British Spirits Giant Diageo PLC is reportedly investigating the possibility of selling all shares in IPL Franchise Royal Challengers Bengaluru (RCB).
Earlier this month, the Bengaluru-based outfit won the Maiden IPL title. The Rajat Patidar-led side ran the Punjab Kings six times in the thrilling final at Narendra Modi Stadium. According to Bloomberg, days after RCB won the Maiden IPL trophy, Diageo PLC is about to say goodbye to the franchise. The UK company owns the team through its Indian subsidiary United Spirits Ltd.
The company has already begun discussions with its advisors. The report said the franchise could be valued at up to $2 billion. The UK business moves come to curb indirect advertising for alcohol as it faces regulatory pressure from the Federal Ministry of Health during major sporting events like the IPL.
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The company has historically leveraged the extensions of soda and non-alcoholic brands to maintain visibility under existing restrictions. However, under stricter advertising norms, even that strategy could be banned.
“The Indian Premier League (IPL), India’s most viewed sporting event, will send inconsistent messages about health and fitness to the public if they allow for direct or indirect promotions of tobacco and alcohol,” the ministry said in a statement earlier this year.
The appeal of the huge market of RCB:
Diageo wants to sell RCB stocks, but the franchise is one of the most popular teams in the league. The recent victory only increases the team’s constant popularity. Virat Kohli’s presence in the team brings a huge market appeal, especially across digital platforms.
The franchise is one of eight original teams founded by BCCI before the IPL began in 2008. The team was originally owned by liquor Vijay Mariya. Diageo then took over the team after taking over Mary’s plagued spirits empire.
The report added that the UK company is trying to sell RCBs due to the value of the franchise rising prices. Things are currently not going well for the company as premium liquor sales in the largest market, the US. As a result, they aim to sell IPL franchises to free up funds and concentrate on their main operations.
