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Neeru Bhatia
Neeru Bhatia


Winners all

  • Game on: Sanjiv Goenka with his son Shashwat | PTI
  • Keshav Bansal | AFP

The two new IPL teams make many people happy

The two cannot be more different. While Sanjiv Goenka is soft-spoken, mild-mannered and every bit businessman-like, Keshav Bansal sports a beard, a mohawk and diamond studs in his ears. But they share a passion—cricket—and are now owners of Indian Premier League franchises. Goenka, who leads the RP-Sanjiv Goenka Group, won the bid for the Pune franchise, and Bansal, the Delhi-based young director of mobile handset maker Intex Technologies, won the bid for the Rajkot franchise.

Goenka's New Rising got Pune with a bid of (minus) Rs.16 crore while Intex bagged Rajkot for (minus) Rs.10 crore—the two lowest bids in the reverse bidding process followed by the Board for Control of Cricket in India this year. In reverse bidding, individuals or companies bid the lowest and agree to get the lowest amount from the BCCI. The new team owners in their bids did not want any money from the board but were willing to pay for the franchise (the minus sign indicates that). The two teams will feature in the 2016 and 2017 editions of the IPL, which will not have the suspended former champions Rajasthan Royals and Chennai Super Kings.

And, everyone had reason to smile. Announcing the details, BCCI president Shashank Manohar said the two new bids would increase the board's revenue by Rs.180 crore a year. “The two new teams will not get Rs.70 crore and Rs.75 crore out of the central revenue for 2016 and 2017, respectively. Plus both the teams together will pay us Rs.26 crore annually,” he said.

There were three more bidders—RPG Group of Goenka's brother Harsh, Chettinad Group and Axis Clinicals. There were bids for multiple centres by all—New Rising bid for Nagpur franchise (in addition to Pune), Intex for Kanpur and Visakhapatnam (in addition to Rajkot), Axis for Kanpur, Nagpur and Pune, RPG for Pune and Rajkot, and Chettinad for Chennai and Pune.

Gujarat's first IPL team has given Saurashtra Cricket Association's boss Niranjan Shah, who is an IPL governing council member, reason to smile. Though a small town, Rajkot is well known for its spirited fans. Hosting IPL matches, however, does not generate big revenue for state associations (they get only Rs.30 lakh), as gate money and in-stadia ad revenue go to the team owner's kitty.

Market experts say the Rajkot team will attract many sponsors, as Gujarat is home to many big industrial houses. And, it is a perfect place to build brands. “No other sport gives you as big a platform to connect as cricket and IPL do,” said Bansal. His company's biggest target customers, the youth, make a big component of the IPL audience.

IPL governing council member Ajay Shirke of Maharashtra Cricket Association seems relieved that Pune is back in the league. The construction of a new stadium in Pune has put the association in financial stress, with one of its sponsor partners, Sahara, which owned the erstwhile Pune team, pulling out. “The staging money won't make a difference to our problem,” he said. “We will have to fight our way out of it ourselves. The problem arose due to a commercial partner defaulting.”

A question the bid winners were asked was, what would they gain from an association which would last only two years? Both team owners spoke of emotion and passion attached with the sport, and reiterated that they had done their arithmetic well and were prepared for the high cost and possibility of very little returns or losses on the investment. A team's operational cost comes to around Rs.40 crore and the cost of players' purse is Rs.60 crore.

Goenka, who also co-owns the Atletico de Kolkata football team in the Indian Super League, said: “Yes, we do recognise it is a very finite window of two years, but we believe it will create value for us. It will be a great branding opportunity for different brands within the group that includes Spencer's and Saregama. And we believe Pune makes commercial sense.”

Considering that Goenka's ISL team also has operational costs running to about Rs.40 crore plus the franchise fee, the investment in cricket is bound to give greater value in terms of visibility and recall.

Intex has been broadcaster SET Max's on-air title sponsor for the IPL and involved in cricket sponsorship for more than three years as team sponsors of Rajasthan Royals. It was unfazed by the controversies surrounding the game. “These days, there is some scandal in some sports or the other; that's part and parcel of the game,” said Bansal. “The idea is to keep identifying the wrongs and correcting them on time. The limited association for two years will be a motivation to connect as strongly as possible with as many as possible. This opens the doors for us to associate with more sporting activities. The idea will be to minimise losses.”

This is a tremendous marketing and branding opportunity for both the team owners. They get a chance to pick five marquee players each on December 15, including M.S. Dhoni, Brendon McCullum, Steven Smith, Ajinkya Rahane and Ravindra Jadeja. The teams are expected to spend about Rs.40 crore on these players. Post this, all remaining CSK and RR players and those released by other teams will be put together in an auction for all eight teams in February.

* Successfully bid for the Pune franchise
* Co-owns the Atletico de Kolkata football team playing in the ISL
* Inherited about half of RPG Group from his father, the legendary Rama Prasad Goenka.
* Owns companies like Spencer's Retail and Saregama

* Successfully bid for the Rajkot franchise
* The young director of handset maker Intex is the face of the company founded by his father in 1996
* Wants to capitalise on IPL to improve his brand's value

In reverse bidding, individuals or companies bid the lowest and agree to get the lowest amount from the BCCI. The two new team owners in their bids did not want any money from the board but were willing to pay for the franchise. Goenka's New Rising got Pune with a bid of (minus) Rs.16 crore while Intex bagged Rajkot for (minus) Rs.10 crore. The minus sign indicates that they will give money to the board.

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Topics : #cricket | #IPL

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