New IPL owners whet the appetite for Indian teams

NEW DELHI: When BCCI invited bids for two new teams for IPL T20 league, not many expected a windfall of ₹12,715 crore; but for the two new owners—RP-Sanjiv Goenka group and Irelia Company Pte Ltd (CVC Capital Partners)—it was about whetting the appetite to invest in sporting properties.

While for the RP-Sanjiv Goenka group, the owners of Lucknow franchise, it may be a case of an unfinished business with IPL, for the global private equity firm CVC Capital Partners bid for the Ahmedabad team it is about testing waters with cricket for the first time, having agreed to a $3 billion deal with Spain’s La Liga earlier this year.

Back in 2017, when the then Rising Pune Supergiant lost to Mumbai Indians by just 1 run in the final of IPL, there was an unfinished business for the owner of the franchise RPSG group, more so for the man behind the conglomerate Sanjiv Goenka. Allowed for just two seasons along with Gujarat Lions to fill in for two suspended teams—CSK and RR for involvement in illegal betting by their respective owners—Rising Pune Supergiant ending up as runners up in 2017 left the RP-Sanjiv Goenka group wanting for more, albeit having to wait for the IPL door to open again.

Circa 2021, when the opportunity came, the Kolkata-based conglomerate with $6 billion asset base having presence in a variety of sectors ranging from power and energy, carbon black manufacturing, retail, IT-enabled services, FMCG, media and entertainment to agriculture, didn’t blink to shell out $1 billion (₹7,090 crore), to grab the Lucknow franchise. While the amount dished out by the group may raise many eyebrows, specially at a time when businesses are still reeling under the impact of the coronavirus pandemic, for the RPSG group it is a case of now-or-never considering how deeply it is involved with sports and specially cricket.

Goenka, who has set a vision of the conglomerate to be a dynamic one driven by “sustainable growth, efficiency and innovation” would have surely done the calculations on the sustainability of the new Lucknow IPL franchise before putting in so much money into it.

On Monday, when asked if the ₹7,000 crore bid was economically viable, Goenka reasoned, “We do believe that the valuation of this will go up in the future. And from what we invest, to what it could be over a period of 10 years would be a multiple of a few times.” He was also happy to get Lucknow as the home base as RPSG group has business interests in Uttar Pradesh. In the last decade, just as the group steadily grew and expanded into renewable energy such as solar and wind, power distribution, IT-enabled services and other areas, its association with sports has also been growing.

In 2014, it had formed the then ATK Kolkata in association with one of Spain’s top football clubs Atlético de Madrid as one of the teams of the Indian Super League. They have been part of Indian Super League football from the first year as ATK and later merged with legacy club Mohun Bagan to play as ATKMohun Bagan.

In the same year that Rising Pune Supergiant lost the IPL final, the group had formed the RPSG Mavericks, one of the six city-based teams in India’s top league for table tennis, launched in 2017. The group had also co-created RPSG Indian Sports Honour along with Indian cricket captain Virat Kohli -- a multi-discipline annual sports awards to recognise Indian sportspersons - abled and differently-abled, competing in international tournaments.

Then in 2019, the group instituted the RPSG Indian Cricket Heroes, an annual internationally-held cricket awards event, to honour the achievements of Indian cricketers on the international and domestic sports circuit. The property is co-owned with Talent Management agency Cornerstone.

For Irelia Company Pte Ltd (CVC Capital Partners) which bid Rs 5,625 crore for the Ahmedabad franchise, beating Adani Sportsline, its investment in IPL is about taking forward the intent to have a larger play in successful sporting properties across the globe. This is the first time that a global PE firm has acquired a major sports team in the country.