Friday, October 26, 2012

IPL franchisee Deccan Chargers bought by Sun TV


Cricket is a game, T20 is entertainment and IPL is business !

Heard of Trevor Penney ?   - irony that the same idea failed one while it showers money to the other.  Indian Cricket League (ICL), funded by  Zee Entertainment Enterprises came a cropper bringing misery to all those associated with it.  The Indian Premier League (IPL) has come a long way since the inaugural season in April 2009 when it lasted for 46 days with 59 matches scheduled, out of which 58 took place and 1 was washed out due to rain. In 2010, IPL became the first sporting event ever to be broadcast live on YouTube.  Its brand value is estimated to be around US$2.99 billion in fifth season.

With so many corruptions being exposed now, IPL too is engulfed in some scandals with allegations of  betting, money laundering and spot fixing etc.,  One of the original franchisees – the Deccan Chargers ran into rough.   DC was run by Deccan Chronicle Holdings Ltd, the media group which acquired the  franchise for an amount of USD 107 million on 24 January 2008.  Their  logo is a charging bull. 
Due to financial problems Deccan Chronicle Holdings Ltd, the team owner of Deccan Chargers announced an sale of their team by auction.   It was announced that the sale will be through a bidding process – but it ended up different with team's owners rejecting the sole bid they received from PVP Ventures.  Thereafter, BCCI announced that the Decaan Chargers IPL franchise was terminated due to various violations of BCCI codes.  

DC was based out of Hyderabad – they rose to prominence in IPL 2 when they won the championship under the captaincy of Adam Gilchrist.  The team was coached by Darren Lehmann, former Australian cricketer.  After the debacle in the inaugural tourney, DC management sacked the entire administration associated with the tournament in that year. They removed their CEO J. Kalyan Krishnan, Coach Robin Singh and the Captain V.V.S. Laxman and replaced them with Tim Wright, the former Australian batsman Darren Lehmann and former Australian Wicket-Keeper Adam Gilchrist respectively.  In the subsequent years, they did not do anything great, finishing in the lower rungs all the years. 

Now they are in news as the  Sun TV network has won the Hyderabad franchise of the IPL, bidding Rs 85.05 crores per year (around $15.9m) for a five-year deal.  So, DC perhaps is no longer part of IPL  - the new owners can select the players from the Deccan Chargers team depending on their requirement and opt for those unsold players as well.  Sun TV, the new owners of the Hyderabad franchise have complete rights to go in for a brand new name for their team. Retaining the name Deccan Chargers would mean seeking the rights from the past owners. There could be some confusion as DC had its base in Hyderabad and played matches in Andhra as its home; Sun TV is head-quartered in Chennai where CSK has its base.


It is reported that the other bidder  PVP Ventures, offered Rs 69.03 crores per year (around $12.9m). In all, four firms had bough the tender document. Besides Sun TV Network and PVP Ventures, Jaypee Group and Videocon had bought the document but didn't submit the bid. The first thought is that Sun TV are paying double of what the Deccan Chargers did Rs 85.05 crore per year compared to DCs Rs 42.04 crore – thus the BCCI is having a windfall. But … is that the reality ?!?!?!?

In an attempt to draw more bidders, the base price for the franchise had been lowered to about $56m (about Rs 300 crore) for five years, compared to the base price of $225m for ten years in 2010, when the Pune and Kochi franchises were bought.  So, Sun TV Network  won the Hyderabad franchise of the Indian Premier League for an amount of Rs 85.05 crores per year.

In Mar 2010,  Sahara Adventure Sports Limited made the winning bid of $370 million (approximately Rs 1981 crore by today’s value) for the Indian Premier League’s Pune franchise.  The bid is the highest bid by any company in the history of IPL and it likely to remain that way given that the Sun TV Network won the Hyderabad Franchise for an amount of Rs 85.05 crore per year. Sahara, in comparison, are paying 190-odd crore per year.  Would it surprise anyone if Sahara decided that they wanted to renegotiate their contract in the wake of what everyone else is paying for their franchise to the BCCI?  In 2008, when Mukesh Ambani’s Reliance Industries Ltd made the highest bid for an Indian Premier League franchise ($124 million for Mumbai), many termed it as a gamble.

When Sahara made that $370 million purchase, the BCCI spoke in glowing terms about how it was an affirmation of the IPL’s increased brand value. Rendezvous Sports World had also forked out $333.33 crore for Kochi, a team that doesn’t exist anymore. Those  two bids were worth a total of about Rs 3,235 crore (when converted to Indian rupees) which was more than the Rs 2,853 crore that was collectively paid by the existing eight franchise owners in the first auction.  But now the sale is on a song – so low !!!  - has the IPL brand value fallen so low.

Former IPL chairman Lalit Modi fired a fresh salvo at BCCI president N Srinivasan, alleging that he is trying to “gift” the Hyderabad franchise to his “friends”. “So finally Sun TV has got an IPL franchise. I had predicted 3 months ago it will be SUN as BCCI president wanted it that way. Can’t be a bigger scam than this. Someone should see N Srinivasan’s relationship and India Cements relationship with Sun TV. Don’t forget Kalaignar TV and India TV scam,” Modi wrote on Twitter.

Away from all this muddle, will Hyderabadi fans still retain the loyalty for DC with the new Chennai boss – or will Chennai fans have trouble in ‘whistling for CSK’ when another team can stake claim for Chennai base !!  The TV group which has – Sun, Gemini, Udaya, Surya and host of other channels can easily promote their brand advertising all the time in between Cinema, comedy shows, songs and more or will it be more advertisements in between the matches – don’t be surprised if the bowler  waits for an advt to get over before delivering his next ball. 

Trevor Lionel Penney  born in Salisbury, Rhodesia played county cricket and was known for his fielding prowess. Penney is the current fielding coach of the Indian cricket team; he is also the fielding coach of Deccan Chargers.

With regards – S. Sampathkumar.

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