Are big corporate going to line up for IPL team auction?

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Big corporates may buy franchises

With the January 19 player auction on the anvil, the IPLcommissioner Lalit Modi is busy sorting out last minute glitches.Talking to sportzpower, Modi revealed that the next item on theGoverning Council's agenda is the two fresh team auction process forwhich the base price is $225 million, "We are working on the date andshould be able to announce this very soon." Once the player auction iscomplete, all eyes will be on the two new franchise tender process. Itis believed that several big names have sounded out Modi, but he isnot revealing or confirming anything yet. While Anil Ambani owned ADAGis interested in the Ahmedabad franchise and Sahara boss Subroto Royis keen on the Kanpur team, Hero Honda MD and CEO Pawan Munjal in hispersonal capacity is also eyeing a franchise.
Since foreigners and MNCs are also allowed to purchase franchises,sources close to developments have told sportzpower that some bignames may test the waters. Sportzpower learns that diversified majorITC is a dead ringer for a franchise. ITC which is trying to move awayfrom its tobacco centric image by diversifying aggressively into FMCG,apparel and hotels is keen on picking up a team. The 1996 World Cupstaged in the sub continent had ITC sponsoring the tournament. It hadforked out Rs 42 crore for the branding of the tournament which wascalled Wills World Cup. While Wills is a tobacco brand, ITC hassmartly repositioned the brand with an apparel play - Wills Lifestyle.lately ITC has branched out aggressively into FMCG with the Fiama deWills branding, another play on the mother Wills brand. Further ITC isalso a big player in the food products market with edible oil, attaand the like. ITC has the cash to bankroll a franchise, as also themanagerial bandwidth to run a team. Last quarter alone, ITC delivereda net profit of Rs 1000 crore plus. Another key determinant for allseeking a franchise is the city that they will get. There has to besome sort of affinity or association with the city.
For instance, Reliance chairman Mukesh Ambani has Mumbai, Indiacements boss N Srinivasan has Chenna, Deccan Chronicle's Ram Reddy hasHyderabad, even GMR which owns Delhi Daredevils is building theinternational and domestic airport terminus in the capital as part ofthe airport modernisation programme. So, the question is which citywill ITC bid for. Kolkata where its headquarters Virginia House islocated is out since Shahrukh Khan owns KKR, that leaves Vizag andCuttack. Vizag appears to be a sure shot, for ITC has large businessoperations in the state including its tobacco and papewrboardsbusinesses. For Anil Ambani and Subroto Roy; Ahmedabad and Kanpur arepart of their spheres of influence, More importantly both players havemajor affiliations in these cities. Ahmedabad is where Anil Ambanitrained in the Reliance textile factories on his return from Whartonwhile Subroto Roy has his very base in Uttar Pradesh. Pawan Munjalwould have preferred Delhi because that is where Hero Honda isheadquartered, but he might have to settle for Gwalior or Dharamsalafor which franchises might be availabe.
It is also being speculated that the only other Indian player whocould be interested in a franchise is Bharti Airtel which has thecash, the management bandwidth and the branding power to establishitself as a team owner. Similarly, there is talk of a very largeforeign telecoms where a big Indian industrial house is a partnercould also be examining the franchise acquisition. Since the telecomsis Mumbai headquartered, it will have to look at Nagpur as afranchise. The Indian industrial behemoth may be keen to become acricketing A lister. The other possibility is of a fragmentedownership on the lines of Rajasthan Royals and Kings XI Punjab wherethere are multiple owners. RR for instance has NRI owners - ManojBadale, Suresh Chellaram, Lachlan Murdoch and Raj Kundra. Sources alsosaid that given the popul;arity of the event, some foreigners/MNCs maywell be keen to enter the fray, making it a first. Right now there areindividual owners and that may well change soon.
What is critical for the new team owners is the city or town that theywill be allotted. These centres like Vizag, Cuttack, Nagpur,Dharamsala, Gwalior, Kanpur need to have the infrastructurewherewithal and support system to qualify as a franchise. Airconnections, quality hotel accommodation, stadium lighting, state ofthe art stadia, logistical backing et al are key determinants. All theeight venues qualify on these parameters - Delhi, Mohali, Kolkata,Hyderabad, Bangalore, Chennai, Mumbai, Jaipur. The price of $225million for 10 years subsidised by broadcast revenues remains thebiggest deterrant. Remember that the most expensive franchise in 2007- Mumbai Indians paid half ($111 million) of the new reserve price.