Expect stake and outright sales in IPL now

NAKED EYE

New Delhi: So, King Khan, Shahrukh Khan has finally had enough of IPL.And more importantly, he cannot make promises anymore because he haslost the moral right. Enough of Kolkata Knight Riders after threeconsecutive seasons of unmitigated disastrous performances. SRK feelsawful for Kolkata and his sponsors. Remember that Nokia forked out thehighest amount as lead sponsor of KKR, in excess of Rs 45 crore forthree years. Brand SRK can sell everything and anything. After all heis known as Khan Market, a tony high street destination in southDelhi. But managing KKR has been a lesson for him. Maybe that is whyhe is acutely hassled, after all running a sporting franchise requiresmanagement bandwidth. Red Chillies can do without this headache forthe time being is his present state of mind and thinking.
As season three comes to an end, get ready for a shakeout in IPL.Notwithstanding the current controversy surrounding the Kochifranchise, several promoters of the existing franchises may be lookingto partly or wholly exit from their investment. As sportzpower hasreported in the recent past, Kings XI Punjab's sale has more or lessbeen finalised for $300 million to an undisclosed buyer.Confidentiality agreement, you know. Mohit Burman, co owner of thefranchise has clearly indicated to sportzpower that the suitor isneither Videocon or Pawan Munjal of Hero Honda.
Similarly, a big north Indian newspaper magnate may be contemplating ajump into IPL mania. with an acquisition of a north Indian basedfranchise. The newspaper magnate is believed to be part of aconsortium which may well include a two wheeler automobile major aswell. The two wheeler major is already lead sponsor for DelhiDaredevils, just as it is one of the principal sponsors for the IPlitself. Indications are that GMR Sports, owner of DD may well exit inpart or full to this consortium if the price is right. Given that thethree year lock in period ends with the culmination of season three,promoters of franchises can sell more than 51 per cent beginning April26. SRK's dalliance with cricket has been a big joke, more so inseason two when KKR was the butt of all the jokes. Between JB - coachJohn Buchanan, eleven captains, FakeIPLplayer's blogging and BrendonMcCullum's bizarre captaincy, KKR the truly the object of ridicule.Controversies have continued to dog it right through, just as theyhave shadowed Kings Xi Punjab off and one the field.
Two bidders who were beaten at the door in the fresh two team auction- Videocon and Gautam Adani - are believed to be still in the hunt fora franchise. Sources close to developments have revealed thatVenugopal Dhoot may well be in a dialogue with SRK for KKR while LalitModi is reportedly pushing for Adani and Ahmedabad instead ofRendezvous and Kochi. SRK is already brand ambassador for Videocon forsometime now. The key is the price. Kings XI Punjab for instance isseeking a 4x valuation, SRK may also get something similar for KKR.The timing is certainly right for a disconsolate SRK, though the pricemay be a consideration for Dhoot.
What the two team auction has managed to do is raise the valuation barconsiderably for all the eight existing franchise owners. Valuationrange between 3.4x for a Mumbai Indians and Royal Challengers to asmuch as 6x for Rajasthan Royals. remember that the new threshold limitis between $333.33 million paid by the mystery men and women forRendezvous and $370 million by Subroto Roy Sahara. Teams which havenot done well and are in a bit of spot due to poor performanceparameters are at the vanguard of this exit strategy. The window ofopportunity is however limited because sometime in late Septemberafter the Airtel Champions League in South Africa, the fresh playerauction is slated to take place for all ten teams. All stake oroutright sales will thus have to be completed between April 26 andmuch before late September-early October. New owners or co promoterswill have to get a hang of the business and take a call on theauctions.
First the IPL Governing Council meeting on April 23-24 will have todecide on the course of action for Rendezvous and then on how manyplayers can be retained by the franchisees before the new auction.Sahara for example is extremely concerned about this. It wants allplayers to under the hammer so that choice is not limited and the $7million cap can be used judiciously. Glam quotient and cricket maywell sell but in SRK and Priety Zinta's case, the marriage hascertainly not been made in heaven. SRK used as enormous brand equitywith sponsors to make KKR the most financially viable franchisedespite performing below par on the field. Sachin Tendulkar has singlehandedly focused on winning IPL 3.0 and his personal brand saliencehas pulled the team out of its two season morass. MI has in turnpulled in sponsors as well. KKR and SRK despite being ledinspirationally by Saurav Ganguly off and one this season have failedto deliver the kayo punch consistently.
IPL and Lalit Modi's problems have only begun. On Wednesday as I writethis, MEA has hit back at Modi saying that he tried to stop a visabeing issued to SA model Gabriella who claims she is Modi's friend.This tit for tat counter punching will continue till the PM returnsfrom the US when a call will be taken on Tharoor. Issues of proprietyhave been raised and Tharoor's personal relationship with memsahibSunanda Pushkar named as one of the beneficiaries in Rendezvous andher middle east connection are sure to trip the urbane minister whohas been under a cloud ever since UPA 2 was formed. Many have reckonedthat the IPL bubble will burst, anyway for now it seems to be comingapart at the seams. The Modi-Tharoor spat is a manifestation of theopacity that exists in IPL where no financial details have beenforthcoming. Transparency remains the single biggest issue. If theBCCI is a private cosy club, Indian Pariwar League is an even moresecretive society. Tharoor ka suroor is busy tripping it right now.