The 2 billion-dollar question: Who is buying RCB?

by Vijay Tagore • Last updated on

RCB are the defending champions of the IPL, having won their first title in 2025. © Getty

It is not one but two IPL franchises that are in look out for investors. The Royal Challengers Bengaluru news is already in the public domain and the buzz in the IPL landscape is that one more franchise is also looking to sell a stake, probably a minority equity. With the cost of maintaining an IPL team growing exponentially, the franchise management has been hoping for some investment, for quite some time.

More current though is RCB's search for buyers and the news is that it is not just one, two or three but six parties have evinced interest if Diageo Great Britain, the parent company of the Bengaluru franchise, makes up its mind to finally sell it, something the Indian parties are not still sure of.

The perception is the British liquor company can change its mind at the last minute even though there are suggestions that shareholders of the company are not too happy about continuing with an IPL team, a non-core business of the firm.

It is understood that quite a few Indian and American parties have had conversations with the Diageo management and some of them, as out in the public, are Adar Poonawala of Serum Institute and Parth Jindal of the JSW Group. The Adani Group and a famous business tycoon based out of Delhi with interests in multiple sectors are also believed to be keen on acquiring it. Apart from the four mentioned above, two private equity companies based in the US are also weighing options.

The Poonawala family had previously explored opportunities in an IPL team and Adar's father Cyrus had bought the ITT when the IPL was expanded in 2010 under Lalit Modi. The bids eventually went to Sahara and Rendezvous Sports. It's a different matter that those two teams, based out of Pune and Kochi, didn't last long. Adar created quite a stir recently by posting a comment about RCB. He wrote on X: "At the right valuation, @RCBTweets is a great team...(sic)." The word is he may tie up with an American investment firm.

The Jindal group owns 50 per cent of Delhi Capitals and should it make a serious bid for RCB, it will have to exit DC. The Adani Group's interest in the IPL is well known; it had narrowly missed out buying the Ahmedabad team in 2022, when the Board of Control for Cricket in India (BCCI) sold two new teams.

The biggest factor that can decide whether the team will be bought/sold is valuation. Diageo is said to be quoting USD 2 billion and there are different views on whether an IPL franchise can cost that much. It will depend on the projection of media rights value - a futuristic view - in the next cycle which will come for bidding in the next couple of years. With Star and Jio, the keen competitors of the last cycle, merging, there is a perception that the value may not grow exponentially like it did in the last couple of cycles.

There is also a view that the valuation will inevitably rise after JioStar announced that its subscriber base has expanded beyond 500 million. If it charged INR 100 per month for IPL, the company would earn about INR 50 billion (roughly INR 5000 crore) each month. Given that the IPL is expected to span four months - from March to June - and feature 96 scheduled games, the subscription revenue alone could amount to nearly INR 20,000 crore or USD 2.3 billion over the tournament's duration in one season.

Over five seasons, the broadcaster can hope to earn more than USD 10 billion only from subscriptions. Add to that INR 5000 crore advertisement revenue from one season which could add up to another USD 2.5 billion over five years that constitute a cycle. The media rights value in the last cycle is about USD 6.3 billion. There is always a scope for increase in the media rights value in 2027.

Two private banks, including Citi, are understood to have been appointed by Diageo to advise on the sale. It is not yet clear if the transaction will go through at all, given that Diageo's India arm is reportedly not in favor. A few of its officials were recently in the UK to discuss the matter.

The issue with RCB is not just about valuation. The June 4 tragedy case remains unresolved, and any new buyer may have to inherit it and there is also uncertainty over the ground in Bengaluru city. The M. Chinnaswamy Stadium has been pretty much out of bounds for cricket since the stampede. Full clarity on the sale is expected in the coming weeks.

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