The next edition of the Indian Premier League (2022) will feature 10 teams. Eight months after the Board of Control for Cricket in India (BCCI) gave its approval to add two more teams to the league, bids have been invited through a tender process on Tuesday to kick-start the league's expansion plans.
"The Governing Council of the IPL invites bids to acquire the right to own and operate new teams proposed to be introduced to take part from IPL 2022 season," a BCCI statement said.
The Invitation to Tender has been made available for purchase till October 5.
Though the bidding regulations have not been made public yet, it is learnt that the base price for the new teams has been set at R2000 crore. This is a big jump from the R850 crores that Sunrisers Hyderabad, the last team to join IPL via a tender process, paid in 2012. The base amount reflects the latest benchmark set by Rajasthan Royals, who are known to be valued at R1850 crores after adding new investors--US-based RedBird Capital Partners, a couple of months back. While the Royals don't generate as much revenue as some of the more successful teams, a former IPL official who did not wish to be named said that the notional value of leading teams like Mumbai Indians, Chennai Super Kings and Kolkata Knight Riders would all be upwards of R2500 crores.
"We are expecting bids above R3000 crore for each team," a BCCI official who did not wish to be named said. "IPL is ripe for expansion. We have carefully built the brand over the years. Just the way the existing franchises have moved to profit-making, so will the new teams. IPL is a property to stay invested in."
For the BCCI, expanding its most profitable property signals windfall gains. More teams also translate into more matches and more media rights revenue. As reported in this space earlier, next year's IPL will be a 74-match tournament instead of the usual 60. The additional matches at current media and sponsorship rights adds up to over R800 crores of extra revenue.
"74 matches are what we are promising at the moment. When the new rights cycle kicks in 2023, we will try to expand to 94 matches a season, after consulting with other cricket boards regarding an expanded playing window," the BCCI official quoted earlier said.
The BCCI has made the Invitation to Tender more stringent this time. It is learnt that only companies with an annual turnover upwards of R3000 crore will be allowed to bid. Another condition that has been added to the bid document is a limit on not more than three businesses to come together to form a consortium.
In 2010, Sahara Warriors and Kochi Tuskers were added to the IPL fold for a massive R1700 and R1500 crores respectively. While Sahara withdrew after a year citing bank guarantee disputes with BCCI, the little-known Kochi consortium of seven separate investors remained neck deep in controversy. This team too lasted one season after their contract was terminated by the BCCI, which was then legally challenged. An arbitration award has gone against the board. The new teams are expected to be announced soon after scrutiny, well in time for the mega auction that is likely to be held in December.
The Ahmedabad-based Adani Group, who lost out in the 2010 bidding wars, are favourites to bid again. The RP Sanjiv Goenka group who owned the Rising Pune Supergiants franchise in 2016-17 also want to make a re-entry. The newly refurbished Narendra Modi cricket stadium in Ahmedabad and the Atal Bihari Vajpayee Ekana stadium in Lucknow are favourites to become home bases of the two new teams. The BCCI has a set list of cities from where the winning bidders get to pick one they want to call home. Apart from Ahmedabad and Lucknow that list includes Pune, Visakhapatnam, Guwahati and Cuttack among others. The full list of cities is not known.
1) Companies with an annual turnover upwards of R 3000 crore
2) Consortiums of not more than three business houses
Valuation over the years
IPL 2010 expansion (10 years)
Sahara Warriors -- R 1700 crore
Kochi Tuskers -- R 1500 crore
2012 (5 years)
Sunrisers Hyderabad -- R425 crore
2021 (base prize – R 2000 crores)