With two new franchises being sold-off at world-record beating rates, Lalit Modi’s utterly raucous IPL takes leaps towards becoming the world’s largest sporting behemoth. Illogical? Yes, talk to his hand...

Three years back, owners of the noted English Premier League club paid Rs.1,511 crore to purchase Liverpool, a top name in the EPL for some years now, with stars bought for multi-million dollars like Steven Gerrard (from England), Daniel Sánchez Ayala (from Spain), Javier Mascherano (from Argentina), et al. That was considered one of the biggest deals in the world of sports. A repeat occurred in India last month, when all those present in a five-star hotel ballroom in Chennai were struck with two big surprises. Any observer in all his honest self would confess that none expected the influx of funds to reach such an unimaginable magnitude. So much so, even IPL’s Godfather Lalit Modi (“Commissioner,” if you insist) could not disguise his surprise. “This is a super duper Sunday for BCCI and IPL,” said a beaming Modi. He further admitted that he was expecting much less for each franchise and not Rs.1,702 crores and Rs.1,532 crores that the Pune team and Kochi team respectively received (a total of Rs.3,235 crores for the two). And Union Minister Shashi Tharoor’s involvement adding no less to either the hype or the valuations (Tharoor apparently doesn’t have any vested business interests in the IPL format. Lalit Modi has commented in the past, “Tharoor’s role is not that of an investor... He is a cricket enthusiast and always wanted an IPL team in his State”). In short, individually, both these teams were worth more than the famous Liverpool Football Club.

Nothing surprising there, till you realise that unlike the English club, which had well-acclaimed stars during to boast about during the bidding process, nothing was/is known about the names of the Pune and Kochi IPL players – beat that for speculation and illogic! But talking to the hand doesn’t stop there.

Even when you look at the current IPL contracts, when all the teams were first put up for sale in 2008, the eight franchises were sold for Rs.2,853 crores, much lower than what the two new teams (as a combine) fetched in this auction. According to a BCCI official, there were five bidders this time for the two new teams, namely, Sahara Adventure Sports Group, Rendezvous Sports World Ltd., VC Digital, Adani Group and Aman Vohra. Out of these five, Subrata Roy-owned Sahara bagged Pune and little known Rendezvous caught hold of Kochi. We are given to understand by insiders that the Pune franchise will most likely come out with its IPO in 2013. If you thought that was exaggeration, the BCCI official also reveals, “Already, one of the major football clubs from England has shown some interest in investing in the Pune franchise. This clearly indicates that Sahara is already looking for investors and can’t swallow a monster like an IPL franchise on its own.” If you thought you understood Sahara, then Rendezvous springs up the opposite surprise – till date, most can only guess which parties actually make up this group. We’re told by people close to the facts of the deal that Rendezvous is a consortium formed by Vivek Venugopal, Mukesh Patel, Ravi and Shailendra Gaekwad, Anchor Switches, Rosy Blue Diamond, Anchor Earth Pvt Ltd and Parinee Developers. A pure conjecture? Perhaps. But not without basis.

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Source : IIPM Editorial, 2010.

An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).

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