Investing in IPL a proxy for India consumption story: RCB co-owner Aryaman Birla

MUMBAI: Royal Challengers Bengaluru co-owner Aryaman Birla sees the Indian Premier League (IPL) as more than cricket—it is a mirror of India’s consumption story.

“As the Indian middle class grows and the pay increases, it goes into advertising and broadcasting and it touches most number of people. It goes into revenue and we saw this as a consumption, media, entertainment, and sports story,” the Birla scion said at the Mint India Investment Summit in Mumbai.

Earlier this week, a consortium comprising the Aditya Birla Group, US sports investor David Blitzer, private equity giant Blackstone, and Satyan Gajwani of the Times Group family office acquired the reigning IPL champion from liquor giant United Spirits Ltd for $1.78 billion, or roughly ₹16,600 crore.

Birla said the group is more bullish on the next media cycle, beginning 2033, than the current one. “What we believe is really important is not this media cycle, the next one…and we're very bullish on that cycle more than the current cycle even,” he said.

IPL media rights have grown six-fold since the 2008 auction, from $0.9 billion to $5.4 billion in the 2023–27 cycle, according to a Media Partners Asia report. Despite this growth, the report estimates that rights holders may record cumulative losses of $1.8–2.0 billion over the current cycle.

At the summit, Birla described cricket and the IPL as a new investment class in India. “The fact that private equities are willing and so keen to have a shot at this asset just proves that this (is) investment class,” he said.

Central to strategy

The former professional cricketer said sees owning an IPL team is central to the group's consumption strategy. “We've been investing more deeply in the Indian consumption story and we have been looking at sports as an opportunity. Owning an IPL team was a core of the strategy,” he said.

The Aditya Birla Group has a broad footprint across consumer businesses, spanning telecom (Vodafone Idea), fashion and retail (Aditya Birla Fashion and Retail, including Pantaloons and Van Heusen), chemicals (Birla Carbon, Aditya Birla Chemicals), renewables (Aditya Birla Renewables), paints (Birla Opus), and real estate (Birla Estates).

The group has also invested in a slew of consumer companies through Aditya Birla Ventures, its venture capital arm founded in 2021 by Aryaman Birla. The portfolio includes Giva, Mokobara, Moofarm, and Firstclub.

Profitability and nation-wide appeal also drove the acquisition. “IPL franchise P&L is very profitable compared to other sports. It is culturally relevant. IPL and cricket are going to be relevant, and they are recession and AI proof,” Birla said.

RCB posted revenue of ₹634.7 crore in FY24 and net profit of ₹221.8 crore, reversing a loss from the previous year.

Birla earlier played for rival franchise Rajasthan Royals, which was acquired for $1.63 billion ( ₹15,286 crore) by a consortium led by Arizona-based tech entrepreneur Kal Somani, American businessman Rob Walton of the Walmart family, and the Hamp family, majority owners of NFL side Detroit Lions.

He noted the IPL’s rapid rise in value. “The BCCI and the government has been able to formalize this fantastic IP (intellectual property). It is the second-most valuable league on a per match basis after the NFL (National Football League), and it is only 18 years old,” he said, pointing to the league’s limited number of franchises—10 teams versus 32 in the NFL—as a factor in scarcity and value creation.