RP Sanjiv Goenka Group and CVC Capital win bids for new IPL teams for $932 million and $692 million

[cricketjoshila]

But like the dot.com boom, it has to translate into profits to justify the valuations.

All 8 IPL teams made profit since 2018.

According to most sources the per year revenue is as follows.

Share of every team from IPL central revenue team is 244cr inr.

Gate receipts is 2.5 to 3.5 CR per match

Team sponsors, Ground Sponsors contribute anywhere between 30 to 50cr. Depends on the team.

So at the lower end a team will make 280 cr and at the higher end they will make 310cr.

The different heads of expenditure are:

90 cr inr is the player salary cap.

Around 30 to 50 cr is spent on running the franchise, including support staff, travel, stay, promotion etc etc.

3.5cr is given to the local association as hosting fee for 7 matches.

20 per cent of the topline revenue is given to bcci as revenue share. Which is 12 to 15 cr.

So the total expenditure is between 140cr to 160cr.

So the profit before tax ranges between 120 to 150cr. Thats 16mn to 20mn a year.

Now lets come to valuation. Valuation just isnt about profits. It also includes things like brand value etc.

IPL team is a rare commodity. You can be Asia's second richest man and worth $70bn but since you missed out on the team, you have no other similar product. IPL is a rare product and business opportunity to create visibility for yourself and your company.

 

[MenInG]

CVC Capital Partners, who were awarded the Ahmedabad franchise by the BCCI in Dubai on Monday, has run into trouble for its links with betting companies. It has been pointed out that CVC Capital have invested heavily in betting and gambling companies. (More Cricket News)

The IPL is already tainted due to the 2013 betting and match-fixing scandal. Chennai Super Kings and Rajasthan Royals were banned for two seasons after some of their top officials were charged by the Supreme Court for corruption.

Under the circumstances, to award a new team to a foreign company with massive interests in betting and gambling, could be suicidal for BCCI. Gambling and betting are banned according to Indian laws.

Top sources told Outlook on Tuesday that BCCI's attention has been drawn to CVC Capital's business activities and it was strange that these were not noticed during the long "verification stage" before the financials were opened on Monday evening.

CVC Capital made the second largest bid (INR 5600 Crores) to win the Ahmedabad franchise. They got the better of 'favourites' Adani Group, who made an offer of INR 5100 Crores. RPSG Group won the Lucknow franchise by paying a whopping 7090 crores.

CVC Capital Partners is a private equity and investment advisory firm with approximately US$ 111 billion in secured commitments since inception across European and Asian private equity, credit and growth funds.

BCCI doesn't see any problem in CVC Capital winning the bid. A senior official told Outlook on Wednedday: "CVC Capital is a big private equity company and they are free to pick up stakes in a betting company because betting is legal abroad. Irelia Company Pte Ltd (through which CVC Capital bid) could be managing many funds but as long as they don't have any managerial role or control, how does it matter? Betting is a matter of perception. It should not be confused with match-fixing."

CVC Capital Partners is a private equity and investment advisory firm with approximately US$ 111 billion in secured commitments since inception across European and Asian private equity, credit and growth funds.

A top source involved with the bidding process said the Adani Group was weighing its options. A formal complaint in writing has still not been made though. It is learnt that BCCI bosses had been in discussion with CVC Capital officials to find out if there was any legal issue. BCCI seems to be convinced that there are no problems.

Interestingly, top La Liga teams like Real Madrid, Barcelona, Atletico Madrid had objected to (and eventually managed to reverse) the decision of CVC Capital buying out a 10% stake in the league after it came to light that they had negotiated terms that contravened Spanish laws and La Liga’s protection of its clubs.

https://www.outlookindia.com/websit...mpanies-will-adani-group-get-ahmedabad/398826

 

[cricketjoshila]

Adani isnt going to take any action. They may buy out CVC though.

But i really want to see cvc run the team. They are a cut throat profit making entity. So it will be interesting to see how they run the IPL team.

 

[MenInG]

CVC Capital and RPSG Enterprises emerged as the two winners in the bidding of the 9th and 10th IPL franchises that are set to be added from the Indian Premier League (IPL) 2022 season. However, CVC Capital's alleged investments into betting businesses have put them in a spot of bother.

The BCCI isn't allowed to form an association of any sort with companies dealing with betting businesses. While no official statement on the matter has come from the India board yet, it has been learned that BCCI's legal team has started its investigation based on which it will be determined if CVC Capital can continue to own the Ahmedabad franchise or not.

“The formalities haven’t yet been completed, the BCCI legal team is going through it and we are expecting them to revert us post-Diwali,” a BCCI official told Indian Express. “The BCCI has full rights on whom they will allot the team, it’s the board’s discretion and we can only decide on a new IPL franchise (CVC) when the legal team reverts to us.”

What happens if BCCI parts ways with CVC Capital?

If the BCCI decides to end its association with CVC Capital partners over its association with betting companies, the next-highest bidder, Adani Group, will come into the picture. The Gautam Adani-owned company had bid INR 5100 crores in the auction but found themselves being outbid by CVC Capital who had bid INR 5625 crores.

CVC Capital is under trouble over its 'portfolio companies' which consist of websites like Tipico -- dealing in sports betting and online gaming -- and Sisal -- a betting, gaming and payments company.

CVC isn't new when it comes to investment in sports leagues. The organisation has investments in Formula 1, football, rugby, but it was the first time it got involved in cricket.

When the BCCI had announced the sale of the Ahmedabad franchise to CVC Capital Partners, former IPL commissioner Lalit Modi was one of those who had questioned the decision considering the brand's association with betting companies.

“I guess betting companies can buy an IPL team. must be a new rule. Apparently, one qualified bidder also owns a big betting company. what next? does BCCI not do their homework? what can Anti-corruption do in such a case? #cricket,” Modi had tweeted.

A total of 9 companies had lined up for the two new franchises. Sanjeev Goenka owned RPSG Enterprises lodged the highest bid, winning the Lucknow franchise.

https://www.timesnownews.com/sports...-investments-amid-betting-links-report/827651

 

[MenInG]

Indian Premier League teams can retain up to 4 players in the lead up to the mega auction for IPL 2022, the Board of Control for Cricket in India (BCCI) has conveyed in a letter to the franchises. The two new teams who will be part of the next season will be allowed to pick 3 players before the auction.

A source close to the board confirmed the developments to India Today on Saturday. The existing 8 franchises will be allowed to retain their players between November 1 and 30 while the two new teams can pick 3 players from the released list of players or elsewhere from December 1. The deadline for picking the set of 3 players for the new teams is December 25.

The 8 existing teams can't retain more than 3 Indian players (capped or uncapped) while they can't retain more than 2 overseas players. Meanwhile, the two new teams can pick a maximum of 2 Indian players after the players are retained by the existing franchises. No more than one uncapped player can be picked by them.

Meanwhile, the maximum purse for all 8 teams has been fixed at Rs 90 crore each.

If a team retains 4 players, then a total of Rs 42 crore will be deducted from their purse with the top player getting Rs 15 crore.

For 2 players, Rs 14 crore and Rs 10 crore have to be shelled out while teams retaining only one player have to pay Rs 14 crore to him.

Sanjiv Goenka-helmed RPSG Group came up with a winning bid of a whopping INR 7090 crore and picked Lucknow as its home base. CVC Capital, former owners of Formula One, came up with the second-highest bid of INR 5625 crore and opted for Ahmedabad during Monday's bidding in Dubai. Notably, RPSG Group also owned the Rising Pune Supergiant franchise between 2016 and 2017

https://www.indiatoday.in/sports/cr...ick-3-teams-before-auction-1871473-2021-10-30

 

[MenInG]

The BCCI seems to be OK with CVC Capital Partners’ acquisition of the Ahmedabad franchise in the Indian Premier League, as the understanding is that the international conglomerate’s Asian fund, which made the investment, doesn’t have links with any betting companies. Still, to be completely ascertained of the facts, the cricket board is likely to form a committee in a few days.

CVC’s ownership of the Ahmedabad franchise wasn’t discussed at the BCCI’s Annual General Meeting in Kolkata on Saturday. Informally, though, the Board members have been apprised of the developments. “CVC has two funds, European funds and Asian funds. While its European funds have links with (sports) betting companies, where betting is legal, its Asian fund is clean. And they invested from their Asian fund. That’s the understanding. Still, the BCCI is likely to form a committee in a few days to be doubly sure,” a Board member who attended the AGM, told The Sunday Express.

It is learnt that the BCCI’s understanding is based on its legal team’s due diligence on CVC Capital Partners’ investments. Under the ‘portfolio companies’ list on the CVC Capital Partners’ website is Tipico, a sports betting and online gaming company, and Sisal, a betting gaming and payments, consumer/retail company. But those are found to be linked to their European fund.

CVC Capital Partners were the second-highest bidder, as the BCCI brought in two new franchises from the 2022 IPL onwards. While they won the Ahmedabad franchise for Rs 5,625 crore, the Lucknow franchise went to the highest bidder, the Sanjiv Goenka-owned RPSG Group, for Rs 7,090 crore.

CVC’s acquisition of an IPL franchise, however, had been questioned, bringing about a tweet from former IPL Commissioner Lalit Modi, who posted: “I guess betting companies can buy an IPL team. must be a new rule. Apparently, one qualified bidder also owns a big betting company. what next? does BCCI not do their homework? what can Anti-corruption do in such a case? #cricket”.

But the understanding is that investing from a fund with no links to betting companies could be good enough for CVC to retain the Ahmedabad franchise ownership. CVC is an international conglomerate with a strong connection to sport through previous stake-holding in Formula 1 and a recent minority stake in La Liga.

As a BCCI functionary said, the cricket board has “full rights” on whom to award the franchise ownership and in case the second-highest bidder is disqualified, the third-highest bidder – Adani in this case with Rs 5,100 crore – would be the next in line.

 

[Last Monetarist]

Seems to be a ludicrous technicality if they qualify CVC on the basis of the jurisdiction of its funds. Smacks of looking for (flimsy) excuses to waive through the acquisition.