Investors chase Indian Premier League on strong cricket economy

Indian cricket is becoming an increasingly hot asset for investors looking to profit from the burgeoning business of the subcontinent’s hugely popular sport.

In just over a month, two Indian Premier League (IPL) franchises have been sold to investors at valuations of billions of dollars or more, the latest being the Rajasthan Royals, who were acquired this Sunday for $1.65 billion.

A consortium of US investors led by Karu Somani and backed by Walmart Group’s Rob Walton lost out to global steel tycoon Lakshmi Mittal and Indian vaccine tycoon Adar Poonawalla in a bid to buy the Rajasthan Royals, according to multiple media reports.

According to ESPN, Somani’s group expressed disappointment at not being able to own the franchise. “We were all enthusiastic about the opportunity to help take the IPL to new international heights,” the consortium was quoted as saying.

In late March, a group comprising Blackstone and American serial sports investor David Blitzer acquired the IPL’s Royal Challengers Bengaluru (RCB) franchise in a $1.8 billion deal.

Launched in 2008, IPL is a fast-paced franchise-based cricket league that combines top international and top Indian players. Held over nearly two months each year, it features 10 teams and combines intense cricket, celebrity ownership, entertainment, and a massive TV and streaming audience.

Experts say strong capital returns to date and the potential for expansion of the series, supported by a fan base of nearly 1 billion people, are driving interest in IPL from global investors.

“IPL combines strong capital appreciation potential with stable recurring cash flows, making it very attractive to investors,” James Walton, sports business group leader at Deloitte Asia Pacific, told CNBC in an email.

According to Deloitte, the IPL is already the second most valuable sports league after the NFL on a match-by-game basis. The IPL’s valuation is estimated at $18.5 billion in 2025, compared to the NFL’s $227 billion and the NBA’s $165 billion, but compared to the IPL’s 74 games, NFL teams will play 272 games and the NBA’s 30 teams will play 82 games each season.

In addition to cash flow and valuation, investor returns are also very good. Walton estimated that private equity firm CVC Capital earned a return of 350% when it sold a 67% stake in IPL franchise Gujarat Titans last year, and said, “Compared to global trading benchmarks, IPL returns stand out for their speed and growth profile.” CVC had acquired Gujarat Titans in 2021.

Consider the case of RCB. The franchise has a huge fan base despite having only won the league once since its inception.

RCB was sold in March for Rs 166 billion, returning 37 times the invested capital. Indian businessman Vijay Mallya, former owner of United Spirits, recently announced that he has acquired RCB for Rs 4.5 billion. When Diageo acquired United Spirits in 2013, ownership of RCB was transferred to the liquor manufacturer.

“The valuations of (IPL) franchises have multiplied several times over the past decade and are generating returns that are competitive with the top leagues in the US,” said Gareth Burley, director at Singapore-based Mason Rae Capital, which specializes in financing sports assets.

Compared to the NBA and the English Premier League, the Indian cricket league is at an early stage of maturation, and experts believe its growth trajectory will be steeper, albeit lower in absolute terms.

“In my opinion, investors are buying into what U.S. assets looked like 12 to 15 years ago, but this time they’ve outperformed with a much larger population and a larger digital audience,” Burley said in an email to CNBC.

The next phase of growth will be the league’s globalization, deeper monetization of digital audiences and commercial expansion beyond game day revenue, he said. Some are already underway.

According to market research firm Nielsen, more than 66% of Indians (approximately 950 million people) are cricket fans. Experts told CNBC this has huge growth potential as more disposable income means more spending on tickets and merchandise.

Amitesh Shah, founder of sports management company LegaXy, said fans are buying tickets at prices “that would have been unthinkable a few years ago” and added that fan engagement with sports “doesn’t stop when the last ball is bowled.”

They spend money on products, subscribe to platforms specifically to follow teams, and participate in brand campaigns in ways that ultimately lead to purchases, Shah said.

The IPL team is now a full-fledged sports and entertainment franchise.

IPL 2025 season was watched by over 1 billion people across TV channels and digital platforms and generated 3.83 billion interactions across social media. Approximately 44% of viewers also participated in the live quiz game, which was free to play during game time.

There is no better example of the appeal these franchises have among local and Indian diaspora fan bases than the Mittal family, which has roots in Rajasthan.

“I love cricket and my family is from Rajasthan, so there is no IPL team I would rather be a part of than the Rajasthan Royals,” Mittal said in a statement announcing the deal.

From a buyer’s perspective, the IPL ticks all the right boxes and is the only profitable bet investors can take on Indian sports at the moment, experts said.

Karan Kalra, managing partner at law firm Bombay Law Chambers, said the team has a huge and growing fan base, revenue from media rights is predictable because it comes in before the season starts, and there is little external risk.