Investors chase Indian Premier League to ride booming cricket economy

Indian cricket is increasingly a hot property for investors looking to cash in on the booming business of the sport that is hugely popular across the subcontinent.

The Indian Premier League or IPL has seen two of its franchises sold to investors at billion-dollar-plus valuations in just over a month; the latest being the Rajasthan Royals, which were purchased this Sunday and are valued at $1.65 billion.

A consortium of US investors led and supported by Kal Somani Rob Walton of Walmart Group According to multiple media reports, he was in the running to buy the Rajasthan Royals but lost out to global steel magnate Laxmi Mittal and Indian vaccine tycoon Adar Poonawalla.

Somani’s group He expressed his disappointment Failing to own the franchise, according to ESPN. “We are all motivated by the opportunity to help take the IPL to new international heights,” the consortium said.

In late March, a group comprising Blackstone and American sports investor David Blitzer acquired the IPL’s Royal Challengers Bengaluru, or RCB, franchise in a $1.8 billion deal.

IPL is a fast-paced, franchise-based cricket league founded in 2008, bringing together the best international and Indian talent. Played over approximately two months each year, the game features 10 teams and offers a mix of high-intensity cricket, celebrity ownership, entertainment and large TV and broadcast audiences.

Cash flows and valuations, as well as investor returns, have been very successful. “When compared to global deal benchmarks, IPL returns stand out in terms of their pace and growth profile,” said Walton, whose private equity firm CVC Capital estimates it has achieved a 350% return. last year When he sold his 67% stake in IPL franchise Gujarat Titans. There was CVC Bought Gujarat Titans In 2021.

Take RCB, a franchise that has a huge fan base despite only winning the league once since its inception.

RCB returned 37 times the invested capital after being sold for 166 billion rupees in March. Indian businessman Vijay Mallya, former owner of United Spirits, recently stated: Bought RCB for 4.5 billion rupee. When Diageo acquired United Spirits in 2013, ownership of RCB was transferred to the drinks maker.

“[IPL] “Franchise valuations have multiplied several times over the last decade and returns rival the top US leagues,” said Gareth Berlee, director of Singapore-based Mason Rae Capital, which specializes in fundraising for sports assets.

Compared to the NBA and the English Premier League, India’s cricket league is at an early stage of maturation, so its growth trajectory will be steep even though the absolute value will be lower, experts said.

“In my view, investors are buying what U.S. assets looked like 12-15 years ago, but this time with a much larger population and digital audience,” Berlee said in an email response to CNBC. he said.

He said the next phase of growth would be the globalization of leagues, more monetization of digital spectators and commercial expansion beyond matchday revenues. Some of it is already ongoing.

According to market research firm Nielsen, More than 66% of people play cricket in India fans – about 950 million. This presents tremendous growth potential as rising disposable income drives up spending on tickets and merchandise, experts told CNBC.

Amitesh Shah, founder of sports management company LegaXy, said fans were “buying tickets at prices unimaginable a few years ago”, adding that fans’ interest in the sport “doesn’t stop when the last ball is bowled”.

Shah said they spend on products, subscribe to platforms specifically to follow their teams, and participate in brand campaigns that result in purchases.

IPL teams are now full-fledged sports and entertainment franchises.

The IPL 2025 season was watched by more than 1 billion people on television channels and digital platforms and attracted great attention. 3.83 billion interactions on social media. Approximately 44% of viewers also participated in a live trivia game played for free during the match.

There is no better example of the appeal of these franchises among the local and Indian diaspora fan base than the Mittal family, which has its roots in the state of Rajasthan.

“I love cricket and my family is from Rajasthan, so there is no IPL team I would rather be a part of other than the Rajasthan Royals,” Mittal said in a statement announcing the acquisition.

Experts said that from a buyer’s perspective, IPL ticks all the right boxes and is the only profitable bet investors can take on Indian sports as of now.

Karan Kalra, managing partner at law firm Bombay Law Chambers, said it has a huge and growing fan base, earnings are predictable and there is little external risk as revenue from media rights arrives before the season starts.