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Market forces, highest bidders to determine IPL cities

Market forces, highest bidders to determine IPL cities
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First Published: Wed, Jan 23 2008. 01 02 AM IST
Updated: Wed, Jan 23 2008. 01 02 AM IST
By Thursday evening, cricket fans will know which eight cities will snag a team of the Indian Premier League (IPL), the Twenty20 tournament already attracting speculation among brand promoters, talent scouts and even a betting firm in the UK.
IPL will be run on the franchise model, with teams owned by corporate houses or individuals and named after a city. Apart from Indian stars, top international cricketers have been contracted.
Officials at the Board of Control for Cricket in India (BCCI), promoters of the league, will begin assessing bids for teams at 2pm at the board’s Mumbai headquarters. A bidder can target two cities; “over 40 bid” documents have been placed so far, says a person associated with the league.
BCCI has identified 12 cities: New Delhi, Mumbai, Kolkata, Chennai, Bangalore, Hyderabad, Gwalior, Kanpur, Mohali, Jaipur, Ahmedabad and Cuttack. The eight cities attracting the highest bids will be selected. Mumbai is believed to be the most sought after, being eyed by large corporate houses such as the Reliance Anil Dhirubhai Ambani Group and Videocon Industries Ltd.
“The choice of cities is based on market forces,” says Balu Nayar, managing director of the Indian operations of International Management Group, the sports and entertainment events management firm advising BCCI on IPL. “Cities having the highest value will be selected.”
Nayar expects the appraisal to be over by the evening, unless there’s a tie between two or more bidders. In that case, second bids will have to placed then and there, he says.
Despite a reserve price of $50 million (Rs197 crore) for an IPL team, the sheer number of bids placed reflects the faith companies have in the tournament, scheduled to begin in April. Videocon, for instance, is bidding for Kolkata, apart from Mumbai.
“It’s a great brand equity,” says Videocon chairman Venugopal Dhoot. “We see it as having great valuation. You can’t guess what will happen in advertising, but you have to advertise… We are hopeful.”
Tushar Chhabra, head, advisory services at Delhi-based consultancy Elite Wealth Management, has advised two of his clients to bid for an IPL team; to him, it makes sense to cut advertising budgets and buy a team instead. “The cost benefits have been worked out, we have sent cash flows, analysed media coverage.”
Already, London-based betting firm William Hill says it’s going to offer odds on IPL matches. Betting is illegal in India, but spokesperson Rupert Adams says he has no doubt the league would find takers in the Indian diaspora.
“Obviously, it’s not the same as the Ashes or an India-Pakistan series, but IPL has got some very fine players, there will be television coverage, and anyone interested in cricket will be interested,” he says.
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First Published: Wed, Jan 23 2008. 01 02 AM IST