Sunday, March 7, 2010

IPL postpones unveiling 2 new Franchises

The IPL has cancelled its existing tender for the two new franchises, which were to be unveiled on March 7, and has amended the bidding process by dropping at least two clauses. The new tender, which will be floated on March 9 and opened at 11am on March 21, will not require the bidder to have a net worth of $1 billion and will not demand that they provide an advance guarantee of $100 million. The minimum bid amount, however, remains the same at $225 million.

The deadline for submitting the new tender is 10am on March 21 and the bids will be opened on the same day in Chennai. Bidders will have to make a $10 million performance deposit by 5pm on March 19. The existing tenders were not opened at the IPL governing council meeting in Mumbai and were returned to the bidders.

"The relaxation [of the clauses] was done because they received letters from many, many companies who had expressed interest but said that the $1 billion net worth criteria, which owners of the existing franchiese were not asked for earlier," Modi said. "So they asked why they were asked for the new criteria which eliminates them from bidding, hence the clause has been amended to give more people the opportunity to bid."

Another clause which was amended was one that stipulated the IPL governing council could, at its discretion, ask the winning bidder to submit 100% of the bid amount. Now, the winning bidder will be required to provide a bank guarantee of 10% of their bid within 48 hours of being awarded the franchise.

The cities in the fray were Pune, Ahmedabad, Nagpur, Kanpur, Dharamsala, Vizag, Rajkot, Cuttack, Baroda, Kochi, Indore and Gwalior. The base price for the bid is more than four times the value set in January 2008, when the original eight franchises were auctioned. Other terms and conditions were similarly stringent - all bidders had to stump up a returnable deposit of $100 million before the bid, as against the $5 million (approximately) stipulated in 2008.

That was intended to keep out frivolous bidding, Lalit Modi, the IPL's chairman, had said. "We put a high-end clause for entry to people, asking them to give $100 million guarantee in advance because we need to get solid companies," Modi had told Cricinfo on Saturday. "This business requires a long gestation period and that is the reason we want to secure ourselves. The BCCI always secures itself."

Another reported condition became the subject of controversy on March 5 when Priyadarshan, an award-winning film director, claimed bidders had been asked to furnish a bank guarantee of $1 billion.

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