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Did Patel try to con Tharoor?

Was there a covert attempt by the IPL bosses to mislead the bidders of the Kochi team by providing grossly undervalued estimates of team earnings?

india Updated: Apr 23, 2010 00:24 IST
Gaurav Choudhury

Was there a covert attempt by the IPL bosses to mislead the bidders of the Kochi team by providing grossly
undervalued estimates of team earnings?

It has been reported that, at former minister of state for external affairs Shashi Tharoor’s request, civil aviation minister Praful Patel’s office forwarded him a document giving projections of new franchise valuations. There is furious media debate over the propriety of Patel having sent the material, with arguments over whether it was a ‘public document’ or not flying thick and fast.

But HT has found the proje-ctions sent were greatly undervalued. If the Kochi consortium had bid using those as its basis, it would surely have lost.

The bidders for Kochi team were not naïve. They also consulted a former cricket icon and a present cricketer, based on whose advice they sent in a much higher bid and won the team, sources, requesting strict anonymity, said.

IPL’s chief executive officer (CEO) Sundar Raman sent out a mail to IPL hospitality manager Poorna Patel – Praful Patel’s daughter - on March 19, two days before the auction took place, which carried estimates showing that teams will continue to rake in losses for the next 10 years.

Raman’s analysis was based on the assumption of a franchisee fee of $25 million a year (Rs 125 crore at an exchange rate of Rs 50 to a dollar).

The cost and earnings analysis was sent to Poorna who forwarded it to her father and secretary Champa Baratwaj, who in turn forwarded it to Tharoor. According the analysis sent by Raman, the two new franchisees, in 20110. would earn about Rs 60 crore from the IPL’s central revenue pool.

All of IPL’s revenues and costs can be split into the central level and the franchisee-level. Central revenues come from event broadcasting and sponsorship, a portion of which is split with the teams.

Analysts tracking the league in 2010 had estimated that each franchisee would be entitled to around Rs 120 crore of from the central revenue pool. From broadcasting revenue itself, each franchisee would earn Rs 67.5 crore, which is higher than
Raman’s estimate of each team’s share from the central revenue pool for 2011!

Was there a clever plan to make the Kochi-team put in a low bid, and thereby lose out? The higher the bid, the higher would be the losses. Sources, requesting strict anonymity, said that had the Kochi team relied solely on this analysis, it would have restricted the bid to about $250 million (about Rs 1150 crore).

“They consulted two top cricketers past and present and offered a 33 per cent higher bid,” said the source. Rendezvous Sports eventually won the Kochi team for a bid of $333 million (Rs 1532 crore), beating a consortium led by Videocon by $13 million (Rs 60 crore)

Praful Patel, Tharoor chat in Lok Sabha

New Delhi: Civil Aviation Minister Praful Patel and T’puram MP Shashi Tharoor were seen having a long chat in Lok Sabha on Thursday, a day their alleged link in the IPL bids was being reported.

As Patel took a seat in the back benches of the House on the treasury side, Tharoor soon went and sat beside him. The two then started their discussion, oblivious to proceedings. They sat together for 15 minutes after which Patel left the House.