A $30 billion Saudi investment would skyrocket the value of IPL cricket teams

Cricket in the Indian Premier League has proven to be a wise investment. The average franchise value was estimated by Forbes to be $67 million in 2009, one year after the franchise-owned cricket league began operations. Expectations surrounding the next media contract—a $6 billion deal was signed a few months after our valuations were made public—and the inflow of private equity money from companies like RedBird Capital and CVC Capital into the league contributed to the average IPL team’s rise to $1.04 billion by 2022.

Despite the emergence of multiple Twenty20 leagues subsequent to the IPL’s debut, the Indian Premier League continues to enjoy immense global appeal.
Massive viewership figures are attracted to the sport; in June, Reuters reported that, at a peak concurrency of 32.1 million, over 120 million unique viewers watched the Chennai Super Kings defeat the Gujarat Titans in a thrilling final to win an unprecedented fifth IPL title. Twenty20 cricket, or T20 for short, is a shortened version of the game that was introduced in 2003 and changed the rules to emphasize hitting and scoring. The value of IPL teams may increase even more in 2028 as cricket makes a comeback to the Olympics.

Bloomberg said this morning that “Advisers to Saudi Crown Prince Mohammed bin Salman have discussed with Indian government officials transferring the Indian Premier League into a holding company valued at at a maximum of $30 billion. An IPL team owner has confirmed this interest to Forbes. An IPL team investor who was contacted by Forbes believes that Saudi Arabia would not make a significant investment until after the country’s April national elections.

Saudi Arabia has recently made a significant push into sports, potentially investing in the PGA Tour, through its $700 billion Public Investment Fund (PIF). The PIF has invested in Formula 1, the WWE, European soccer, and the newly formed African Football League. In addition, Saudi Arabia is scheduled to host the 2027 AFC Asian Cup, the Spanish, Italian, and Turkish Cup finals, as well as the 2034 FIFA World Cup.

Saudi Arabia currently has 312 sponsorship deals across 21 sports, as well as multi-sport events, according to a study published by Play the Game, which is run by the Danish Institute for Sport Studies, which is funded by the nation’s government, as reported by BBC Sport. According to the research, soccer accounts for 83 of the 312 deals, making it the most popular sport. The next most popular sports are motorsports (34), golf (33), and other sports.

It is true that the Board of Control for Cricket in India (BCCI), which oversees the IPL, will receive the Saudi investment. However, marketing, sponsorships, and stadium investments would help the IPL teams. The IPL’s founder stated last year that in order for the BCCI to make significantly more money, it should tear down its outdated stadiums and construct brand-new ones, just like American sports do.

According to a private equity investor in the IPL who spoke with Forbes, the Saudi investment may result in an extension of the league’s current 14-match schedule for teams that plays between March and May.

The Indian Premier League expanded to ten teams in 2021 after selling two expansion teams. CVC Capital paid approximately $750 million for the Gujarat Titans, while Sanjiv Goenka paid approximately $950 million for the Lucknow Super Giants. (The expansion fees will be paid to the other eight teams in equal portions over a ten-year period.)

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