MUMBAI: This is interesting. A pointer, if any were needed, to the challenges international conglomerates must perforce confront in this market. More so when considering investing in cricket – not just India’s national game but also one that in this country is intrinsically intertwined with political power plays.
To cut to chase, on Tuesday, a day after private equity and investment advisory firm CVC Capital Partners was declared the owner of the Ahmedabad franchise of the Indian Premier League with a winning bid of Rs 5,625 cr, Chinese whispers started circulating.
First off the blocks was former IPL head honcho Lalit Modi who tweeted: “I guess betting companies can buy an IPL team. must be a new rule. apparently, one qualified bidder also owns a big betting company. what next? does BCCI not do their homework? what can Anti-corruption do in such a case? #cricket.”
Modi has been known to play fast and loose with his comments in the past as well, but calling CVC Capital, which has 107 portfolio companies under its umbrella and approximately $111 billion in secured commitments, a betting company is seriously stretching the envelope.
It is true though that CVC does have a betting operator in its portfolio, which is Tipico, Germany’s leading sports betting provider that has built up more than 50% market share in the German market.
CVC’s most high profile investment in the betting business however was in SkyBet. It had bought an 80% stake in the business from its then parent – U.K. satellite broadcaster Sky Plc – in 2015. Subsequently, in 2018 it cashed out, selling Sky Betting & Gaming at a massive profit to The Stars Group for $4.7 billion.
The BCCI is yet to make a public comment on the matter but a senior official told Outlook on Wednesday: “CVC Capital is a big private equity company and they are free to pick up stakes in a betting company because betting is legal abroad. Irelia Company Pte Ltd (through which CVC Capital bid) could be managing many funds but as long as they don’t have any managerial role or control, how does it matter? Betting is a matter of perception. It should not be confused with match-fixing.”
Seen from this perch, this “manufactured controversy” will ultimately prove little more than a storm in a tea cup. But IF CVC’s bid were to be deemed illegal after the fact, erstwhile ‘favourites’ Adani Group, which had bid Rs 5,100 cr for the Ahmedabad franchise, would be the immediate beneficiary. For the record, RPSG Group had the highest bid among all nine “candidates”, taking the Lucknow franchise by bidding a whopping Rs 7,090 cr.
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