Citing losses, Micromax quits Indian team in Bhupathi’s tennis league
Indian consumer electronics company Micromax will no longer be a stake holder in the Indian franchise of Mahesh Bhupathi’s International Premier Tennis League (IPTL). The company held 60% stake in Indian Aces but has chosen to stay away from the intricacies of team handling in the 2015 season.tennis Updated: Nov 20, 2015 08:54 IST
Indian consumer electronics company Micromax will no longer be a stake holder in the Indian franchise of Mahesh Bhupathi’s International Premier Tennis League (IPTL). The company held 60% stake in Indian Aces but has chosen to stay away from the intricacies of team handling in the 2015 season.
“We are not franchise holders anymore but will continue to be associated as a sponsor,” said Shubhajit Sen, chief marketing officer, Micromax. “We have been relooking at our sports marketing strategy and felt there was merit in continuing as a sponsor. Managing a team is not our core competence and was a distraction. We would have had to set up a parallel organisation to manage it. Others may be geared to do that but we are not.”
Lack of Transparnecy
A crucial factor in Micromax’s decision may well have been its internal assessment which put the total loss for Indian Aces in the inaugural season at $3.58 million (Rs 23.7 crore). There were murmurs from within the franchise consortium about escalating costs and lack of transparency over how the money is being spent. From a total budgeted expense of $9,450,000 (Rs 62.6 crore), the Indian Aces’ expenditure amounted to $11,325,634 (Rs 74.9 crore).
“Inaugural season losses are a feature of every league. In season two, the losses will come down by 3/4th and some will even break even,” explains Bhupathi about the overall financial model. It may be recalled that Hyderabad-based PVP Ventures was the first group to take on the Indian franchise only to back off from the IPTL citing differences with the business model.
However, Bhupathi is confident the Indian team will figure in this year’s edition of the IPTL, “…we have not one but multiple investors on board. So that’s not something that is of any worry (sic).” He adds that new names will be revealed on November 27. That’s five days before the event begins at Kobe in Japan.
Sharp business deals
Bhupathi has indeed been a sharp deal maker as illustrated by the sale of the Singapore franchise. He has managed to hike the fee to $13.5 million (Rs 89.3 crore) for the next nine years. The earlier consortium led by Sunil Gavaskar wasn’t interested in continuing after the first season. As such the annual franchise fee for the Slammers is $1.5 million (Rs 9.9 crore) while for teams like Indian Aces it is $1.2 million (Rs 7.9 crore). It could not be ascertained if all the franchises are paying Bhupathi by the January 31 deadline that his agreement states.
Matters with the Micromax-led Indian Aces came to such a head that Bhupathi’s lawyers sent a legal notice to the team in September end asking for unpaid dues to the tune of $2.8 million (Rs 18.5 crore) while informing them of termination of the franchise agreement. However, Bhupathi says all this has now been sorted.
But for those who have bought tickets, Bhupathi insists there is no cause for worry: “…there is no question of the Indian leg being in jeopardy. If it was, we wouldn’t be selling tickets.”