RedBird Capital is once again flexing its muscles in the sports world. According to Yahoo Sports, the venture firm has bought a 15% stake in the Rajasthan Royals, a team in the India Premier League of Twenty20 Cricket. Given that the team has been valued at $250 million, makes this purchase around $37.5 million.
The deal gives the part of a team that is in a very competitive league, both on the field and off. It is said that the IPL is the only professional league, other than the NFL, where each club has been profitable. The significant part of this purchase, is that the league is coming up on a new media rights deal. In comes Kevin LaForce.
“The IPL is a dynamic league with a global audience and forward-thinking mindset regarding fan and player engagement. The Royals have contributed to this progressive approach, and we look forward to further supporting its on-field sporting performance, business operations and contributions to its community.”
Gerry Cardinale
Currently, Hotstar – a subsidiary of Disney – owns the media rights. Hotstar is an Indian streaming service who recently joined Disney+, increasing the service’s subscription in India from 1 million, to 25 million.
The rest of the ownership has also slimmed down. RedBird buys out a few of the small minority owner, while the majority owner, Manaj Badale, increased his stake from 51% to 65%, leaving one other group with money on the team.
The IPL also shares its media revenue, in which the Royals received $30 million in 2020. The entire deal currently sits at $2.55 billion with Hotstar, and no doubt will increase once renewed. RedBird’s addition seems like an analytical piece to the puzzle. With their background in such a wide array of sports businesses – hospitality, licensing, and now media rights – with the addition of LaForce, this could be a way that the group shows both the XFL, and the CFL exactly what it can do.
If they’re capable of increasing revenue in a league that has already shown profitability, imagine what it could do with a league that struggles with creating revenue. It’s not that easy to continue to make money for already profitable businesses.
“[This] is a testament to the global standing of the IPL and India as an attractive investment destination. Gerry Cardinale and his team at RedBird are leaders in sports business, and we look forward to all that can be achieved through this truly strategic partnership.”
Manaj Badal Royals Majority Owner
With ownership in the XFL, Fenway Sports, and the European soccer team Toulouse FC, RedBird now joins another global group in hopes of increasing its footprint, experience, and obviously their portfolio.
