CHENNAI: Two of the founding eight members of the Indian Premier League (IPL), Royal Challengers Bengaluru and Rajasthan Royals, were sold for a combined sum of over Rs 31,500 crore. After months of speculation and back-channel lobbying between potential buyers and the owners of the two franchises, it's understood that they shook hands. Before getting into the specifics of both deals, it's important to keep in mind that the sale process will only be complete once the Board of Control for Cricket in India (BCCI) ratifies the deals (there will be other players as well who will take a look at the fineprint). It's expected that new owners will be in situ post the completion of this edition of the Indian Premier League (IPL).
Firstly, RR. The Kal Somani-led consortium is set to sign the club for around $1.63bn. It 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 $67mn. 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.
A lot of companies showed their interest in bidding for RCB. It very quickly became a bidding war, something Diageo wanted as it would push the price up. It was expected that the winning bid would comfortably exceed $1.5 bn because of the side's brand value. At over $265mn, it's the highest among all 10 sides.
A consortium led by the Aditya Birla Group (ABG), a late entrant, acquired 100 percent equity stake for $ 1.78 billion (approximately Rs 16,706 crore). Other parties involved in the group are Blackstone's perpetual private equity strategy, BXPE, Bolt Ventures, owned by American investor David Blitzer, and Times of India. "United Spirits Limited, pursuant to the meeting of its Board of Directors, today announced that it has entered into definitive agreements for the sale of the 100 percent equity stake held in its wholly owned subsidiary Royal Challengers Sports Private Limited (RCSPL) to a consortium," the USL said in a statement.
"The consortium comprises Aditya Birla Group (ABG), The Times of India Group (Times), Bolt Ventures (Bolt), and Blackstone's perpetual private equity strategy, BXPE (Blackstone) for a total consideration of INR 166.6 bn in an all cash transaction," the statement added.
The transaction includes RCB's men's and women's (WPL) teams.