Sanjeev Goenka has said that he opted to buy an IPL franchise because he has unfinished business in the IPL after his team Rising Pune Super Giant lost the 2017 IPL final against Mumbai Indians by just one run.
Sanjeev Goenka was the highest bidder for the Lucknow franchise last evening and he doesn’t think that the 7000 crore bid put in by his group for the Lucknow franchise is an overvaluation as some people think.
Goenka, while speaking to India Today last evening, explained the maths behind the licence fees. According to Goenka, his group doesn’t really have to pay the whole licence fees in one go, it will have to be paid in installments over a period of 10 years. And every year, the franchises get their share of broadcast money and other fractions of the central revenue from BCCI.
Yearly installment of Goenka’s licence fees will be round about 700 crore rupees and he will get 1/10th of the 50% of the central revenue of the BCCI from the IPL every year, as every other franchise gets.
Goenka believes after deducting their share of the central revenue from their yearly licence fees and yearly operational costs, they will effectively only have to pay half of the licence fees to the BCCI every year.
Sanjeev Goenka believes buying an IPL franchise is a long term investment
Sanjeev Goenka insists that it’s an investment made for long term and it has been done with proper mathematics behind it.
“Seen in that light I am extremely satisfied with how things transpired. The valuations can only increase. It’s simple economics. What I eventually have to pay is the difference between what I get from BCCI by way of broadcast rights etc and what I pay to them as license fees. Seen in that light, the figures are realistic,” Goenka was quoted as saying by India Today.
What’s interesting, however, is that the second highest bid after Goenka was of CVC capitals and they managed to buy the Ahmedabad franchise for 5600 crore, which raised the question if the Goenka group overvalued the Lucknow franchise.
But, that perceived overvaluation might also have come from the fact that Goenka group didn’t want to lose the project at any cost and were ready to go with a slightly higher bid to outbid every other competitor.
