Last Update on: October 26th, 2021 at 10:44 am
The private equity company, CVC Capital Partners, won the bid for the Ahmedabad franchise in the recently concluded closed bidding for the two new IPL 2022 teams. They submitted a bid of INR 5625 crores, an amount that will be paid to the BCCI over a period of ten years.
The new owners, CVC Capitals, ventured into cricket after already establishing their presence in other sports, viz. Formula One, Football, and Rugby. They have a 27% holding in Premiership Rugby, the first division of English clubs. CVC Capitals are also part of La Liga, a Spanish football league, where they have invested 2.7 billion euros in return for a 10% stake in the company. Their investment is a testimony to the fact that the commercial potential of IPL will keep growing over the years to come.
CVC has been established as an entity that chases profit in its sporting adventures. Their recent bid for the Ahmedabad franchise is a calculated move, according to sports economics experts. One of the reasons for their investment was elaborated by an industry observer:
How the #IPL bids went! pic.twitter.com/nLjQb6djsB
— Harsh Goenka (@hvgoenka) October 25, 2021
“Sooner rather than later, we could see an expanded IPL, which could last up to four-to-six months and thus impact 50-over cricket. There’s an inevitability about it.“
CVC’s investment in IPL 2022 bidding done based on India’s commercial potential in the near future
The director of the Centre for Eurasian Sport Industry at Lyon-based Emlyon Business School, Simon Chadwick, further revealed that CVC’s investment has two main reasons – one of them is to gain a foothold in the US Cricket, and the other is to jump in on India’s increasing commercial potential.
“It is important as well to note that cricket is showing signs that it is gaining traction in the United States. CVC’s investment into Indian cricket may serve as a prelude to them seeking to establish a first-mover advantage in US cricket.“
“India’s annual economic growth is heading towards 10 percent, almost 50 percent of its population can be labeled as being middle class, and there are more than two hundred billionaires in the country. Economically, the numbers appear to add up, especially when the country’s digital economy is forecast to be worth $800 billion by 2030. This is not just some random punt on CVC’s part,” Chadwick mentioned.
The involvement of celebrities in the IPL has given a certain image to the league that has helped it grow exponentially. At the time of the establishment of the IPL, there was not a lot of traction, but it has since grown immensely.
“The IPL was a response to our time-impoverished, instant-hit consumption culture. If anything, its format and staging are even more relevant now than it was when first introduced. Its high-octane pace and celebrity associations are helping to render other cricket formats obsolete, especially the 50-over game,” Chadwick added.
Also Read – The Amount Spent For New IPL Teams Shows Why Cricket Is The Second Most Popular Sport – Shane Warne