RPSG and CVC bag the two new franchises
One of the biggest moments of IPL history took place today as two corporate giants – RP Sanjeev Goenka Group (RPSG) and CVC Capital Partners (Irelia Company Pte Ltd) – have bid staggering sum of money running over US$1.5 billion to buy the two new IPL franchises.
On Monday, at a walk-in bidding event in Dubai, RPSG paid a huge amount of INR 7090 crore (US$ 940 million) to buy the Lucknow franchise while CVC, a private equity fund, bought the Ahmedabad franchise for INR 5625 crore (US$ 750 million).
“It is good be back in the IPL and I am delighted,” RPSG owner Sanjiv Goenka told media minutes after buying the Lucknow franchise. “It is an initial step. We now have to build a good team and perform.”
The RPSG bid was about 250% more than BCCI’s base price of INR 2000 crore (US$270million approx). The corresponding figure for CVC was over 160%. In all, 22 companies had purchased the tender document but only nine eventually arrived at the walk-in bid event held in Dubai that lasted over six hours on Monday.
The Bidding Process
The bids, enclosed in a sealed envelope, were opened after a long technical evaluation process. The entire process was supervised by the IPL Governing Council as well as the BCCI top officials lead by board president Sourav Ganguly, Secretary Jay Shah, treasurer Arun Dhumal, vice-president Rajeev Shukla and joint-secretary Jayesh George.
In a BCCI media release on Monday Ganguly said it was “heartening” to see two new teams being added to the IPL roster “at such a high valuation, and it restates the cricketing and financial strength of our cricket ecosystem.”
His deputy, Shah, felt it was a “momentous day” for Indian cricket while Brijesh Patel, the IPL Governing Council chairman said the IPL was “globalizing” cricket and its importance as being the “most sought-after” leagues in sport was established through the bids from “different parts of the world and from parties with diverse portfolios.”
Background of RPSG and CVC
This is the second run for RPSG, who earlier owned the Pune-based Rising Pune Supergiant in 2016 and 2017, when Chennai Super Kings and Rajasthan Royals served a two-year suspension in the after events of the 2013 IPL corruption scandal.
A passionate sports lover, Goenka wore his emotions on the sleeve and even replaced MS Dhoni as the Supergiant captain ahead of the 2017 season, when they finished runners-up. RPSG, which calls itself a diversified business corporation, also has larger interests in sport. They own the Atletico Mohun Bagan in the Indian Super League and have owned teams in table tennis and boxing previously.
CVC, meanwhile, are an international company with offices throughout Europe, Asia and the Americas. They were the one of the, if not the, first private equity firm to invest heavily in sport. Accordingly, they had a controlling stake and ran Formula 1 between for close to a decade until 2016 before selling it to Liberty Media, the current owners of Formula 1. Recently they took a minority-stake in La Liga, the top-level football league of Spain and also have vast experience leagues in rugby globally.