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Rediff.com  » Business » BCCI asks $50-60 m for IPL team ownership

BCCI asks $50-60 m for IPL team ownership

September 18, 2007 03:08 IST

In a move that already has advertisers complaining, the Board of Control for Cricket in India (BCCI) has asked companies to pay between $50 million and $60 million (Rs 200 crore to Rs 240 crore) to own a team featuring in the Indian Premier League, the tournament it has introduced to counter Zee TV baron Subhash Chandra's Indian Cricket League.

In return, the BCCI is offering a revenue share from stadium advertising and gate money but not television rights. The team can also be listed on the stock exchanges and buyers have the right to re-sell the team at a premium.

However, ground rights for most of the matches are expected to be sold for around Rs 1.5 crore, nearly half of what the BCCI earns from cricket matches.

Explaining the structure of the deal, BCCI vice-president Lalit Modi said the IPL would follow the "franchisee model" under which a company will have to buy and manage the team.

"The company is not a sponsor but the owner of the team. Apart from the ownership amount, it will have to deal seperately with each cricketer it wants in its team. That amount will depend on the company's bargaining power," Modi said.

Sources said Sahara's sponsorship of the Indian team entailed a pay-out of Rs 3 crore per match or around Rs 300 crore for three years.

The two deals, however, are not strictly comparable because Sahara does not have revenue-sharing arrangements with the BCCI and has limited access to the team for advertising purposes.

The ICL is believed to be asking for Rs 5 crore each from three key sponsors and Rs 1.5-2.5 crore each from seven associate sponsors. Team sponsorship is available for around Rs 4 crore.

The IPL, which is modelled on the globally popular English Premier League soccer tournament, will include domestic and foreign teams that will play tournaments, including one in the Twenty20 format.

Possible advertisers say they are unsure whether there is value for money, given that the IPL is a new format.

"It sounds like a lot of money," said an executive of a leading media buying house, adding, "it implies that one has to offer the best price to win over a particular player if he wants to have a winning team".

A media expert added that the pay-out per cricketer might not be huge given that the list of players on board with the IPL — Australian bowlers Glenn McGrath, Shane Warne and former New Zealand captain Stephen Fleming — have retired from international cricket.

Either way, the money in domestic cricket is bound to grow exponentially. "In the next 10 years, the competition between the two leagues will only get more money into domestic cricket," said Anirban Das Blah, vice-president, Globosport India.

Pallavi Jha & Aminah Sheikh in Mumbai
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