Courtesy the Indian Premier League (IPL), the Twenty20 format cricket extravaganza, over Rs 630 crore will change hands among franchisees, the Indian cricket board and the players within the first week of January 2011.
In the next three days, the 10 IPL franchisees together will pay the Board of Control for Cricket in India (BCCI) their first installment of IPL franchisee fees of around Rs 180 crore. Thereafter, on January 8-9, the franchisees will have to shell out Rs 450 crore to buy 160 players, including 80 foreign players from a pool of 350 players. The player auctions would ensure franchisee contracts for the next three editions of IPL, but franchisee owners will have to freeze their outgo towards players by the next weekend.
Payment of franchisee fees at the beginning of the year is a precondition in the contract of every IPL franchisee with the BCCI. According to the franchisee agreement, 30% of annual franchisee fees has to be paid to the BCCI in the first few days of the calendar year. Another 40% of the annual fees goes to the BCCI before the IPL begins while the balance can be paid by the team owners within three months from the last day of IPL tournament.
Upon payment, only the franchisee owners can undertake any business activities for the year, sources said.
With 10 IPL franchisees in fray, BCCI will collect slightly over Rs 1,300 crore in revenue from IPL in 2011, which will include franchisee fees, television rights money and various sponsorship deals. Experts said that due to the edition of two new IPL franchisees from 2011 onwards ? Pune and Kochi ? BCCI may witness over 40% jump in its revenues.
However, for the 10 franchisee owners, player auction is extremely crucial. A similar auction was held in early 2008 before the IPL series started with each team having a cap of $5 million (Rs 24 crore) for buying Indian and overseas cricketers.
This year, every team can spend a maximum of $9 million (Rs 43 crore) to buy foreign and domestic players from the pool of players provided by the BCCI. Each team will need to have a minimum strength of 16 players with not more than eight foreign players and eight Indian players. Also, all teams need to include two Indian players from the BCCI under-22 pool. However, in the playing 11, there can not be more than four foreign players.
Five foreign and seven Indian cricketers including Sachin Tendulkar, MS Dhoni, Harbhajan Singh and Virender Sehwag among others have been retained by their respective franchisees leaving the auctions wide open for most of the sought after Indian and overseas players.
As per rules, each player in the auction pool must mention reserved price and no team can bid below the base price. Players are allowed to set a reserve price between $20,000 (Rs 96 lakh) to $400,000 (Rs 1.9 crore). This year too, there are three tiers of players based on their respective base prices.