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BCCI receives strong interest in new IPL franchises

The Board of Control for Cricket in India (BCCI) has reported strong interest in a tender floated for two new Indian Premier League (IPL) franchises, with over 10 companies said to have put their names forward to acquire rights to the teams.

The BCCI said in October that it would open a tender process for two new franchises in the lucrative Twenty20 league after upholding the suspensions handed out to the competition’s Chennai Super Kings and Rajasthan Royals teams.

The ESPNcricinfo website has now said more than 10 companies have bought the Invitation to Tender (ITT) document following closure of the initial part of the process yesterday (Monday). The rights on offer are for two teams that will compete in the IPL for an initial two seasons, with the two successful owners set to be identified in a walk-in bid on December 9.

It is understood that Chennai-based companies Chettinad Group and ITW, media entrepreneur Ronnie Screwvala's Unilazer, consumer electronics firm Videocon, Group M, Intex Mobile, snack manufacturer Haldiram and Yes Bank were among the companies that purchased the bid document. Harsh Goenka, chairman of the RPG group, and his brother Sanjiv, chairman of the RP-Sanjiv Goenka group, are also said to have procured the document.

A BCCI official told ESPNcricinfo: “Ten-twelve bids is quite a lot. Obviously there is a high level of interest in the document, but who knows how many of these companies will actually translate this into a specific bid.”

The two new franchises will be introduced after the BCCI in October elected to uphold a ruling from a panel established by India’s Supreme Court in July which recommended the suspension of the Super Kings and Royals for a period of two years, in the wake of the spot-fixing scandal that hit the 2013 edition of the competition. The Super Kings and Royals will remain suspended for two years, with the BCCI inviting bids for two new teams for the 2016 and 2017 IPL seasons.

IPL chairman Rajiv Shukla has said the two new franchise owners will be picked through a reverse-bidding process. “The base price for the reverse bid from the central revenue pool is Rs 40 crore (€5.69m/$6m) and the party which bids for lowest share from the central revenue pool will be the winner of the new team,” Shukla told the Press Trust of India news agency.

Expanding on the allocation process, a BCCI official told ESPNcricinfo: “There is no franchise fee, so you don't pay a higher franchise fee and buy a team. Normally they pay the franchise fee and we give a share of the broadcast rights. In a reverse bid, say for instance a company bids asking us for only Rs 20 crore from the broadcast rights, while another company asks for only Rs 15 crore. The one that asks for less money from us gets the rights.”

The official added: “If a company buys it for X amount, it is still going to gain a lot of money by way of publicity, and anyway there is no franchise fee involved. This system has been devised because a franchise fee for a two-year period is difficult to evaluate, as you then get into valuation territory.”