Ahmedabad: Monday’s announcements about the two new IPL franchises could also be a clue to the direction of India. And, in a broader sense, World Cricket is set to arrive in the next decade.
Formula 1, soccer, rugby, and now cricket. Private equity firm CVC Capital Partners, a major player in international sport, was announced on Monday as the owner of the new Indian Premier League (IPL) franchise in Ahmedabad with a surcharge of Rs. 5.625 billion, an amount they are paying to become BCCI. the next 10 years.
It may seem like a staggering number, but sports economists believe this is ‘not just some random punt’ by CVC, who have a reputation of ruthlessly pursuing profit in their other sporting ventures, especially Formula One. CVC’s investment, they added, is evidence that they are ‘attracted by the potential of the Indian market’, an ‘affirmation of the IPL’s commercial trajectory’, and a prelude to them seeking to establish a first-mover advantage in US cricket’.
At the same time, Monday’s cricket board announcements regarding the two new IPL franchises could also point in the direction of India, and in a broader sense, World Cricket is poised to hit the next decade.
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An industry observer said:
“Sooner rather than later, we could see an expanded IPL, which could last up to four-to-six months and thus impact 50-over cricket. There’s an inevitability about it,”
Simon Chadwick, Director of the Center for the Eurasian Sports Industry at the Emlyon Business School in Lyon, noted that CVC’s investment comes at a time when ‘other global sports investors – such as Silver Lake and Mubadala – are already investing into Indian sport and the Indian digital economy.’
Apart from the obvious and lucrative commercial reasons. CVC’s other motivation to invest in Indian cricket. Chadwick added, would be to gain a foothold in US cricket as well. “It is important as well to note that cricket is showing signs. That it is gaining traction in the United States,” Chadwick said. “CVC’s investment into Indian cricket may serve as a prelude to them. Seeking to establish a first-mover advantage in US cricket.”
Show me the money
By 2030, CVC “could be looking to exit” from the IPL. Added sports lawyer Nandan Kamath, as opposed to the owner of the new Lucknow franchise, RPSG, who added long-term. This implies high growth from the sale of media rights. And sponsorship of IPL in the next cycles, some of which will be shared with the franchises. It is speculated that IPL’s media rights auction could raise as much as $ 5 billion for the cricket board. Over the next five-year cycle from 2023 to 2027.
The Financial Times reported that there was a similar caution recently. In Germany and Italy after major soccer leagues in both countries rejected a CVC investment. In August, sports investors bought a 10 percent stake in the Spanish league for just under $ 3 billion. The move has been rejected by four clubs. Including Real Madrid and Barcelona, who have decided not to do so, according to The New York Times. CVC has also invested a total of approximately $ 800 million in professional rugby.
Chadwick, however, believed CVC’s entry into the Indian sporting market could propel a “commercially mature” Ahmedabad IPL into the “commercial stratosphere”.
“The IPL was a response to our time-impoverished, instant-hit consumption culture. If anything, its format and staging are even more relevant now than it was when first introduced. Its high-octane pace and celebrity associations are helping to render other cricket formats obsolete, especially the 50-over game,” Chadwick said. “The IPL is already commercially mature. But with digital developments now give it new impetus. The arrival of CVC suggests that it is about to enter the commercial stratosphere.”
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