Anshu Jain, Deutsche Bank’s global markets head, is understood to have put in a bid for one of the eight teams of Indian Premier League. Mr Jain is widely tipped to be the next Deutsche Bank CEO and has been described by some British papers as a ‘cricket nut’. He is the captain of the Desutche Bank Cricket Team and also the head of Deutsche’s most profitable division. In other words, not only does he have the money but the cricketing credentials as well.
Mr Jain is not the only financial investor to consider bidding for the franchise rights. The Indian Premier League has got a number of private equity funds lining up to bid for the eight franchises on offer. Among those who have picked up bid documents for IPL franchises include Temasek, India Value Fund (formerly GW Capital) and Macquarie Bank.
Says a source, “Temasek’s head office in Singapore was hugely interested in the IPL and they were very excited about it.” While Deutsche Bank, the corporate entity, has picked up a bid document, Mr Jain is expected to bid in his personal capacity for the Kolkata franchise. When contacted, Mr Jain, in an email reply, said: “No comments for now.” Till now, only large corporate investors — Reliance Anil Dhirubhai Ambani Group and Kingfisher — have been reported to be interested in bidding for the teams. But If you thought private equity couldn’t look beyond telecom, technology and infrastructure in India, then you are wrong. Big funds are finally looking at cricket as one more asset class they can put their money into.
“It is unlikely that private equity funds will go alone. They will in all probability team up with people who have sports management expertise to finally run the franchise,” says an executive close to the developments.
The biggest interest in the IPL has been shown by Macquarie Bank, according to sources. The Australian bank has shown interest in bidding for a team franchise as well as ground rights and management. The bank’s interest has been fuelled by the fact that Steve Waugh is on its board as a non-executive director.
Future Capital will also be bidding for one of the franchises through Indivision, its private equity arm, which has just raised $400 million. The floor price for each of the eight franchises was set by the BCCI at $50 million for ten years, but the actual bids are expected to be three to four times the floor price.
“To tell you the truth, there is a bit of ego and the lure of glamour in being the owner of a team that has Shane Warne and Sachin Tendulkar,” says the head of a private equity fund who picked up a bid document but is not bidding.
Says the head of a sports marketing company, “Financial investors buying franchises should be taken with a pinch of salt. The tender document itself costs under Rs 3 lakh, so the cost isn’t very prohibitive even if a bidder isn’t particularly serious about it.”
According to experts, private equity investors would be at a disadvantage against the strategic investors. A lot of revenue streams are unclear at this stage. A corporate investor can use the franchise to launch a corporate marketing programme.