The Indian Premier League (IPL) is all gearing up for an extension as two new teams are likely to participate next year. IPL remains not only a lucrative tournament for the players involved, but also the franchise owners as it yields a massive amount of income. Hence, with BCCI set to inject two new franchises, there should be more influx of money and it is interesting to note the cost of those.
The eight IPL franchises are amongst the highest-valued sports teams in the world. Chennai Super Kings, Royal Challengers Bangalore, Mumbai Indians, Kolkata Knight Riders have topped the charts, while Rajasthan Royals and Sunrisers Hyderabad are at the bottom half. As far as the new franchise’s cost goes, the base price could be USD 250 million (INR 18500 crore), while the final cost is likely to be USD 300-400 million (INR 2200 crore to INR 2900 crore).
N Santosh, the managing partner of D&P Advisory, underlined that new teams would be upwards of USD 300-400 million and spoke of Rajasthan Royals, which already has a higher value. Santosh remarked that an average team should cost USD 300 million and that factoring Ahmedabad, where the largest stadium is located, one franchise could be USD 400 million and another for USD 350 million.
“We always knew that the new teams would be upwards of USD 300-400 million. Look we are talking of RR, which is not one of the highest-ranked franchises, going by different IPL parameters. If its value is USD 250 million, it is only good news for the BCCI. In that perspective, the BCCI would be looking between USD 300-400 million. We were anticipating that six months back. With RedBird, that estimation gets reaffirmed. An average team now should cost USD 300 million, so the new team should be around 400 million (about Rs 3000 crore). If we also factor in the Ahmedabad point, the largest stadium in the world, there could be a chance of a huge gap between the price of the two new teams – one may go for USD 400 million and another for USD 350 million,” Santosh said as quoted by Times Now.
How the BCCI will manage the sale and orchestrate the hype is important: Sources talk about cost recovery of two new IPL teams
Sources claim that owners can claim 150-200 crores in the first ten years, while some losses are imminent. It also said that media plays a significant role in creating hype about the teams and BCCI’s point of sale would be equally important.
“He can recover around Rs 150-200 crore out of that in the first 10 years when some losses are inevitable. He will keep making the moolah after 10 years,” the source says adding, “The key to getting a good price is telling the world that more parties have interest. If a potential bidder is made known that the biggest business houses have purchased the tender document, the price will automatically shoot up. The media plays a big role in creating the hype. How the BCCI will manage the sale and orchestrate the hype is important,” the sources claimed.