Ex-Royal Challengers Bangalore owner and a subject of a criminal case in India, Vijay Mallya recently revealed his investment choices talking to the media.
The businessman is currently in a state of trouble as he owes up to INR 9000 crore after his airline franchise Kingfisher Airlines had to be shut down earlier this year.
He left the country to London a month ago and is still under scrutiny for many of his activities back in India.
And it is now revealed that Mallya, who stepped down as the chairman of the United Spirits and also lost his ownership of the RCB franchise, has acquired a cricketing team abroad.
Vijay Mallya revealed that he bought the Caribbean Premier League franchise Barbados Tridents for just USD 100 in a recent interview.
“Everyone made a big drama about me acquiring the CPL team Barbados Tridents. It was an acquisition that was not made for any cash. The acquisition was made for just USD 100,” he claimed to speak to the PTI.
When it was announced that Mallya would own a CPL franchise, many experts in India questioned his spending habits even as he is in the middle of a legal case in India.
And this led Mallya to give a public statement that he has not spent a fortune on the Tridents and explained that the Caribbean government helped him buy the franchise for such a low cost.
“Now participation in CPL costs money. So I went to the Barbados government saying I need your support. I met the Prime Minister and the government agreed to support but I paid USD 100 only to buy the team,” he explained.
He went on to make it clear that the cost of running the franchise is around USD 2 million but explained that he studied every aspect of the acquisition and that he needed help from the West Indies government in his new venture.
“Running the team will cost about USD 2 million but the Barbados government is granting subsidies to the franchise. People don’t get it and jump to conclusions without knowing the facts. There is a cost of participation such as player’s salaries and franchise fee. So I worked out all the numbers, studied the model and went to the government asking for help. They were keen to help me,” Mallya added.
The biggest issue with this piece of business is the lack of central revenue from the franchise.
The Caribbean Premier League teams can only generate money through stadium tickets and sponsorship and unlike in IPL there is not central revenue system.
This will leave Mallya to depend on the popularity of the franchise for his earnings.
Mallya with this business joins Bollywood star Shah Rukh Khan who also invested in the Trinidad and Tobago franchise and went as far as naming it Trinbago Knight Riders on the lines of his IPL franchise Kolkata Knight Riders.
Do you think Mallya is justified acquiring a CPL franchise?