BCCI plans to invite bids for the inclusion of two new teams: Reports

Indian Premier League 2021 scheduled for April-May had been suspended midway due to rising concerns over COVID-19 cases in India. The BCCI announced that the remainder of the tournament will be held in UAE. With the second leg of the tournament set to take place in October of this year, the BCCI is considering inviting bids for two more teams.

According to Cricbuzz, the Board intends to complete the sale of two new teams as early as July of this year. The IPL will be expanded to a 10-team affair beginning in 2022. 

What is an ideal valuation for the new teams?

“We understand the tender will be floated next month, we have been waiting for this for quite some time. We will not be surprised if 250 million is the base price,” a CEO of a firm, who’s interested in buying one of the two new teams said. 

It is important to note that the IPL is one of the most lucrative sports leagues in the world. Given the league’s popularity and growth, the industry experts believe that the two new franchises will almost certainly be sold at a massive premium. It is said that after the new media rights agreement is signed, franchises will see a higher return on their initial investment.

“The BCCI would be looking between USD 300-400 million. We were anticipating that six months back. With RedBird, that estimation gets reaffirmed. An average team now should cost USD 300 million, so the new team should be around 400 million (about Rs 3000 crore). If we also factor in the Ahmedabad point, the largest stadium in the world, there could be a chance of a huge gap between the price of the two new teams - one may go for USD 400 million and another for USD 350 million," said N Santosh, managing partner of D&P Advisory.

A source privy to the development explained how the selling price of the new teams to potential bidders can be determined with the help of the media and other factors involved.

"The key to getting a good price is telling the world that more parties have interest. If a potential bidder is made known that the biggest business houses have purchased the tender document, the price will automatically shoot up. The media plays a big role in creating the hype. How the BCCI will manage the sale and orchestrate the hype is important," the source explained.