a change in the format of the league, including the reduction in the number of matches to be played.

Subject to the successful allotment of two new franchises, the IPL will comprise 10 teams and a minimum of 74 matches from the 2022 season onwards. Star India, which owns the IPL media rights, will have to pay a higher fee to the BCCI for the 2022 season, which is also the last and final season of the current media rights cycle. The BCCI is planning to auction the next cycle of IPL media rights early next year.

As per the agreement between BCCI and Star India, the board had received Rs 4086.87 crore of the media rights payment in the first year and will receive Rs 3065.15 crore each in the subsequent years. In September 2017, Star India had paid Rs 16347.5 crore to acquire IPL media rights for five years till 2022.
For IPL 2022, Star might have to cough up an additional Rs 715.2 crore for the additional 14 matches, at Rs 51.08 crore per match. With a Rs 3065.15 crore payout for 60 games, Star is paying an estimated Rs 51.08 crore per game for the IPL. 
As per the bid document, the average net worth, as well as the average turnover of each bidder for the last three years, must be at least Rs 3000 crore. In case of a consortium bid, the average net worth and turnover for the last three years of each member of the consortium must be at least Rs 2500 crore.

Each prospective bidder will be required to provide a bid security deposit of Rs 75 crore. The BCCI will return the bid security deposit to all unsuccessful Bidders without interest to such bidders. A bidder may bid for one or more of the new franchises/stadiums but will be granted rights in relation to one franchise or stadium.

Bidders are not entitled to withdraw the bid after submitting it to BCCI and any withdrawal of bid will be considered as a breach. In case of bid withdrawal after submission, the BCCI will be entitled to forfeit the bid security deposit.

The cities on offer for bidding include Ahmedabad (Narendra Modi Stadium), Cuttack (Barabati Stadium), Dharamsala (Himachal Pradesh Cricket Association Stadium), Guwahati (Barsapara Cricket Ground), Indore (Holkar Stadium), Lucknow (Atal Bihari Vajpayee Ekana Cricket Stadium). Ahmedabad and Lucknow are considered to be the frontrunners for hosting the two new IPL teams.

The Narendra Modi Stadium in Ahmedabad is the biggest stadium among the new franchise cities on offer with a seating capacity of 1,12,650 including 6,562 hospitality seats. Lucknow's Atal Bihari Vajpayee Ekana Cricket Stadium is the second biggest among the six cities, with a seating capacity of 48,798 and 1074 hospitality seats.

Gautam Adani of Adani Group and Sanjiv Goenka of the RPSG Group are believed to be in the fray for owning a team. It is pertinent to note that Goenka had in the past taken the franchise rights of Pune for two years. The names of some big celebrities backed by financial investors is also doing the rounds.

As per the timelines proposed in the tender document, the last date for seeking clarifications is 21st September. The last date for purchasing the tender document is 5th October. The date for submission of bid documents and financial bids is 17th October.

Bidders are required to depute a properly authorised signatory to personally attend the bid opening on 17th October at a venue which will be announced in due course. The BCCI may waive the requirement of personal attendance in case any restrictions are imposed by any governmental authority.

The bid document states that a winning bidder will have to incorporate a company in India within 30 days from its selection, in case it doesn't have a company incorporated in India. Further, if the bidder relies on the turnover or net worth of the parent company or subsidiary company or group company of the bidder, the BCCI reserves the right to require such company to guarantee the obligations of the successful bidder including by becoming a confirming party to the franchise agreement and being jointly or individually liable for the obligations of the new franchisee.

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