Sacred Games: The new IPL sponsor and its Chinese connections
Backlash against Chinese firms following the deadly border clashes between Indian and Chinese troops forced Vivo to give up sponsorship rights of the Indian Premier League (IPL) scheduled to begin next month in the United Arab Emirates (UAE). But is the 13th edition of the League free of Chinese money?
The new title sponsor, fantasy gaming platform Dream11, was founded in 2008, the same year as IPL, by Harsh Jain and Bhavit Seth. Jain is the CEO and Seth the COO of the company. The group, which claims to have more than 8 crore online users, bagged the rights for Rs 222 crore.
Who owns Dream11?
As per the official website of Dream11, it has received investments from various investors. These include India-based Kalaari Capital and Multiples Equity and US-based Think Investments. Several fund management companies in India, Hong Kong and the UK, such as Steadview Capital Management, are also investors. However, eyebrows are being raised at its Chinese investor, Tencent Holdings.
Dream11’s parent company is Sporta Technologies Private Limited, where Bhavit Seth is the whole-time director and Harsh Jain the managing director. According to its corporate filings, the company doesn’t seem to have received direct investments from these investors, suggesting that the foreign investments may have come via affiliates and subsidiaries.
As per official records, a US-based firm called Dream Sports Inc., with branches in New York and New Jersey, owns 99 per cent of the Indian company. This US firm is also run by Harsh Jain. Earlier in March, Dream Sports Inc. was allotted shares worth over Rs 37 crore (Rs 37,14,49,988) by the management of Sporta. In 2018-19, Sporta reported a turnover of more than Rs 7 billion (Rs 7,75,44,89,804) and its net worth was almost Rs 5 billion (Rs 4,99,35,25,562).
While Dream11 itself has not provided full details of Tencent’s stakes, news agency PTI reported, citing BCCI sources, that the Chinese firm held less than 10 per cent in the company. “Dream11 stakeholders, including its founders plus all 400 plus employees, are Indian,” a BCCI source told PTI.
What is Dream11?
The Dream11 app offers an online platform to users where they can choose a virtual team of real players and earn points based on real-life performances of these players. The winner of the contest earns money, while participants have both free and paid versions of the online content.
Earlier, Dream11 has been the official gaming partner of IPL and ICC tournaments. Apart from cricket, it also offers fantasy hockey, kabaddi and volleyball platforms. In 2019, it signed MS Dhoni as its brand ambassador.
Last year, the Bombay high court heard a complaint which challenged the business model of Dream11 and alleged that it was based on sports gambling. The court ruled in favour of Dream11 and said it was “undoubtedly a game of skill and not a game of chance”.
Also read: IPL 2020 title sponsorship hits roadblock a day after Dream11’s Rs 222 crore bid