CHENNAI: Rajasthan Royals, one of the founding members of the Indian Premier League, is to be sold for about $1.63 billionn (Rs 15300 cr). The sale process, in the works for at least the three months, has been completed by US-based Kal Somani, who had invested in Royals in 2021 as well. The Somani-led consortium also comprises Rob Walton (Walmart family) and the Hamp Family (Ford Motor company). Walton and Hamp also own sporting properties in the US.
Somani, a tech entrepreneur, founded IntraEdge (technology services and solutions), Truyo.Ai (data privacy rights and AI governance) and Academian (edtech services). Royals, the winners of the inaugural edition in 2008, were picked up for $67million. In 2021, when there was a funding drive, the team was valued at just over $250mn. This shows that the team's valuation has jumped by over 6x in five years.
"We see huge potential with this investment, and we are excited for the future of the IPL," Somani had said in 2021.
When Royals were bought in 2008, it was the cheapest in terms of valuation. But this once again shows the IPL's robust growth story. The sale is subject to BCCI clearance but there isn't expected to be any glitches (it will officially change hands after the season).
One reason why team valuations have continued to grow is because of its attractiveness in terms of a closed door league. With no threat of relegation and salary caps in place — most of the US' big leagues share these two attributes — rich US individuals know their investment will not suffer.
With the IPL showing they are even immune to a global pandemic when the last rights went up for auction, this is a sellers market.
There was a bidding war, something the franchise' owners wanted when they went public, before the Somani-led consortium won the right to own the side including their sister properties in South Africa and the West Indies.
Eyes on RCB
With RCB's current owners also seeking a sale, there could be one more outright sale in the days. Diageo plc are in the final leg of wrapping up the sale process even if there are still multiple potential buyers still in the fray. The going rate for RCB was reported to be well over $1.4 bn but with Royals itself commanding a valuation in excess of $1.5 bn, one wonders if the existing owners may decide to relook the fineprint before signing off. Considering RCB's brand worth is over $265 mn — highest among the 10 franchises according to a study by a global investment bank — they will believe they can quote a figure at least close to $2 bn.