Most experts, pundits, and cricket fans feel that Serum Institute’s Adar Poonawalla’s potential bid to buy Royal Challengers Bengaluru, the franchise which won the Indian Premier League (IPL) in 2025, for an estimated $2 billion is because of its skipper Virat Kohli’s charisma, recent success, and the general hoopla. This is not entirely true. In fact, they constitute a sliver of the real reasons. It was the Board of Control for Cricket in India (BCCI), the apex cricket body, and wealthiest cricket association in the world, which was responsible for RCB’s financial fortunes, and its vaulting valuation, which probably jumped multiple times in a matter of few years. Experts feel that as late as 2022 or 2023, no one would have paid more than a few hundred million dollars for the team.
So, what changed? We can find several clues in BCCI’s balance sheets. Although the association approved the audited accounts for 2024-25 last month, the annual report is not available on its website. But, for our analysis, the 2023-24 figures will suffice. For it was in this year that the body’s annual income skyrocketed by almost 50 per cent to more than `9,700 crore. This figure is a bit understated, which is a peculiarity with the BCCI numbers. The reason is that the annual profit and loss accounts do not include the full incomes from IPL. Instead, they provide the yearly surpluses, which imply that they are the actual revenues from the league minus the expenses. This is because a huge portion of the actual inflows are shared with the franchisees (10 teams, up from eight earlier), and state cricket associations and subtracted from the total. Even the specific league-related expenses are excluded from the final surplus figures.
If we consider the IPL income in 2023-24, the figure, at `11,800 crore, pole vaulted by almost 80 per cent from the previous year. The IPL surplus stood at nearer to `6,850 crore, or lower by nearly `4,000 crore. Even the surplus was up by 70 per cent. The former was largely because of an unprecedented jump in revenues from media rights, which witnessed an unbelievable rise of more than 130 per cent within a year to almost `8,750 crore. Of the total annual income, nearly `4,670 crore was shared with the franchisees, which marked more than a 110 per cent increase over the previous year. It is another matter that the franchisees paid nearer to `2,200 crore as considerations for buying the teams in the first place.
Since a much-higher amount from the central rights, especially media rights, was shared with the franchisees in 2023-24, their fortunes turned around within a year. This was godsent for the ailing and smaller teams such as RCB, and Punjab. The high-flyers with celebrity quotient, and backings of savvy industrialists, such as Kolkata, Mumbai, and Chennai were invariably in the black from the beginning of the league, or within a few years. Even a smaller team like Rajasthan was in fine mettle due to lower costs. Newcomers like Lucknow and Gujarat made a mark quite fast. But the others struggled until 2023-24. In the case of RCB, its annual revenues during the year went up to `635 crore, up 160 per cent from the previous. This was driven largely by BCCI’s transfers of central rights, which went up by 180 per cent to `422 crore.
Let us put this context to understand how the central rights influenced the profitability, and shored up the bottom line. BCCI’s share was more than `100 crore than RCB’s operational expenses during the year, which included fees paid to the players and support staff, event management costs, and commissions on sponsorships. The central rights were more than double the combined earnings from sponsorships and ticket sales. In essence, if RCB had not sold a ticket, or got a single sponsor, it would have still made money merely from the money it got from the cricket board. No wonder, its profit before tax was almost `300 crore, with an after-tax figure of `222 crore. Not surprising that RCB paid a dividend of `125 crore, or `85,000 a share, for the first time to its parent in 2023-24.
In 2024-25, the central rights from the BCCI dropped to a tad below `330 crore, or a drop of more than 20 per cent. Yet, the figure was more than the year’s operational expenses of just below `290 crore. The combined income from sponsorships and ticket sales was just below `170 crore. The profit before tax: `188 crore. The profit after tax, after paying a tax of `48 crore, was `140 crore. The cash with RCB jumped from `28 crore in the previous year to `176 crore. Trade receivables, trade payables, and contract-related liabilities were high, together comprising over `300 crore. But the cash flows were robust, and sturdy, despite a lower profit compared to the previous year (2023-24). RCB’s financials were solid. It paid dividends (`120 crore) to the parent for the second time.
Just as an aside, the IPL-related financials of the BCCI needs to be compared to what it earns from other sources, especially domestic and global bilateral matches, and global tournaments. In 2023-24, the sponsorships from international tours and tournaments earned just under `280 crore. The income from the ICC World Test Championship was a meagre `11 crore, but a much-higher `70 crore from Asia Cup, `52 crore from England’s tour of India, `46 crore from ICC CWC 2023, and `44 crore from Australia’s tour of India (2023). The earnings from the ICC T20 World Cup (2022-23, not 2023-24) were paltry `19 crore. The Afghanistan tour of India in 2023-24 earned `31 crore, India’s tour to West Indies `38 crore, and India’s tour to South Africa `31 crore.
Now, for the main point that we wish to make. If the BCCI’s central rights were responsible for RCB’s higher valuations, as the profits made the debts disappear, and rendered the debt-equity ratio out of the equation (see Our Take above), a pertinent question arises. What did they do to the other franchisees, especially the already-rich and profitable ones like Mumbai, Chennai, and Kolkata. If experts contend that RCB is now more valuable at an estimated $2 billion, does not it imply that a potential buyer may end up overpaying for the franchise? Is it not better to go for the other profitable teams, which are possibly available at lower values? Of course, Mukesh Ambani, or his wife, Tina, who manages Mumbai Indians, is unlikely to sell. Chennai’s owner N Srinivasan too is a no-go, as he had tried every trick to latch on to the team. One is not sure about Kolkata either. That, obviously, leaves RCB, Gujarat, and Lucknow. Of the three, Diageo may be more than willing to sell.