Redbird Capital buys stake in Indian cricket team

Manoj Badale, a technology entrepreneur who runs UK-based venture builder Blenheim Chalcot, remains the majority shareholder in the franchise. His entity, Emerging Media, is increasing its position from 51% to 65%. Financial details were not disclosed, but a Financial Times report – linked to from the RedBird website – suggested the deal valued the Royals at $250-300 million.

RedBird’s portfolio includes Fenway Sports Group, the holding company for major league baseball team the Boston Red Sox and English Premier League heavyweight Liverpool, French football club Toulouse, and the US media rights owner for the New York Yankees, Brooklyn Nets, New York Liberty, and New York City, across baseball, basketball, and football.

The firm’s rise tracks that of private equity investment in professional sports franchises globally. This is extending into Asia, with Silver Lake agreeing to pay NZ$387.5 million ($274 million) for a 12.5% stake in the commercial arm of New Zealand Rugby. Rugby Australia has also expressed a willingness to consider private equity proposals.

The IPL was established in 2008 with eight teams representing eight Indian cities. They contest shorter format Twenty20 games – which last about three hours and feature aggressive play – home and away, followed by playoffs to determine the champion. The Royals won the inaugural tournament but have since struggled, coming last in 2020. They were banned in 2016 and 2017 over a betting scandal.

IPL is the most-watched cricket league in the world and among the highest across all sports based on average attendance. The brand value of the IPL ecosystem was INR458 billion ($6.17 billion) in 2020, according to Duff & Phelps, down 3.6% year-on-year because of COVID-19. The Royals were worth INR2.49 billion, down 8%, and the lowest of the eight franchises.

Hotstar, an Indian subscription video streaming service owned by Disney, paid $2.55 billion for the IPL broadcast rights over five years ending 2022, a fivefold increase on the previous deal. Chinese mobile phone brand Vivo picked up the tournament’s title sponsorship for the same period for $341 million. This was suspended for 2020, so Dream Sports came in on a one-off basis for about $30 million.

Duff & Phelps noted that, with people forced to spend more time at home, the 2020 edition of the IPL broke TV viewership and broadcast advertising revenue records. It predicted that an increase in the number of teams from 2022 and renewal of the media rights in 2023 could enhance the value of the ecosystem.

“The IPL is a dynamic league with a global audience and forward-thinking mindset regarding fan and player engagement. The Royals have contributed to this progressive approach and we look forward to further supporting its on-field sporting performance, business operations, and contributions to its community,” said Gerry Cardinale, founder and managing partner of RedBird, in a statement.

Other investors have capitalized on the popularity of IPL through fantasy sports platforms. Dream Sports closed a $400 million round at a valuation of $5 billion earlier this year, while rival operator Mobile Premier League has also attracted substantial private funding.

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• Topics
• South Asia
• Media
• Expansion
• Consumer
• India
• Growth capital
• RedBird Capital Partners