26 oct 2012
Sun TV purchases Hyderabad IPL franchise at Rs. 85 crore per year
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Dr Sanjay Kumar Cardiac Cardiothoracic Heart Surgeon India |
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.