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Indian cricket bowls toward financial big leagues

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Cricket - England v India - Fifth Test - Kia Oval, London, Britain - September 8, 2018 India's Ajinkya Rahane celebrates taking a catch to dismiss England's Jos Buttler Action Images via Reuters/Paul Childs

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MUMBAI, June 25 (Reuters Breakingviews) - Indian cricket is batting to cross the boundary. One of America’s top sports investors has agreed to buy a piece of the Rajasthan Royals in a deal that edges the team, and the fast and flashy Indian Premium League, closer to securing an international sporting crown.

The Royals are one of eight to compete in the popular annual tournament watched by almost half the country’s 1.3 billion people. RedBird Capital Partners is taking a 15% stake, adding to a collection of investments that includes baseball’s Red Sox and soccer’s Liverpool Football Club. The reigning champion Mumbai Indians are a trophy asset of Mukesh Ambani’s Reliance Industries (RELI.NS).

Under terms of the transaction, and another that lifts majority owner Emerging Media’s portion to 65% from 51%, the Royals are being valued at between $250 million and $300 million. That’s around the same as European soccer clubs SS Lazio and FC Porto, both of which rank in the sport’s top 30 enterprises per KPMG’s European Elite 2021 report. It’s only about a third as much as the least valuable Major League Baseball team, the Miami Marlins, based on Forbes figures, but the IPL also only plays for two months a year compared to baseball’s six.

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RedBird’s desire to support commercial growth underscores the lucrative American-style potential of the Indian tournament. Some 45 minutes of advertising already gets crammed into each four-hour-long match. That’s on par with the amount of time devoted to ads during the Super Bowl and much more than in European soccer, where breaks are typically reserved for halftime. Cricket ad-time is also considered recession-proof. Indian broadcaster Star Sports, part of Walt Disney (DIS.N), paid $2.2 billion for the league’s television and digital rights for 2018 to 2022, an extraordinary price for a young league in a poor country.

After a pandemic-induced, mid-tournament suspension, the IPL will resume in September in the United Arab Emirates. It may be without some of its star foreign players, but when the league returns to India it will be in a stronger position to showcase its money-spinning power.

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CONTEXT NEWS

- India’s Rajasthan Royals said on June 24 that American investor RedBird Capital Partners would buy a 15% stake in the Indian Premier League cricket team. Majority owner Emerging Media also will increase its stake from 51% to 65%. The deals value the franchise at between $250 million and $300 million, according to a person familiar the situation.

- RedBird will provide strategic capital and advice to support the team’s long-term growth and commercial objectives, the Royals said in a statement.

- Financial details were reported earlier by the Financial Times.

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Editing by Jeffrey Goldfarb and Katrina Hamlin

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