Mumbai: The Chennai-based Sun TV has won the bid for a new Hyderabad Indian Premier League team as a replacement for the Deccan Chargers. It bid to pay Rs. 85.05 crore a year, for the right to own the Hyderabad team.
Only two teams finally bid to replace Hyderabad franchise owner Deccan Chronicle, which was forced to sell its team, the Deccan Chargers, after five seasons because of financial reasons. The Hyderabad-based PVP Ventures, the second bidder, offered Rs. 69.03 crores a year. The reserve price set by the Board of Control for Cricket in India (BCCI) was Rs. 60 crore.
"SUN TV Network have won the Hyderabad Franchise for an amount of Rs. 85.05 crores per year. This Franchise fee represents a premium of over a 100 % above the amount paid by DCHL for the Hyderabad Franchise in 2008," BCCI Secretary Sanjay Jagdale said in a release.
"The SUN TV Network bid was substantially higher than the second bid of PVP Ventures, which was Rs. 69.03 crores," Jagdale said.
According to an IPL source, Sun TV has paid Rs. 20 crore as signing amount and also the bank guarantee of Rs. 85 crores for the first year.
The source said that the Deccan Chargers players, who are now left without a team following the termination of the franchise, will get the first option in the new team owned by Sun TV.
"Sun TV will have to inform the IPL by tomorrow as to which Deccan Charger players they want in the team," the source said.
Those players not selected will go to the common auction pool.
All the IPL franchises will have to indicate by October 31 which players they wish to retain for the sixth edition of the league.
The IPL season 6 will commence from April next year.
Meanwhile, Sun Group CFO SL Narayanan while talking to NDTV said that the deal fits in well with their overall business. He said, " The franchise comes at a very good price and fits in well with overall business."
Talking about the team composition, he said that they will take a decision on that in the coming days.
He said, "We are looking at the option of retaining some good players from the Deccan Chargers. Will take a call on composition of team in the coming days."
While clarifying that they do not have to pay Deccan Chargers for any player, Narayanan also ensured that a call on the team branding too will be taken soon.
He also said that shareholders' nod for the deal was not required.
The Jaypee group was expected to participate in the auction and there was talk that the Adnani group too would bid, but neither did. Sources said a key reason for Jaypee not following up on its initial keen interest in the auction was that its international cricket stadium in Noida is not yet ready and it would have had to play home matches elsewhere. PVP Ventures had made an attempt to acquire the Deccan Chargers last month too, offering Rs. 900 crore for 10 years, but it was not accepted by Deccan Chronicle.
At Rs. 850 crore for a likely 10-year contract, the Hyderabad team thus becomes the second most expensive team in the IPL after the Pune Warriors India for which the Sahara group paid Rs. 1702 for seven years. The Kochi Tuskers of Kerala, at Rs. 1533.32 crore for seven years, were the second most expensive, but had their contract terminated before the start of IPL Season 5.
Sun TV is owned and run by Kalanidhi Maran, the nephew of DMK chief M Karunanidhi. It is one of India's biggest television networks with 32 TV channels and 45 FM radio stations primarily catering to an audience in south India. Though the company is Chennai-based, the IPL already has a Chennai team in the Chennai Super Kings.
The BCCI had set a deadline of 12 noon today for the receipt of bids. After the Deccan fiasco, the board has tightened its contract clauses. Under its new guidelines the bidding teams had to deposit Rs. 20 crore while submitting bids. Bidders forfeit that deposit if they fail to provide an annual bank guarantee. Also now the BCCI can terminate the franchise if they don't pay players or change the ownership structure without informing BCCI.
A lower reserve price this time at Rs. 60 crore - almost half of what the board had set in 2010, when the Pune and Kochi teams came into existence - has sparked much speculation about whether the IPL's appeal is waning.
Earlier, on September 15, the BCCI had floated the tenders for a new IPL franchise after terminating Deccan Chargers' contract but the team owners DCHL had challenged it at the Bombay High Court.
The High Court had ruled in favour of the BCCI after Deccan Chargers Holdings Limited failed to furnish bank guarantee of Rs. 100 crore before October 12, 5pm deadline. Later, an arbitrator had ordered for status quo but the High Court again ruled in favour of the Board.
DCHL then approached the Supreme Court which, however, declined on October 19 to interfere with the High Court decision which had set aside the status quo order passed by the arbitrator.
