Indian Premier League (IPL) founder, Lalit Modi, shocked the cricketing world on March 26 (Thursday) by sharing the original bid documents of the league from its start year in 2008. The one-page photo has all the details of which company, group, conglomerate, or High Net-worth Individual (HNI) bid for which team and for what amount.
In light of the recent sale of Royal Challengers Bengaluru (RCB) and Rajasthan Royals for amounts worth a combined total of 3.4 billion USD (approx. Rs 32,000 crore), the 2008 document clearly indicates the astronomical rise of the IPL franchises.
Fans confused about the bidding amount and winning bid concept
However, as the sheet was shared, some fans were confused as to why, even after bidding higher amounts, some companies failed to secure a franchise.
A curious fan on X, replying to Modi’s tweet with the image showing the original bids, quipped, “Why did Emerald Telecom (ADAG) not get Ahmedabad, their bid was lowest for Ahmedabad?”
Another said, “Why didn’t UB Group get Delhi? Did they choose between the cities?”.
But the answer to their questions lies in simple mathematics and the rule of the highest bidder.
Smart Bidding Strategy That Decided IPL Franchise Ownership in 2008
What decided which business, conglomerate, or HNI got the right to build a franchise for a particular city? The answer is simple. If the UB Group bid for all 11 cities, but their highest bid (relative to other competitors for that specific slot) was only for Bengaluru, they got Bengaluru.
Similarly, the Anil Ambani Group (ADAG) bid for nearly all cities, but none of their bids was the highest one for any particular city; thus, they did not get a franchise in any city.
What the recent post by Lalit Modi has done is give a deeper sense to business minds of how some very risky people made the right call by going for high value on all their bids—like the Mukesh Ambani Group’s Rathi Priya Trading Ltd or the UB Group, both of whom went over 100 million dollars (approx. ₹400 crore in 2008) for the city they wanted to have.
Others with brilliant choices, like Deccan Chronicle Holdings and Red Chillies Entertainment, were winners because they had calculated the city they wanted to bid for and then went heavily for it.