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The ownership of the Royal Challengers Bengaluru (RCB) franchise is officially under review for a potential sale. As per a report by Cricbuzz, Diageo, the global beverage giant that owns both the men's IPL team and the women's WPL team, confirmed the initiation of this process in a disclosure to the Bombay Stock Exchange (BSE) on Wednesday, November 5.
RCB ownership up for grabs as sale process begins
The company termed the move a "Strategic Review of the Investment in Royal Challengers Sports Pvt Ltd (RCSPL)," which is a wholly owned subsidiary of its Indian unit, United Spirits Ltd.
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The formal communication outlines that RCSPL's sole business is the ownership and operation of the RCB franchise teams participating in both the men's Indian Premier League (IPL) and the Women's Premier League (WPL) tournaments. This strategic decision aligns with the parent company’s goal of focusing on its core alcoholic beverage business, classifying the cricket franchises as non-core assets. Importantly, the company's disclosure sets a clear timeline, stating that the review process and potential sale are expected to conclude by March 31, 2026.
The significance of RCB Sale
The potential sale of the Virat Kohli-starrer RCB franchise is expected to be a landmark event for the Indian Premier League (IPL). The league has rapidly grown into a colossal entertainment and advertising platform, now rivaling major global sports entities like the National Football League (NFL) and the English Premier League (EPL). Consequently, stakes in IPL teams are viewed as highly coveted "trophy assets," and a transaction involving a popular franchise like RCB will likely establish a new benchmark for team valuations within the league.
The current owner, Diageo, is initiating this move to strategically refocus its business. Praveen Someshwar, CEO of United Spirits (Diageo’s Indian subsidiary), noted in a filing that while Royal Challengers Sports has been a "valuable and strategic asset," it is ultimately non-core to the company’s primary alcoholic beverage (alcobev) business. This decision aligns with Diageo’s global strategy to streamline its portfolio and concentrate on creating long-term value in its core segment. Initial reports, including one by Bloomberg News in June, suggested that Diageo was seeking a valuation for the RCB stake as high as $2 billion. This interest has already drawn attention, with prominent figures like Adar Poonawalla, CEO of the Serum Institute of India, publicly acknowledging the team as a "great team" at the right valuation.
The timing of United Spirits' strategic review also comes amid increasing regulatory scrutiny in India. The Ministry of Health has been intensifying its efforts to curb the promotion of alcohol and tobacco brands through sports, which impacts surrogate advertising opportunities for a company like Diageo. Historically, the RCB franchise has been through a change in ownership before. It was one of the founding teams of the IPL, originally acquired by former liquor baron Vijay Mallya. Diageo took control of the team after acquiring Mallya's United Spirits business following the collapse of his Kingfisher Airlines in 2012.
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