Dollar Playbook: Decoding How Franchises Like RCB & RR are Valued – Outlook Business

The most valuable Royal Challengers Bengaluru (RCB) has recently been acquired by a consortium of conglomerates in a deal that values the franchise at around $1.78 billion (approximately ₹16,706 crore).

Around the same time, Rajasthan Royals (RR) saw a change in ownership, with existing shareholder Kal Somani taking full control of the team at a valuation of $1.63 billion (approximately ₹16,290 crore).

According to a report by Houlihan Lokey in its 2025 IPL Valuation Study, the overall business value of the Indian Premier League has risen to $18.5 billion, marking a 12.9% increase (₹156,568 crore, up 16.1% in INR terms). This valuation reflects the fair market value of the league’s total cash flows as a unified entity.

An IPL franchise differs significantly from a traditional business model. Instead of relying on defined products or services, franchises derive value from a combination of revenue streams, brand equity, and strategic positioning, all of which are factored into their valuation.

RCB & RR Acquisition

In the case of RCB, the franchise, fresh off its IPL championship win, was acquired by a consortium comprising the Aditya Birla Group, The Times of India Group, Bolt Ventures, and Blackstone through its perpetual private equity strategy.

The consortium signed a definitive agreement with United Spirits Limited, a subsidiary of Diageo plc, to acquire a 100% stake in the franchise, covering both its men’s and women’s teams in the IPL and the Women’s Premier League.

Advisors to the buyers included A&W Capital, Moelis, and Khaitan & Co., while Citi India and AZB Partners acted as advisors to United Spirits Limited.

Under the new ownership structure, Aryaman Vikram Birla will serve as Chairman, while Satyan Gajwani will take on the role of Vice Chairman. The consortium also includes David Blitzer and Viral Patel. The deal remains subject to approvals from the Board of Control for Cricket in India (BCCI), the IPL Governing Council, and other regulatory authorities.

In a parallel transaction, Kal Somani has acquired a 100% stake in Rajasthan Royals through a consortium that includes Walmart. The Jaipur-based franchise, one of the original eight IPL teams, will see Somani take over leadership after the 2026 season from Manoj Badale of Emerging Media. The Times Group, which was also in contention, finished as the runner-up bidder.

IPL Franchise Valuation Formula

IPL franchise valuation is distinct from that of traditional sports teams, as it combines elements of media, entertainment and consumer branding. At its core, valuation is driven by a combination of discounted future cash flows, brand value, and a strategic premium.

The discounted cash flow (DCF) method forms the foundation, where analysts project revenues over a 5–10 year period, deduct costs, and discount future earnings to present value using a risk-adjusted rate. A terminal value is also included to account for long-term growth potential.

Cash flows for IPL franchises are largely driven by the central revenue pool distributed by the BCCI, which includes media rights and league sponsorship deals. Following the 2023–27 media rights cycle, broadcast revenues have surged, making central distributions the most stable income stream, accounting for nearly 70–75% of annual revenue for most teams. Additional revenue streams include sponsorships, ticket sales, merchandising, licensing, and digital fan engagement.

Brand value acts as a significant multiplier in franchise valuation and is often calculated using the relief-from-royalty method. Teams like Royal Challengers Bengaluru benefit from strong fan engagement and star power, particularly associated with players such as Virat Kohli, which enhances their valuation beyond financial metrics.

This premium reflects its global fan base, consistent sponsorship demand, strong brand equity, and long-term visibility of media revenues. Notably, despite limited on-field success historically, RCB commands one of the highest valuations in the league, underscoring the importance of brand strength.

Another critical factor driving valuations is the scarcity premium. Unlike many global sports leagues, the number of IPL franchises is limited, creating intense competition among investors. As a result, teams are increasingly viewed not just as sports entities but as long-term media assets, gateways to India’s expanding digital audience, and platforms for global sports and entertainment expansion.