For the second time in as many months, the BCCI's mandarins will assemble on Thursday in an attempt to find a new franchise owner for the IPL. Their last attempt was foiled when the owners of Deccan Chargers rejected the sole bid by PVP Ventures to take over the then beleaguered (and now terminated) Hyderabad franchise on September 13, and the BCCI would be hoping Thursday does not see a repeat.
It's unlikely the new invitation to tender - floated by the board on October 14 after India's Supreme Court upheld Chargers' termination - won't attract bidders. When the BCCI top brass meet in Mumbai on Thursday, they would be hoping to have "at least three" bidders for the new IPL team that would feature in at least five editions of the tournament from the 2013 season. "Around half a dozen tender documents have been bought by prospective owners, so it cannot be said that the response has been negative," a BCCI insider told ESPNcricinfo.
The lower base price is expected to draw more interest from bidders. When the Sahara group bought the Pune franchise in 2010, the base price was $225 million for 10 years. It was learnt that this time, the BCCI has set the base price at Rs 60 crore ($11.2 million) per year for a period of five years.
Though the BCCI bigwigs were tightlipped over the expected winning bid amount, a market expert, requesting anonymity, said he "won't be surprised if the winning bid is around Rs 600 crore ($112 million) for five years".
Recently, Kamla Landmarc group had offered to buy Chargers hours before they were terminated for Rs 1250 crore ($231.5 million) payable over ten years, according to Ajay Vazirani, senior partner of Hariani & Co, legal advisors to the group.
"If the base price is lowered, then it will certainly become an investor-friendly entity," Prahlad Kakkar, the leading ad filmmaker, said. "What has been happening till now is the cost of the team is so high that the only option to make money is to sell the team. A lowered base price suddenly makes it more viable for a lot of investors."
The tender had invited bids with respect to 12 cities: Ahmedabad, Cuttack, Dharamsala, Hyderabad, Indore, Kanpur, Kochi, Nagpur, Noida, Rajkot, Ranchi and Vizag. Among those who will most likely submit their bids are PVP Ventures, whose efforts to buy Chargers last month went in vain. And don't be surprised if the Ahmedabad-based Adani group and Noida-based Jaypee group end up bidding for their home cities. However, with the BCCI having imposed stringent measures when it comes to the termination clause by adding a performance deposit, investors will think long and hard before bidding for the team.
Meanwhile, the IPL governing council, which meets on the sidelines of the bidding process, will discuss a host of matters regarding IPL 2013. The main issue will be to decide the fate of the Chargers players. The governing council could decide to send all those players back into the auction pool.
At least three bids expected for new IPL franchise
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At least three bids expected for new IPL franchise
