Sachin Tendulkar has exited travel portal Musafir.com as an investor after a period of five years. Post his retirement in 2013, the master blaster had opted for a sweat equity of 7.5 per cent in exchange for appearing in the firm’s ads. He was being paid ₹1 crore every year for the past five years and was assured a minimum of ₹20 crore at the time of exit.

Admitting to the exit of the cricketer as an investor, Giya Diwaan, CEO, Musafir, said: “We had a cordial commercial relationship with Sachin Tendulkar, like any celebrity deal, for the past five years. The documentation is under process, and it is a cooling period between us and his company. He came in 2013 as a brand endorser and no longer features in our ads. We have so far not sold Tendulkar’s equity to any investor.”

‘Not too thrilled’

However sources from Sachin’s deal-making company indicated that the cricketer was not too thrilled with the valuation of the travel portal and exited with an unsatisfactory amount.

“Sachin is being careful about the kind of retail brands he endorses. He expected Musafir to get valued at $100 million so that he could get ₹50 crore as an investor. But he managed to get ₹20 crore as he realised it was going to take much longer for the company’s valuation to go up.”

“Travel was a non-core area for Sachin to endorse, and in most cases celebrities trust the promoters when they make such deals,” observed Manish Porwal, Managing Director, Alchemist Marketing and Talent Solutions. “The digital business is futuristic and it gets laden with risks when there has to be an exit as there are less cash reserves with such companies.”

Tendulkar had posed as a mysterious photographer sporting a moustache and a turban in Musafir’s ads urging people to pose with their favourite travel destination.

According to sources aware of the deal, Sachin was supposed to feature in the ads for three days in a year for which he was paid ₹5 crore, a part of his sweat equity deal. He was given two options with his 7.5 per cent stake — exit with a minimum of ₹20 crore or wait and get back an amount depending on the valuation of the company at the time of exit. He chose the former since the valuation of Musafir did not go up significantly.

Having handled some of Tendulkar’s endorsement deals before his retirement, Harish Krishnamachar, Founding Partner, Sportoid Sports Solutions, said: “There is no way for celebrities to verify valuations as professional fund managers themselves struggle in this area. One round of funding to the next could see a doubling or more likely a halving of valuation, depending on the desperation of the founders for cash. The deals are entered into based on future potential and forecasts by promoters. In addition, they (celebrities) try and factor in the cost of their physical time and look for a return that at least commensurate with that. Celebrities, of late, have tried to at least ask for a fixed fee on exit after a few years, in the event that valuations don’t measure up to expectations.”

Musafir India is owned by its Dubai-based parent company Universal Tours and Travels, along with a couple of individual investors. It competes with the likes of MakeMyTrip, Cleartrip and Yatra, and is expected to have a sales turnover of around ₹300 crore.

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