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Editor’s Pick: Can BCCI expand IPL 2021 successfully?

IPL 2021 is expected to get bigger as there is a lot of murmurs about the introduction of the ninth team in the league.

Despite the global pandemic, the Board of Cricket Control in India (BCCI) successfully managed to stage the 13th season of the Indian Premier League (IPL) in the United Arab Emirates (UAE). Mumbai Indians lifted the record by winning the fifth IPL title earlier in November. Ever since IPL 2020 was concluded, the rumours about the introduction of the ninth team in the next edition of the next tournament has emerged.

Few reports also suggested that BCCI is set to float tenders for the new team after Diwali, however, there has been no concrete announcement by the cricket board about this idea yet. Even though games were played behind closed doors, IPL 2020 was a big hit for broadcasters and sponsors. The T-20 league is a commercial giant, so the addition of a new team should ideally be a boost to the competition. But this has not been the case always, so let’s look at how team auction has taken over the years in IPL.

Trend witnessed in the cost of franchises

When the idea of IPL was executed in 2008, numerous investors from different industries showed interest in buying teams. The bidders ranged from businessmen such as Mukesh Ambani, Vijay Mallya to consortium lead by Bollywood stars Shahrukh Khan and Preity Zinta. The most expensive team during the auction was that of Mumbai Indians, bought by Mukesh Ambani’s Reliance Industries for a whopping $111.9 million, while Rajasthan Royals were the least expensive team bought by a consortium led by Emerging Media for $67 million. Chennai and Bangalore were two other teams that cost more than $100 million. Lalit Modi, the IPL commissioner in 2008, confirmed that the total outlay from bidding auction for teams was $723.59 million, significantly higher than the base price of $400 million. (Stats courtesy: ESPNcricinfo)

IPL decided to add two more teams to the competition in 2010. The two teams belonged to Pune and Kochi. Considering the success of two seasons of IPL, both teams combined fetched a much bigger fee than the eight teams did in 2008. Pune was bought by the Sahara group for $370 million, while the Kochi team was sold to a consortium of five teams called Rendezvous Sports World for $333.33 million. (Stats courtesy: ESPNcricinfo)

There was another auction held in 2015 when Chennai and Rajasthan were suspended for two years. However, the lowest bidders for this auction were given teams after terms of the new teams stated that they would get a very small portion of central revenue. Goenka group of Kolkata won the race for the Pune team at a bid of minus $2.368 million. The Gujarat team was bought by electronics manufacturer Intex for a bid in the region of minus $1.480 million. (Stats courtesy: Economic Times)

The situation and terms of the auction in 2015 were different, but there has been a massive upward trajectory in the prices of teams when normal auction rules were followed.

Bittersweet fortunes of new teams

The introduction of new teams has not been successful on most occasions in IPL. Pune Warriors India and Kochi Tuskers struggled massively during their two years stay in IPL. Both teams were scrapped after two seasons due to different controversies. Moreover, two years was a very small sample size for both teams to find their feet in such a competitive tournament.

Meanwhile, Rising Pune Supergiants did well when they joined IPL in 2015. They reached the finals of the competition in 2017, losing the game by one run against Mumbai Indians. Meanwhile, Gujarat Lions were inconsistent during their two-year stay in IPL.

Patience will be needed from owners and the IPL committee to successfully expand the competitions. The new franchise is likely to find it difficult to go toe to toe with established teams in the tournament. Moreover, finding the right pieces of the puzzle in two years itself is a difficult task for a team to perform well in the tournament. BCCI will have to make sure that the new team gets stable owners that are likely to give more time to the team.

Pandemic unlikely to see depression in the bids for new team

The pandemic has led to losses worth million for major industries. However, the economical depression is unlikely to make a big impact on the auction process for the ninth team in the IPL. BCCI can play it out smartly by floating just one new team next year.

Goenka and Adani groups are reportedly interested in buying a team and there are likely to be more suitors. If only one team is up for the grabs, then the bidding procedure could get intense where BCCI can end up pocketing a bigger fee.

Besides, IPL 2020 was a smashing hit as it still managed to attract sponsors. The broadcast revenue was also healthy as Disney Star India reportedly witnessed a 20% increase in television subscription revenue. Disney Star India managed to generate ₹2500 crores in advertising revenue from IPL 2020, significantly higher than IPL 2019. 

With a new team, the number of matches will increase, which will eventually pave the way for more advertisement and broadcast revenue. Despite the pandemic, IPL remained a profitable product to invest in, so bidding for the ninth team could follow the same trend that it followed between 2008 and 2010 auctions. The expansion of IPL has not been successful in the past, so BCCI will be hoping that they get much better owners for the new team than they did ten years ago.

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