Mumbai / New Delhi: It was a good day at the office for Indian cricketers who attracted, on average, higher bids than their foreign counterparts on Wednesday when the eight franchisees of the Indian Premier League participated in an auction in Mumbai to pick players from a universe of 77.
With some players attracting four times their reserve prices, sports marketers predict there is no way team owners, who have already paid $724 million (Rs2,910 crore) to own teams or franchises, will be able to recoup their investment in the near future. By the end of eight rounds of bidding, the teams had bid a total of $38.28 million (Rs153.9 crore) for 67 players, an average of $571,343 (Rs2.3 crore) a player.
The Great Indian Cricket Bazaar (Graphic)
Bidding for the remaining 10 players, including Australia’s Glenn McGrath and Mike Hussey happened later. Under terms of the bidding, the teams could bid below the reserve price for these players. Of this Mohammad Yousuf and Ashwell Prince were withdrawn from the auction, Mike Hussey went for $100,000 (Rs40 lakh) over the reserve price, and the rest were bought at the reserve price. In all, the auction raised $40.08 million (Rs161 crore) and 75 of the 77 players on offer were snapped up by the teams.
The investments, both in teams and players, seem “insane” to sports management firm PDM India’s chief executive Devraj Sanyal. “If the teams had gone for $50-60 million, I’d say they would have broken even in five years,” he said. “Now, it’s insane, I see no breaking even in the foreseeable future.”
To be sure, some owners have already described their decision to invest in teams and players as one driven by the desire to build up corporate image rather than earn handsome returns, if any at all.
Sanyal said the only tangible return that the franchises could hope for was from television revenues, at about Rs20 crore annually. The rest of the investment will have to be recovered through other avenues such as merchandising of team memorabilia, ticket sales and hospitality—none of which guarantee good returns. “This is not an ROI (return on investment) model for a quick turnaround, it’s a long-term business model.”
In the morning, actress Preity Zinta, sporting dark glasses and accompanied by industrialist fiance Ness Wadia, arrived in a black Lexus to bid for players for the Mohali team, which they own. Also present at the bidding were some of the so-called icon players who will be part of the respective teams, including Rahul Dravid for Bangalore and Sourav Ganguly for Kolkata.
The bids represented the player fee per season to be paid by the franchise to the player for each of the seasons 2008, 2009 and 2010. The amount will be scaled down if players are not available for the entire season.
India’s one-day skipper Mahendra Singh Dhoni, who was picked up by India Cements Ltd—owner of the Chennai team—for $1.5 million (Rs5.85 crore), nearly four times the reserve price of $400,000 set for him, will earn about Rs17.55 crore in the next three years.
Five Indian players—Sachin Tendulkar (Mumbai), Sourav Ganguly (Kolkata), Rahul Dravid (Bangalore), Yuvraj Singh (Mohali) and Virender Sehwag (Delhi)—were declared “icons” and kept out of the auction process. They will receive 15% more than the highest paid player in the team.
One of the biggest stars to lose out was Hyderabad captain V.V.S. Laxman, who was sold for $375,000 after IPL authorities turned down the team owner’s request to grant him an “icon” status. However, P.K. Iyer of Deccan Chronicle Holdings that owns the team, said the veteran batsman turned down the iconic status to give the team a larger budeget to work with. “He gave away his iconic status in the interest of the game,” Iyer said. Australian Andrew Symonds was bought by Deccan Chronicle Holdings for its Hyderabad team for $1.35 million (reserve price: $250,000). Symonds was the at the centre of a controversy recently after accusing Indian spinner Harbhajan Singh of passing racist comments, a charge that almost led the Indian team to return home during the current tour down under.
“Yes, there could be a significant number of Indians who may not like it, but at the end of the day, performance matters, and he’s one of the best in the world today. It’s like (Portugal’s Christiano) Ronaldo getting (England’s) Wayne Rooney thrown out at the last World Cup, yet returning to play the English league and becoming one of the most respected and highest-paid player in England,” said M.K. Machaiah, general manager of media buying firm Mindshare.
Yousuf’s withdrawal may have been prompted by the fact that he is still embroiled in a legal battle with the Essel Group, which runs rival Indian Cricket League. He had originally signed up with ICL but then switched allegiance to IPL, wh-ich has official sanction as it is promoted by India’s top cricket administrative body BCCI.