Jos Buttler, England’s master blaster in cricket’s short formats, proved a star turn when he blitzed 863 runs for Rajasthan Royals in the recently-concluded 2022 Indian Premier League (IPL). But he couldn’t quite replicate his season-long pyrotechnics — the second highest accumulated in IPL history — in the final for the fancied franchise. Instead, accolades went to debut outfit Gujarat Titans, with their own British-backed ties. It followed a final played out in front of 104,859 at their Ahmedabad home.
Buttler’s runs and the world-record cricket crowd at the Narendra Modi Stadium were still small fry compared to the eye-watering sum of around $750m (£599m) paid by CVC Capital Partners, Europe's biggest private equity (PE) firm, to become franchise owners of Gujarat Titans.
In Dubai last October, CVC were one of around 10 interested parties, which included big Indian corporates, bidding for two new IPL franchises in Lucknow and Ahmedabad, with the Twenty20 competition expanding from eight to its original 10 teams in its 15th edition.
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Manchester United co-chairman Avram Glazer was also in Dubai, a day after his club’s 5-0 hammering to Liverpool in the Premier League. But it was to prove a dispiriting 48 hours after the United owners bid less than £500m, outmuscled by RPSG Ventures, an industrial conglomerate bidding for Lucknow, and CVC for a combined total sum of almost £1.2bn.
The two deals were the latest by wealthy benefactors and private equity players — CVC has assets worth over £100bn according to the company website — seeking to make inroads from the IPL’s rise, since the event's inception in 2008, its large audience and multi-billion pound media rights deals.
The high valuations, according to Board of Control for Cricket in India (BCCI) president Sourav Ganguly, were “heartening”. The former Indian captain noted that the bidding interest from outside of India heightened the format’s global appeal. “It reiterates the cricketing and financial strength of our cricket ecosystem,” he said.
The CVC deal was led by its stalwart co-founders Steve Koltes, Donald Mackenzie and Rolly van Rappard. Further, the financial adviser to CVC’s bid was fronted by investment advisory firm A&W Capital, set up by the former English cricketer Matthew Wheeler in 2016. Wheeler had travelled extensively to India, from launch until the pandemic, and was now fully in tune with the IPL network and its movers and shakers. Thus, buyout giant CVC became the first western private equity group to take sole ownership of an IPL team.
CVC’s mega bid for the Ahmedabad franchise was in stark contrast to a company seen as being a “secretive” PE firm by the Financial Times. The Sunday Times recently noted that Mackenzie and his team “have always been reluctant to be in the spotlight”, while CVC didn’t respond to Yahoo Finance’s request on its involvement in the IPL.
“CVC have a great track record of identifying opportunities and creating value in many of the sectors more traditionally targeted by private equity," a source told Yahoo Finance. "The team are super smart and are now developing a strong reputation across the sporting arena."
Their arm’s length involvement left the Gujarat Titans team as the sole focus in their title celebrations. TV cameras usually pan to the array of famous IPL owners in the final showdown — Bollywood stars and Indian business tycoons. Not this time. Gujarat-born captain Hardik Pandya was the hero with the IPL trophy — the first lifted by an Indian — and the subsequent victory parade in Ahmedabad, while Nick Clarry, CVC’s managing partner who has led the company’s drive in sports, was reportedly at the final.
This, though, wasn’t the first time CVC had eyes on landing an IPL franchise, with past buyout discussions for Rajasthan Royals and then Delhi Daredevils never materialising. “They were first interested in 2017-18,” Wheeler recently told Forbes India on CVC’s IPL links. “These things do take a long time.”
This time, however, they were adamant to cross the line when the BCCI opened tenders. “They've [CVC] been phenomenal the way they've gone about with their sports businesses ... the league has well and truly arrived on a global stage,” BCCI treasurer Arun Dhumal told the Times of India.
Many IPL observers had been surprised when CVC became Ahmedabad franchise owners. However, as one sports industry expert told Mihir Vasavda, an assistant editor at the Indian Express, CVC’s investment wasn’t seen as a “'random punt”.
“Their entry can be seen from two points of view: the first is that they seem to be conscious of India's growing sports — especially cricket — industry as well as digital economy,” Vasavda told Yahoo Finance.
“IPL has been at the centre of both — it's driving India's cricket consumption and backed increasingly by digital start-ups in terms of sponsorship deals. Not to forget the growing middle class, which is willing to spend on IPL while more than 100,000 people turned up to watch Gujarat play the final at their home ground.
“Given that CVC have a reputation for pursuing profits, these factors become important.”
The higher prices now prevalent in the IPL is perhaps down to the US sports model, whereby teams are free from relegation and guaranteed a place every year, coupled with the vast media rights deals.
“For CVC, this seems like a perfect platform to get a foothold in US cricket as well,” adds Vasavda. “The US has a Minor League right now, they are launching a Major League next year, will host the T20 World Championship in 2024 and there's a genuine push to get cricket included in the 2028 LA Olympics."
CVC, which deals with venture capital, credit asset management and private equity, was founded over 40 years ago, its British roots laid by banking firm Citicorp, which wanted to found an investment firm.
Over the decades, CVC has become a major blue chip investment player in the European and Asian markets, as well as investing in a wealth of companies, including RAC, Britain’s leading automobile rescue company, communications company Teneo and Unilever’s (ULVR.L) tea business.
CVC has now been involved in the sporting sphere for nearly 25 years. In 1998, it bought Moto GP brand Dorna for around £45m, selling eight years later for a profit of around £486m. They also invested in Formula 1, selling their majority ownership stake to Liberty Media in 2017 and making a huge return on its initial investment of £1.6bn.
In 2018, Spanish soccer’s La Liga sold around 10% of the game’s rights to CVC in a £1.7bn deal and TV revenue share over 50 years. The deal hasn’t come without controversy, with four clubs — including Barcelona and Real Madrid — opting out.
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CVC has since acquired stakes in rugby's Six Nations, the buyout group owning a 14% stake at an investment cost of up to £365m, and major shares in both the Gallagher Premiership and United Rugby Championship. CVC’s total investment in professional rugby today stands at more than £700m. Meanwhile, it has also ventured into "minority sports", the private equity giant having invested a reported £240m last year in driving global growth in volleyball.
Koltes established CVC in 1993 alongside Mackenzie, a Scot, and Van Rappard, while change is afoot ahead of their second year in the IPL. Koltes is expected to step down later this year, with British-born Rob Lucas, a mountaineer who has climbed Everest, lined up to become chief executive, having joined CVC in 1996.
CVC’s shrewd investments have been backed up by its professional, hands-off approach to its first year in the IPL. Led by Englishman Vikram Solanki as director of cricket operations, Gujarat Titans were given a free hand into its cricket operations, while its COO Arvinder Singh was given the green light to make “full-fledged decisions” in marketing, brand building and commercials.
Balu Nayar, IMG’s former managing director and one of the IPL’s key architects, told Indian publication Business Today that Gujarat Titan’s future approach will now need to be around "an intelligent sports management cocktail" to help raise the team's value.
“This is probably one of the most professionally run teams, primarily driven by its ownership by CVC,” he added.
In hiring two global media agencies, CVC’s investors will also have taken into account the IPL's upcoming media rights auction, which begins on 12 June. Conglomerates such as Google (GOOG), Facebook (FB), Disney Star (DIS) and Amazon (AMZN) have reportedly expressed interest in the broadcast rights, with bids worth over £4bn expected for the five-year rights between 2023 and 2027.
Meanwhile, observers in India feel that CVC will aim to maximise their profits from IPL in the next eight to 12 years and look for an exit strategy — unlike other franchise owners in cricket’s marquee tournament, which are mostly family businesses in for the long haul.
So does CVC's investment feel like a shot in the arm for the IPL? Vasavda, of the Indian Express, concurs. “IPL organisers will point at the global appeal of the tournament and this could open doors for similar investors in the future," he believes.
"The addition of new teams means more matches and a bigger calendar. This, then, can lead to more income from media rights and sponsorship.”
The CVC bandwagon seemingly rolls on.