The shoe drops

From December 2009, when IPL commissioner Lalit Modi announced the creation of two new franchises, we’ve been waiting for this particular shoe to drop — and it dropped with a resounding clang Sunday, when the IPL management postponed the announcement of the two latest entrants.

There was an interesting conversation on Twitter shortly after the postponement:

@LalitKModi why cancelled

LalitKModi
2:52pm, Mar 07 from UberTwitter

@iamsrk We got letters from many companies saying they wanted to bid. But could not due to 1 billion net worth criteria.

Not reflected in Lalit Modi’s response to Shah Rukh Khan are the real reasons for the postponement: the original terms were completely unrealistic.

The $1 billion net worth clause for potential bidders has been dropped, yes — but significantly, that is not the only clause that has been scaled back or modified. The real keys are, the IPL has reduced the clause demanding advance deposit of $100 million as ‘performance guarantee’ — the new requirement is just $10 million.

Similarly, and even more ludicrously, the IPL had demanded that the winning bidder deposit the full bid amount with IPL; the scaled back clause says 10 per cent of the bid has to be paid down within 48 hours of the announcement.

The $1 billion net worth clause clearly was intended to exclude, not include, and to slant the auction in favor of certain interested parties. Similarly, the other two clauses were thinly disguised attempts by the IPL to get its hands on substantial sums of money under the guise of ‘guarantees’ that it could park in its bank, or invest. If it meant that would be franchises were saddled with crippling bank charges, and further were forced to lock in those sums of money which otherwise could have been invested in the franchise’s core business, that was not the IPL’s concern.

Clearly, Modi over-reached; as clearly, he has ended up with a bit of egg on his face and the consequent need to scale back dramatically. Meanwhile, if events leading up to this weekend’s auction are any indication, the next few days promise considerable interest: already, MPs of various stripes have been active behind the scenes in pushing the case for this or that franchise; some media houses and their high-flying heads have also taken a hand, largely playing go-between roles. With the clauses having been scaled back and consequently, there being more entities in the fray, expect the back-room games to get incrementally dirtier between now and March 21.

Thoughts?

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9 thoughts on “The shoe drops

  1. It is important for the survival IPL to get two new teams and sign up more international players. CA with some help from few in ECB been planning a tournament like IPL. Something might surface in few months when IPL3 concludes and existing contracts of some of the international players expire… Not surprised why LM acting fool, his job was extended just for this year.

  2. We will soon learn that this relaxation in conditions will cause the bid amount to go up drastically.

    Lalit Modi can still come out laughing out of this.

  3. In some way, it is a bit unfair on those 2 that were legal bids. It is not their fault that no one else came forward. They did satisfy the rules! So, “legally?” they should have been declared as winning bids 😛

  4. Too much greed killed the golden goose, (to use metaphors like a top sports writer we all know :-)). Even the fracas over the media broadcast issues stem from this. Just trying to extract as much money as possible immediately with no view about what or how the other stakeholders will sustain / leverage their investments.

  5. Ravindra Jadeja’s appeal was rejected …poor guy thought ..even he can make also play with the rules ..its only for the BOSSES

    • The action taken against Jadeja is too harsh…BCCI, Modi and the franchise are being mean…Jadeja is still young and may be he comitted a mistake but the establishment can show some grace and maturity

      • i dont buy the “young guy” excuse…he is a professional sports man, part of Indian team, with plenty of options to look for advice…

        but still i dont understand the mistake he committed. he might have done something wrong, but WHAT IS IT, since RR didnt offer him a new contract?

  6. They found later that there were just 2/3 bid which qualified the earlier criterion. This they would have discovered days back as last date for bidding ended almost a week back.
    They could have announced re-bidding then itself.

    The reasons for re-bidding could be several.
    Perhaps someone Modi wanted could not bid earlier and he has relaxed the criteria to accmodate them. Perhaps somone Modi DID NOT WANT was winning the bid and so he cancelled this and relaxed the criterions for other parties to jump in.
    Where there is huge money, there is bound to be corruption.

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