RedBird Capital takes 15% stake in Rajasthan Royals

By on June 24, 2021 0

US-based private investment firm RedBird Capital Partners, which owns a stake in Liverpool and Boston Red Sox, has acquired a 15% stake in Rajasthan Royals for an undisclosed amount.

This is the first formal investment by a company with a global portfolio of sports investments in the local cricket league.

Experts hailed the move as validation of IPL’s brand proposition and believe it will likely bring global sports management expertise to the cricket franchise.

Santosh N, Managing Partner at Duff and Phelps Advisory and author of the 2019 IPL Brand Valuation Report, said: “The investment from a private equity firm like Redbird, known to have recouped high quality sports assets. performance in the United States and in The IPL team only underscores the potential of IPL in specific cricket leagues and sports and sports in general from a business perspective.

Brand promotion

Although Santosh has seen a negative impact on IPL’s ratings over the past year, he believes it is a temporary effect of the pandemic and said this investment shows the true potential of IPL.

Ajimon Francis, Managing Director of brand valuation consultancy, Brand Finance, said: “One of the main levers of brand valuation is the ability of a sports team to generate more revenue streams such as than merchandising. The IPL teams have not particularly innovated here. Francis believes the global sports management expertise brought in by seasoned sports investors such as RedBird could help Rajasthan Royals with this revenue stream.

Global investment

According to the press release, RedBird will provide strategic investments and expert advice to Rajasthan Royals for long term growth, success on the ground and business goals.

Whether this investment means global interest and investment in Indian sports remains to be seen. Cricket, however, is likely to be the biggest recipient of foreign investment. . Over time, in the medium to long term, we might see investments in other sports like football and hockey, ”said Anuj Kapoor, professor of marketing at IIM Ahmedabad. Overall, however, Francis believes this investment will create a buzz among sports investors in Europe, the United States and West Asia.

Among the IPL teams as well, Rajasthan Royals has always been more active in finding new investments unlike other franchisees, with most sales of equity investments being secondary transactions, according to Santosh.

Francis believes that the next teams that could potentially compete for such investments are likely to be teams that own more democratic stocks, such as Delhi Capitals, Kings XIPunjab, Royal Challengers Bangalore, where multi-party ownership makes it easier to move shares.

However, Santosh said, “Some of the teams are full owners of large companies and anytime these business owners decide to release value, we might see more transactions like this.”

RedBird also recently took a minority stake in Fenway Sports Group, which owns the English football team Liverpool and the Red Sox baseball, XFL, and they are also the majority owner of the French football team Toulouse FC.

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