The enchanting Sirens and their preys in IPL

Sirens are seductive female creatures in Greek mythology who lured nearby sailors with their enchanting music and voices to shipwreck on the rocky coast of their island.  The sirens are probably best known for their part in the Odyssey where their song lured sailors to their death.  Odysseus ordered his crew to plug their ears with wax (on the advice of Circe) so as not to be lured by the Sirens' song.  In another story from Greek myth, the story of the Argonauts, Orpheus sang sweetly enough to keep the men from succumbing to the Sirens.

There were either two or three Sirens, who were the daughters of the sea god Phorcys or the river god Achelous.  The Seirenes were depicted as birds with either the heads, or the entire upper bodies of women.  In mosaic art they were depicted with just bird legs.

The IPL in many ways is proving to be the new Sirens for the people associated with it.  The IPL was conceived by Lalit Modi, the then IPL commissioner and vice president of BCCI.  The commercial success of the IPL and Modi’s total control over the league had made him a superhero in India and the world of cricket.  In 2010, it was Modi who oversaw the bidding process and creation for the creation of 2 new teams in the IPL.  Sahara won the Pune franchise whereas Kochi was won by a consortium of investors.  A Twitter entry by Modi declaring the stakeholders of the Kochi IPL Team allegedly breaching confidentiality agreements led to the resignation of the then Indian Minister of State for External Affairs, Dr. Shashi Tharoor.  Modi was then suspended as Chairman and Commissioner of the IPL in April 2010.  The sirens had their first victims.

On September 19, 2011, the BCCI announced that the Kochi Tuskers Kerala IPL franchise was terminated for breaching its terms of agreement.  This meant that the 2011 IPL season was the only season in which the Kochi team participated.

Vijay Mallya, in early 2008, paid in excess of $100 million to buy the Bangalore franchise.  At that point, his businesses were roaring and his net worth was in excess of $1.2 billion.  His liquor businesses were riding high and his Kingfisher Airlines was the only 5 star airlines in the Indian skies and was showing promises.  Today, 7 years later, the king of good times, is facing the worst times ever and is down to his knickers (just like the models in his Kingfisher calendar), has lost control over his flagship companies USL and United Breweries.  He has been declared “willful defaulters” by the banks.  The sirens had their biggest catch.

Mukesh Ambani, Asia’s second richest person in 2008 with a $43 billion fortune, paid $112 million for the Mumbai franchise of IPL.  Today Ambani’s net worth has more than halved though he still remains the second richest Asian.  Reliance Industries is no longer the darling of the Indian stock markets and is having continuous spats with the government over some blocks or other.  His new ventures Reliance Retail is yet to show the money.  Reliance Jio is still to come to the market, although it has been quite many years that he had won the airwaves.

G. M. Rao of GMR owns the Delhi Daredevils team has seen his net worth erode with the falling stock price of his GMR infrastructure.  His fortune, which was over $5 billion when bought IPL franchise in 2008, is now down to less than one-fifth of that value (share price 15.2 on December 11, 2015 versus around Rs 454.88 on July 13, 2007).

T. Venkattram Reddy, a newspaper baron and chairman of the Deccan Chronicle, bought the Hyderabad franchise, Deccan Chargers, $107 million in the IPL team auction in 2008.  The Reddy’s are now in the middle of a financial mess and their net worth (considering the loans and over pledging of their shares) are in the negative.  T. Venkattram Reddy was arrested by CBI on February 2014 for bank fraud.

The owners of the franchises of Punjab have had their share of ill luck with their franchises being cancelled and then subsequently keeping their franchises through court orders and are going through arbitration.  Film actor, who partly own these franchises, have all but finished her career in the acting arena and the personal chemistry between the actor and industrialist has gone for a toss over the years.

The Rajasthan franchise likewise has been suspended from IPL for 2 years, film actor who partially owned the franchise is no more seen in films and was last heard writing books.

Subrata Roy of the Sahara Group bought the Pune franchise for $370 million.  Subrata Roy is fighting legal battles with SEBI and is in Jail for almost 2 years now.

N Srinivasan, owner of the Chennai franchise (through India Cements) has lost his post in BCCI, ICC and his team remains suspended for 2 years.  The company India Cements which is the owner has lost two-third of the value (from Rs 329 on December 14, 2007 to Rs. 81.15).

The owners of the Kolkata franchise perhaps are the only ones who have been largely unaffected by the enchanting music of the sirens as are largely going around with their other business as smoothly as ever.

Now, two more companies have entered the IPL for 2 years.  Sanjiv Goenka through a subsidiary of CESC has bought the Pune franchise and Intex has bought Rajkot franchise through a negative auction route (at negative 16 cr and negative 10 cr respectively).  While Intex is not listed in the bourses, the market has already seeing it as an unrelated and risky diversification for Goenka's flagship firm CESC Ltd, which has steady cash flow from power distribution.  Shares of CESC and group companies like Phillips Carbon Black and Saregama are expected to take huge beating if the sirens can have their latest prey.

Although primarily none of the owners have lost heavily on their cricket teams and most of the franchises are making money, IPL seems to have uncanny similarities with the Greek Sirens.  Only time will tell if the new owners (Pune and Rajkot) fall prey to the sirens or keep their ears plugged with wax à la Kolkata (franchise owners).