RCB up for sale, with owners seeking $2 billion valuation: Report
Diageo Plc is considering options for its ownership of the Indian Premier League cricket franchise Royal Challengers Bengaluru.
Diageo Plc is exploring options for its stake in the Indian Premier League cricket franchise Royal Challengers Bengaluru, sources familiar with the matter say. Bloomberg reports that the British distiller has been consulting with potential advisers to explore options, including a partial or full sale of the Royal Challengers Bengaluru cricket franchise, according to sources familiar with the matter. Diageo, which owns the team through its Indian subsidiary, United Spirits Ltd., may target a valuation of up to $2 billion, the sources said. No final decision has been made, and the company may choose to retain ownership, the sources added, requesting anonymity as the discussions are confidential.
A Diageo spokesperson declined to comment, and a representative for United Spirits did not respond to requests for comment. Following reports of a potential deal, United Spirits shares surged as much as 3.3% in Mumbai trading on Tuesday morning, reaching a five-month high. The talks coincide with India’s health ministry’s efforts to prohibit the promotion of tobacco and alcohol brands in the IPL and curb indirect endorsements of unhealthy products by sports figures.
In India, explicit advertising of tobacco and liquor products is banned, but companies like Diageo have leveraged top cricketers to promote other products, such as soda. RCB, one of the Indian Premier League’s founding teams, was originally acquired by beer tycoon Vijay Mallya. After his Kingfisher Airlines Ltd. collapsed in 2012 due to unpaid debts, Diageo gained control of RCB through its acquisition of Mallya’s spirits business.
IPL Champion
RCB recently clinched their first-ever IPL title, led by their star player, Virat Kohli, who boasts one of the largest social media followings among athletes worldwide. The ongoing discussions about the franchise's ownership follow a tragic stampede during RCB’s victory celebration in Bengaluru, where at least 11 people lost their lives due to overcrowding at the venue. The incident has sparked criticism from local authorities, heightened scrutiny over event safety, and increased reputational risks for the franchise’s ownership.
The IPL's soaring valuations have positioned team ownership among the most coveted assets in global sports. A potential sale of RCB could establish a new benchmark for future transactions in one of the world's fastest-growing sports leagues. Transforming into a global entertainment and advertising powerhouse, the IPL now rivals the commercial scale of the National Football League and the English Premier League. Its concise, three-hour matches captivate hundreds of millions of viewers in India and worldwide.
In the U.S, Diageo’s largest market, tariffs and a consumer slowdown have dampened premium liquor sales. Divesting Royal Challengers Bengaluru could free up capital as the company focuses on streamlining operations and reevaluating non-core assets worldwide.
