Global private equity investors like KKR and Blackstone have a new investment hotspot in India: cricket. The Indian Premier League, the world’s richest cricket league, counts Bollywood stars, Indian tycoons and spirits maker Diageo among its backers, but is now attracting major private equity firms with the prospect of rapidly rising revenue and profits and massive viewership globally.

The business value of the league, popularly called the IPL, surged to a record $18.5 billion last year, US-based investment bank Houlihan Lokey says. That’s much smaller than America’s National Football League (NFL) valued at $227 billion and the National Basketball Association (NBA) worth $165 billion, but on a per-match basis the IPL is now the world’s second-most valuable sports league after the NFL, a Reuters analysis from Mumbai stated.

KKR and Blackstone are eyeing stakes in the winner of last season, Royal Challengers Bengaluru (RCB), two banking sources said. KKR is also reviewing a possible stake in the Rajasthan Royals team, while Swiss-based PE firm Partners Group is considering at least one team for investment, sources said, according to the Reuters report.

It was a blockbuster IPL deal by European private equity firm CVC Capital that triggered the new wave of interest among investors, bankers say. CVC sold a majority stake in the Gujarat Titans, netting a return of more than 350 percent in dollar terms just four years after acquiring it. The deal valued the team at $900 million.

“India’s structural economic growth should continue to support long-term value creation,” said Siddharth Patel, a managing partner at CVC Capital, “Combined with the scarcity of IPL franchises, it is clear why there is such intense investment interest from both industrial groups, family offices and private equity investors.”

Since the CVC deal, several enquiries have come in from private equity clients in the U.S. and Europe for IPL stakes, said Harsh Talikoti, a sports deals specialist at Houlihan Lokey in Mumbai.

“The IPL model proved you can generate serious profit,” he said. Blackstone, KKR, Partners Group and Royal Challengers Bengaluru declined to comment, while Rajasthan Royals did not respond to Reuters’ requests for comment. The sources declined to be named as the talks are private.

The IPL has reshaped the game in a country where the top cricketers are often worshipped. Last year, IPL had a record 1.19 billion viewers across digital and TV, far larger than the NFL.

Each year after an auction for global players, IPL teams compete in matches in the 20-over format of the game. The next season starts March 26.

Key factors driving investor interest in the league are a doubling in the value of broadcast rights to more than $6 billion in the most recent auction in 2022, rising franchise revenues and the Indian cricket board BCCI’s pooled revenue-sharing model that bolsters team revenues.

The board pools media rights and league sponsorship funds, keeps half, and distributes the rest equally among the teams — a structure far more centralised and evenly shared than, say, in the NBA.

(Image courtesy IPL website and BCCI)