Bowling for Dollars: Despite the rise of T20 leagues in cricket, the IPL remains the world’s premier league.
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The average Indian Premier League team is now worth more than $1 billion. That number would rise from a major Saudi investment.
The Indian Premier League Cricket has been a great investment. In 2009, a year after the franchise-owned cricket league launched, Forbes pegged the average franchise value at $67 million. By 2022, the average IPL team had soared to $1.04 billion thanks to the expectations around the next media contract—a $6 billion deal was inked a few months after our valuations were published—and the influx of private equity money from the likes of RedBird Capital and CVC Capital into the league.
Although several Twenty20 leagues have sprung up since the IPL was launched, India’s Premier League remains incredibly popular with a global audience. The sport generates massive viewership numbers, with Reuters reporting in June that more than 120 million unique viewers tuned in to watch the Chennai Super Kings defeat the Gujarat Titans in a dramatic final to win their record-tying fifth IPL title, with a peak concurrency of 32.1 million. Twenty20 cricket, also called T20, is a truncated form of the sport that revolutionized the game when it was introduced in 2003 with rule changes that put a premium on hitting and scoring. Cricket is also returning to the Olympics in 2028, so IPL team values may surge further.
This morning, Bloomberg reported that “Saudi Arabian Crown Prince Mohammed bin Salman’s advisers have spoken to Indian government officials about moving the IPL into a holding company valued at as much as $30 billion.” Forbes has confirmed this interest with an owner of an IPL team. An investor in an IPL team contacted by Forbes thinks a major investment by Saudi Arabia would not happen until after the next national elections are held in India next April.
Saudi Arabia—via its $700 billion Public Investment Fund (PIF)—has been making a huge push into sports recently, including a possible investment into the PGA Tour. The PIF has pumped money into everything from Formula 1 and WWE to European soccer and the new African Football League. Saudi Arabia is also due to host the Spanish, Italian and Turkish Cup finals and the 2027 AFC Asian Cup, and it appears in line to host the 2034 FIFA World Cup.
As reported by BBC Sport, a study published by Play the Game—run by the Danish Institute for Sport Studies, which is funded by the country’s government—found that Saudi Arabia currently has 312 sponsorship deals across 21 sports, as well as multi-sport events. The research details how soccer is the main focus, with 83 of the 312 deals; motorsports (34) and golf (33) are the two sports with the greatest number of agreements after that.
True, the Saudi investment in the IPL would go to the Board of Control for Cricket in India (BCCI), the custodian of the IPL. But the IPL teams would benefit from marketing, sponsorships and investment in cricket stadiums. Last year, the founder of the IPL said the BCCI should demolish its old stadiums and build state-of-the-art stadiums, as is done with U.S. sports, to generate a lot more revenue.
One private equity investor in the IPL told Forbes he believes the Saudi investment could mean extending the IPL season, which is currently 14 matches per team, held between March and May.
In 2021, the IPL sold two expansion teams, increasing the size of the league to ten teams, from eight: CVC Capital paid around $750 million for the Gujarat Titans, and Sanjiv Goenka purchased the Lucknow Super Giants for about $950 million. (The expansion fees will be paid over ten years and redistributed in equal amounts to the other eight teams.)
Those entry prices are looking pretty cheap today.
