Diageo Plc is exploring options regarding its ownership of the Royal Challengers Bengaluru (RCB), the Indian Premier League cricket franchise, according to individuals knowledgeable about the situation. RCB achieved their maiden IPL victory recently.
RCB, an original IPL franchise with Virat Kohli as one of its key players, was first owned by Vijay Mallya, who ran the now-defunct Kingfisher Airlines Ltd. that ceased operations in 2012. The team subsequently came under Diageo's ownership following their acquisition of Mallya's spirits operations.
Diageo, the UK-based spirits company, has initiated consultations with potential advisers to evaluate various options, including the possible stake sale of a portion or the entirety of the club, according to a Bloomberg report. Through its Indian subsidiary, United Spirits Ltd., Diageo could value the franchise at approximately $2 billion, according to these individuals quoted in the report.
The sources indicated that the final decision remains pending and the company might opt to retain ownership.
On Tuesday morning, United Spirits' shares rose by up to 3.3% in Mumbai trading, reaching a five-month peak following reports of the potential transaction.
These developments coincide with the Indian health ministry's efforts to prohibit the promotion of tobacco and alcohol brands in the IPL, alongside restricting sports personalities from indirect endorsement of other unhealthy products, the report said.
In India, direct advertising of tobacco and alcohol products is forbidden, although companies like Diageo have marketed alternative products such as soda using prominent cricket players.
The increasing value of IPL teams has transformed them into highly desirable sports investments. A potential sale could establish new pricing standards for future transactions in this rapidly expanding sports league.
The IPL has developed into a significant entertainment and advertising platform, comparable to the National Football League and English Premier League in commercial value. Its condensed, three-hour matches attract vast audiences across India and internationally.
Diageo faces challenges in its primary market, the US, where tariffs and reduced consumer spending affect premium spirits sales. A potential sale could provide capital whilst the company focuses on core operations and evaluates its global asset portfolio, the report said.
Stay informed with the latest business news, updates on bank holidays and public holidays.
AI Masterclass for Students. Upskill Young Ones Today!– Join Now
The TOI Business Desk is a vigilant and dedicated team of journal...
Read MoreThe TOI Business Desk is a vigilant and dedicated team of journalists committed to delivering the latest and most relevant business news from around the world to readers of The Times of India. The primary focus of the TOI Business Desk is to keep a watchful eye on the global business landscape, covering a wide spectrum of industries, markets, economic trends, in-depth analysis, exclusive reports and breaking stories that impact businesses and economies. With a mission to provide valuable insights and updates, the desk ensures that TOI readers are well-informed about the ever-changing and dynamic world of commerce and can navigate the complexities of the business world.
Read Less
Start a Conversation
Post comment