April 24, 2024
Another measure of India’s commercial dominance of the sport is the share of earnings for BCCI from ICC, which, at 38.5% for the 2024-2027 period, will be the highest for any association, and 5.5 times that of the England and Wales Cricket Board (ECB), the second highest. No other cricket association in any other country gets a double-digit percentage share.
The T20 format has created significant opportunities in the sports finance industry. IPL, which started in 2008, has transformed the global cricket landscape and established itself among the most successful leagues across all sport globally. Viewership for IPL set a record for the time, with the 2023 IPL final in May achieving 32 million concurrent views on JioCinema, with millions more watching it live on linear TV. Under the current media rights deal ($6.2 billion over five years), IPL is the second most valuable global sports league on a per-match basis, at about $15 million a match, behind only the NFL at $23 million.
This has put IPL on the radar for investors, who increasingly view IPL teams as an investable asset and with the potential to become public companies. PE investors who have invested in IPL teams include CVC (which acquired the Ahmedabad expansion franchise in 2021 for a $750 million commitment) and RedBird (which invested in the Rajasthan Royals in 2021 for a reported $250 million). In comparison, RP Sanjiv Goenka Group committed $950 million for the Lucknow franchise in October 2021, highlighting the appetite for team ownership among Indian entrepreneurs as well.
The structure of the league also makes investing in teams attractive as there is no relegation and high visibility on revenue from media rights. There is also cost control in the form of player salary caps, no transfer fees and limited capex requirements on stadiums and infrastructure. All but two of the expansion teams (who have committed franchise license fee obligations) are cash-flow positive and profitable. This differentiates IPL from most other sporting leagues in the world, driving more investor interest in the opportunity.
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