Kochi IPL, Kochi Tuskers Kerala to be sold?
Team Kochi is back in the news. Information filtering through its ownership circle is that the Indian Premier League (IPL) team could be up for sale. The team with a multiple ownership has suffered a loss of over Rs125 crore in its first year in the IPL. More than Kochi Tuskers’s poor performance, the cash flow to run the second-most costliest side seems to have hurt them. The team was bought for $333 million (approximately Rs1,500 crore).
Conflicting signals were emanating from the team on Monday. One of the owners confirmed that the team is up for sale, while another said the news was not true. “I can confirm that the team is going for sale,” said one of the owners refusing to divulge more information. Mehul Shah of Anchor Switches, which holds the largest stake in the team, said the team is not up for sale. “We are not selling the team,” he said.
A team insider revealed that the memorandum of understanding was such that the owners hold the first right of refusal if one of them wants to sell his stake. Anchor Switches and Parinee Developers are the major stakeholders in the side.
The team has struggled financially in its first year. It struggled to generate sponsors while the operational expenses were exorbitant. Having bid for $ 333 million, it had to pay Rs150 crore to the Board of Control for Cricket in India (BCCI) towards franchise fee. The player fee was about Rs45 crore and other operational costs were estimated to be over Rs20 crore. In return, they would get about Rs42 crore from the BCCI’s central sponsorship share. The team hardly had any revenue from the gates, having faced problems with the police in Kerala. The sponsorship money was meagre.
“That would have left the balance sheet for the first year with a loss of Rs125 crore. One more year and the losses would double. Who will take such heavy losses,” said an IPL insider who is familiar with the functioning of the IPL teams. The BCCI denied knowledge of the development. Meanwhile, it is learnt that a couple of other teams, who did not do too well in IPL-4, were looking to offload a large chunk of their stakes.
Conflicting signals were emanating from the team on Monday. One of the owners confirmed that the team is up for sale, while another said the news was not true. “I can confirm that the team is going for sale,” said one of the owners refusing to divulge more information. Mehul Shah of Anchor Switches, which holds the largest stake in the team, said the team is not up for sale. “We are not selling the team,” he said.
A team insider revealed that the memorandum of understanding was such that the owners hold the first right of refusal if one of them wants to sell his stake. Anchor Switches and Parinee Developers are the major stakeholders in the side.
The team has struggled financially in its first year. It struggled to generate sponsors while the operational expenses were exorbitant. Having bid for $ 333 million, it had to pay Rs150 crore to the Board of Control for Cricket in India (BCCI) towards franchise fee. The player fee was about Rs45 crore and other operational costs were estimated to be over Rs20 crore. In return, they would get about Rs42 crore from the BCCI’s central sponsorship share. The team hardly had any revenue from the gates, having faced problems with the police in Kerala. The sponsorship money was meagre.
“That would have left the balance sheet for the first year with a loss of Rs125 crore. One more year and the losses would double. Who will take such heavy losses,” said an IPL insider who is familiar with the functioning of the IPL teams. The BCCI denied knowledge of the development. Meanwhile, it is learnt that a couple of other teams, who did not do too well in IPL-4, were looking to offload a large chunk of their stakes.
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