New IPL franchise owners defend “exorbitant” price 31/03/2010 |
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The buyers of the Kochi Indian Premier League franchise have said that the “exorbitant” price they paid to buy the team “is not as high as it seems”.
Rendezvous Sports World Private Limited, a consortium of five companies, bid $333.33m for Kochi and was awarded the franchise on March 21.
But Keshav T, who represents Rendezvous investor Film Waves, said: "I know it seems we have paid an exorbitant price to buy the team but, if you look at the discounted value of what we are paying over the next 10 years, it is not as high as it seems.
"The cost that we pay is based on the business plan, which we feel is viable.”
Doubts were raised about how the two new entrants – Rendezvous and Sahara Group (owners of the Pune franchise for $370m) – expected to recover their investment after paying a sum exceeding the combined value of the eight existing franchises.
However, Keshav added: "We are there for the long haul and we don't expect to make profits in the first year. We have the capacity based on the business plan to sustain."
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