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The Kalanithi Maran-owned Sun TV Network, Chennai-based media and entertainment conglomerate, has entered cricket’s smash-hit, limited over, T20 format IPL Championships. On Thursday, it won the Hyderabad franchise with a bid of Rs 85.05 crore per year.
The decision by the Board of Control for Cricket in India (BCCI) could officially mean curtains for Deccan Chargers, owned by the Hyderabad-based Deccan Chronicle Holdings Ltd (DCHL), publishers of Deccan Chronicle .
The IPL Governing Council, which met in Mumbai on Thursday to open the bids for a new IPL franchise, selected Sun TV. The next bidder in line was PVP Ventures with Rs 69.03 crore. Incidentally, the Hyderabad-based PVP Ventures, which is into film financing and realty, reportedly offered nearly Rs 1,000 crore to buy out the beleaguered Deccan Chargers franchise. In a statement, the BCCI said the franchisee fee offered by Sun TV represents a premium of over 100 per cent of that paid by Deccan Chronicle for the Hyderabad franchise in 2008. The present contract for the franchisee is for five years, which would mean Sun TV will have to pay around Rs 425 crore for the period.
Sun Group CFO SL Narayanan said getting into the IPL would not strain group finances. “We have done our math carefully. If anything, the IPL operations will be hugely free cash flow positive over the five-year period starting with the season of 2013,” he told Business Line.
The Deccan Chargers, winners of the second edition of the IPL, ran into trouble with its owner hit by a financial crisis. And, it was put up for sale. Though PVP Ventures emerged the lone bidder, Deccan Chronicle rejected the claim.
After a hectic search for a buyer, DCHL announced on October 12 that Kamala Landmarc, a Mumbai-based realty firm, would buy the team. However, as it failed to furnish the mandatory bank guarantee of Rs 100 crore by 5 p.m. on that day, as stipulated by the Bombay High Court, the BCCI announced the termination of the Chargers team.
On September 15, the Cricket Control Board floated the tenders for a new IPL franchise after terminating the Deccan Chargers’ contract.
In its regulatory filing to the stock exchange, Sun TV has said the franchise will be for as long as the league continues. So, after five years, an amount equal to 20 per cent of the franchisee income received in that year has to be paid in four quarterly instalments to BCCI.
The share price of Sun TV today lost 3.5 per cent to close the day at Rs 343.65 on BSE with over 1.97 lakh shares changing hands.
ravikumar.ramanujam@thehindu.co.in
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