The next two entrants in the world’s richest cricket tournament, the Indian Premier League (IPL), will have to pay a minimum $US225 million ($A244 million) each, more than twice what the highest bidder paid when the first eight team franchises went to auction two years ago.

The auction for the two new franchises will be held in Mumbai tomorrow, with the leading contenders seen as Anil Ambani – India’s second richest man behind his elder brother, Mukesh Ambani – and Subrata Roy’s Sahara Group, which already sponsors India’s national cricket team. If Ambani and Sahara are successful, they are expected to bring the cities of Ahmedabad and Kanpur into the tournament from 2011.

At the initial January 2008 auction, Reliance Industries chairman Mukesh Ambani paid the top price of just under $US112 million for the Mumbai franchise, while the lowest winning bid was $US67 million for Jaipur, paid by UK-based cricket investor Manoj Badale and his partners, who include Sydney-based Lachlan Murdoch.

Apart from Anil Ambani and Subrata Roy,  other possible bidders tomorrow could include Hero Honda managing director Pawan Kant Munjal, Bollywood star Salman Khan and Bharti Airtel founder Sunil B. Mittal. Tata Docomo, which is a telecoms joint venture in India between the Tata Group and Japan’s NTT Docomo, is also thought to be interested.

Board of Control for Cricket in India (BCCI) vice president and IPL chairman Lalit Modi announced the reserve prices on December 17 in Mumbai after the IPL’s governing council confirmed that it would go ahead with an expanded tournament from 2011. Lifting the number of teams in the IPL to 10 will mean the 2011 event will have to cater for 94 matches, up from 59 for IPL 3, which gets underway in Hyderabad on March 12 and finishes in Mumbai on April 25. The $US225 minimum price reflects Modi’s belief that IPL Twenty20 cricket is delivering big value to tournament sponsors and to the eight existing franchise owners.

Modi, a controversial figure who has been the driving force behind the IPL concept, claimed in late 2007 that if the franchisees delivered on their promises, “each of them could grow into $US5 billion entities.” In a presentation last year, he said that an independent study by Repucom Research showed a 300 per cent-plus increase in sponsor value delivered by the 2009 IPL 2 tournament held in South Africa, compared with the inaugural IPL 1 event staged in India in 2008.

UK-based consultancy Brand Finance put a value of $US2 billion on the entire IPL enterprise in May 2009, while in the same month the UK’s Intangible Business and MTI Consulting released its “IPL Brand Value Scorecard,” topped by the Kolkata Knight Riders at $US22 million. The only real valuation to emerge came last February, when Jaipur owner Manoj Badale and his partners sold a stake of 11.7 per cent for about $US16 million, suggesting the franchise, which plays as the Rajasthan Royals and won the inaugural tournament, had a market value then of about $US140 million.

When the first eight city-based franchises were auctioned in January 2008 they carried a $US50 million reserve. Along with Ambani and Badale, the successful bidders included media tycoon T. Venkattram Reddy, owner of the Deccan Chronicle newspaper group, who put up the second-highest amount of $US107 million for the Hyderabad team. Flamboyant liquor and aviation entrepreneur Vijay Mallya agreed to pay $US106 million for his UB Group to own the Bangalore franchise, while south India industrialist N. Srinivasan of India Cements bid $US91 million for Chennai, and billionaire infrastructure king G.M. Rao won Delhi for $US84 million.

A consortium led by Bollywood actress Preity Zinta bid $US76 million for Mohali, just ahead of Indian filmdom’s leading man Shak Rukh Khan and his Red Chillies group, which won Kolkata for $US75.09 million. Back in 2007, the BCCI named 12 preferred venues for the IPL franchises. After the eight cities taken in 2008, the remaining four available are Cuttack, Gwalior, Kanpur and Ahmedabad, though it is possible other cities such as Lucknow could be selected.

Tomorrow’s successful bidders will join India’s most prominent industrialists, media tycoons and Bollywood movie stars as cricket team  owners, all eager to tap into the massive television audiences that IPL delivers and a growing base of middle-class consumers ready to buy sponsors' products and branded cricket merchandise. Whatever the financial result from Tuesday’s auction, Modi’s position as IPL chairman seems secure for the next three years. BCCI president Shashank Manohar said on December 17 that  media reports of a rift between Modi and BCCI secretary N. Srinivasan (the Chennai franchise owner) were baseless. He said Modi was doing an “excellent job” as IPL chairman and would continue in that role through to 2012.