Decades ago, sports teams rarely changed hands. They were like family heirlooms, which were passed down. Today, that is changing. It’s become a common occurrence now that either a Private Equity firm, or a Corporate, or a Celebrity is buying a sports team, and many times at valuations that are unheard of.
Have a look at this data below!
Source: S&P Global Market Intelligence, Deloitte Sports Investment Outlook
Let’s look at the deals happening in the Indian Premier League.
Rajasthan Royals was just sold to the Somani consortium for $1.63 billion (₹15,000+ crore). Blackstone, a firm managing over $1 trillion globally, spent $1.78 billion (₹16,500+ crore) to acquire a controlling stake in RCB (along with other buyers like Aditya Birla Group, TOI and Blackstone). And In February 2025, Torrent Group bought a majority of CVC Capital Partners’ stake in Gujarat Titans.
While these were the deals that materialised, many others like the Adanis, the Zerodha Kamath Brothers, Glazer family (owners of Manchester United), The promoter family of ArcelorMittal, etc were reportedly in the fray to buy these franchises.
This trend of investor interest isn’t limited to the IPL. I’ve watched the same pattern unfold in the English Premier League, Spanish La Liga, the NBA and many such sporting leagues. The question worth asking is why.
From Family Heirlooms to Media Empires
The shift began when institutional capital entered the picture, because institutional capital changes how things are run.
Once an institution enters, the same franchise stops being just a sports team. It becomes a media and entertainment company that tries to squeeze every Rupee or Dollar from its franchises. The athletes then are no longer just sports persons but full-fledged content creators, on the field and off it.
Broadcasting Rights – The Cash Cow
When you watch an IPL match, you’re watching a three and a half hour primetime slot reaching 50 Crore plus loyal viewers. With the arrival of OTT and generally falling attention span, traditional TV and Cinema have had to adapt themselves to remain relevant. But that is not the case with sports.
Sports are enjoyed the best when they are live. The fun of watching the highlights or the replay goes away as soon as you know the scores. You watch it live, or you miss the moment. Hence, this becomes one of the best avenues for advertisers and so broadcasting contracts for sports go for an astronomical sum
IPL broadcasting is the best example.
Source: Outlook
For the 2023–27 broadcast cycle, Disney and Viacom18 paid ₹48,390 crore collectively. Half goes to the BCCI; the rest is split almost equally across all ten franchises, win or lose.
Other leagues work similarly with minor quirks. The Premier League uses a 50:25:25 model — 50% split equally, 25% by league position, 25% based on televised matches.
These broadcasting deals are multi-year fixed contracts, negotiated years in advance. For the IPL, the BCCI controls how many franchises exist, and that number goes up very slowly. Winning is almost irrelevant to economics, and that is what makes the business even more valuable, steady cash flows despite the results.
The Shiny Thing for Owners
There’s also a vanity dimension, which makes investing in sports teams appealing. Because it changes how you’re perceived; by fans, by media, and by the public. “The owners of RCB” has a different ring to it than “a private equity firm.”
Another example is Saudi Arabia’s Public Investment Fund. They poured an estimated $6+ billion into Newcastle United, LIV Golf, the Saudi Pro League, Formula 1, and boxing since 2021. They say it’s about diversifying from oil and building sports tourism.
Celebrity owners understand this instinctively. SRK became the poster boy for KKR, and eventually for Kolkata itself. Vijay Mallya made RCB genuinely cool before anything else, he applied the same logic into Formula 1, brining India on the map of global motorsports.
The optics of sports ownership are not replicable by any other asset class.
The ROI Everyone is Aiming For
Ryan Reynolds and Rob McElhenney, two Hollywood celebrities bought a Welsh fifth-tier football club, Wrexham FC, in 2021 for £2 million (~₹25 crore). A documentary, a global social media following, and three consecutive promotions later, the club is valued at £350 million. Roughly 150x in three years.
Another good example is CVC Capital Partners who earned roughly a 75% return in four years after selling a 67% majority stake in the Gujarat Titans to Torrent Group.
On the other hand, when the Rajasthan Royals were founded, Lachlan Murdoch (Fox’s Executive Chairman and CEO, and News Corp’s chair) invested $2.3 million in 2008. But now he stands to pocket about $210 million from the sale, a 92.4x return.
Source: BCCI, Other Media Sources
Here’s What I think…
Institutional investors, corporates, and celebrity owners are not in this just for the game. They’re in it for stable, predictable cash flows from broadcasting and sponsorships, and the possibility of double-digit capital gains.
Sports has become the next alternative asset class. Like how art used to be back in the day. Except this one has millions of people watching every weekend, and none of them need any convincing to show up.
What makes it genuinely different from every other asset class: no war, no pandemic, no financial crisis has permanently stopped sports being played. The 2008 crash didn’t affect sports and neither did Covid in the longer term. And with most industries bracing for disruption from AI, sport stands out as one of the few that remains largely immune.
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Till the next time,
Vijay
CEO – InCred Money
P.S. I share my thoughts on Investing and the Economy regularly. You can follow me here.
