KKR, Blackstone, other global private equity firms now eye investment in cricket league IPL — Details here

MUMBAI, Feb 17 (Reuters) – Global private equity investors such as KKR and Blackstone have a new investment destination in India: cricket.

The Indian Premier League, the world’s richest cricket league, counts Bollywood stars, Indian businessmen and liquor maker Diageo among its supporters, but is now attracting interest from major private equity firms on the prospect of soaring revenues and profits and mass audiences around the world.

US-based investment bank Houlihan Lokey says the commercial value of the league, popularly called IPL, reached a record high of $18.5 billion last year.

This is much smaller than America’s National Football League (NFL), which is worth $227 billion, and the National Basketball Association (NBA), which is worth $165 billion, but on a per-game basis the IPL is now the second most valuable sports league in the world after the NFL.

KKR and Blackstone are planning to take stake in last season’s winner Royal Challengers Bengaluru (RCB), two banking sources said. Sources said KKR is also reviewing a possible stake in the Rajasthan Royals team, while Switzerland-based PE firm Partners Group is considering at least one team for investment.

Bankers say it was European private equity firm CVC Capital’s blockbuster IPL deal that triggered the new wave of interest from investors. CVC sold a majority stake in Gujarat Titans, making a return of more than 350% in dollar terms, just four years after acquisition. The deal valued the team at $900 million.

“India’s structural economic growth must continue to support long-term value creation,” said Siddharth Patel, managing partner at CVC Capital.

“Coupled with the scarcity of IPL franchises, it is clear why there is such intense investment interest from industrial groups, family offices and private equity investors alike.”

Harsh Talikoti, sports deals expert at Houlihan Lokey in Mumbai, said there has been a lot of demand for IPL shares from private equity clients in the US and Europe since the CVC deal.

“The IPL model has proven that you can make serious profits,” he said.

Blackstone, KKR, Partners Group and Royal Challengers Bengaluru declined to comment, while Rajasthan Royals did not respond to requests for comment from Reuters. The sources declined to give their names because the talks were private.

Central Repository and Broadcasting Rights Award

The IPL has reshaped the game in a country where the best cricketers are often worshiped. Last year, IPL reached a record 1.19 billion viewers across digital and TV; That’s a much larger number than the NFL.

Following an auction for global players every year, IPL teams compete in matches in over 20 formats of the game. The next season starts on March 26.

Key factors driving investor interest in the league include the doubling in value of broadcasting rights to over $6 billion in the latest auction in 2022, rising franchise revenues and Indian cricket board BCCI’s pooled revenue sharing model that supports team revenues.

The board pools media rights and league sponsorship funds, retaining half and distributing the rest equally among the teams; it’s a much more centralized and equally shared structure than, say, the NBA.

CVC’s Patel said the model ensured every team was well-funded to acquire players and with regular player auctions every team could compete for the title in a season. This “helps maintain strong audience engagement and provides franchises with predictable economics through the media rights cycle.”

Indian businessman Mohit Burman, who co-owns the Punjab Kings team with Bollywood star Preity Zinta, said sponsorship revenue is growing by 30% annually, but the real attraction for private equity firms is the revenue sharing model.

“The IPL can certainly rival and in some cases outperform the US leagues in terms of investor returns, even if the absolute scale is different,” Burman told Reuters.

He said each IPL franchise earns around $55 million a year from the board’s pool. On top of this, ticket sales and other sponsorship earnings are also added.

“The asset class has clearly come of age,” Burman said.

BCCI and other IPL teams did not respond to Reuters’ questions.

Investment Risks

Reliance and Disney merged their businesses in India in 2024 and together they now own the broadcast and TV broadcast rights of the IPL through 2027, costing $6.2 billion. Jefferies analysts say the value of these rights per match makes the IPL the second highest valued rights globally after the NFL.

But there are risks for investors, too.

With similar leagues gaining traction in South Africa, the UAE and Australia, cricketers must juggle an increasingly crowded franchise calendar alongside their international commitments.

The biggest issue is concern that the Disney-Reliance merger would mean less competition and net fewer dollars for teams in the 2027 streaming auction.

Indian billionaire Sanjiv Goenka disagrees. In an interview last year, he had said that his purchase of the IPL team for $781 million in 2021 was a “reward deal” and broadcast rights would become even more expensive.

Many investors, including Goenka’s Group and Mukesh Ambani’s Reliance, bet a total of ₹500 million on the England and Wales Cricket Board’s hundred-ball league last year.

Rising Team Revenues

The NFL opened its teams to private equity investors in 2024, and the NBA allows such investments with strict ownership limits. IPL has no such restrictions, allowing more private equity play.

Team revenue, earnings growth and a limited number of teams are big attractions. There are 32 teams in the NFL while there are 10 teams in the IPL.

Reuters analysis of regulatory disclosures showed that at least five IPL teams have more than doubled their revenues on an absolute basis since 2022, with two of them even doubling their profits. Three other franchises also doubled their profits (but not their revenue) during the same period.

Kolkata Knight Riders, partly owned by Bollywood star Shah Rukh Khan, reported revenues of $76.8 million for 2023-24, up 119% from the previous year. Net profit increased sixfold to $19.4 million.

Sumat Chopra, head of private equity at consultancy Kearney, which advises clients on the IPL, said there were more positive developments as key players increased their team revenues. Top players like India’s Virat Kohli and Australia’s Pat Cummins are playing in the IPL.

“IPL franchise valuations are likely to rise steadily over time, fueled by a growing media economy.” ($1 = 90.7500 Indian rupees)