Ownership of RCB under review as Diageo pivots to core business
Diageo’s India subsidiary, United Spirits Limited (USL), has initiated a strategic review of its investment in Royal Challengers Sports Private Limited (RCSPL), the entity that owns both the men’s and women’s Royal Challengers Bengaluru teams. The move marks a potential turning point for one of the Indian Premier League’s (IPL) most prominent franchises, as the global beverage company realigns its business strategy to prioritize its core alcoholic beverages portfolio in India.
The review is being conducted through regulatory filings with the Securities and Exchange Board of India (SEBI) and the Bombay Stock Exchange (BSE), and is expected to conclude by the end of India’s financial year, March 31, 2026.
In the BSE filing, USL’s Managing Director and CEO, Praveen Someshwar, said, “RCSPL has been a valuable and strategic asset for USL. However, it is non-core to our alcoholic beverage business. This step reinforces USL’s and Diageo’s commitment to reviewing our India portfolio to ensure sustained long-term value creation for all stakeholders, while keeping RCSPL’s best interests in mind.”
A decade-long association could be nearing its end
Diageo’s involvement with the RCB franchise began in the mid-2010s, following the exit of former USL chairman Vijay Mallya. Under Diageo’s full ownership, the franchise has grown into one of the IPL’s most recognizable brands, featuring global stars and cultivating a large, loyal fanbase. RCB’s recent on-field success — including its historic first IPL title earlier this year and a WPL championship in 2024 — has added to the team’s commercial appeal.
According to media reports, Diageo was previously seeking a valuation of around $2 billion for its stake in the franchise, though no official figures were disclosed in the filings. Analysts believe the timing of the review could allow Diageo to capitalize on the team’s heightened brand equity and maximize potential returns from any sale.
RCB was originally acquired in 2007 for USD 111.6 million, making it the second-most expensive franchise at the time of the IPL’s launch. The team’s current brand value has been estimated at approximately USD 140 million, though market interest and competitive bidding could push any final transaction significantly higher.
Strategic outlook and market context
While RCB accounted for 8.3% of USL’s core profit in the financial year ending March 2025, the business has been categorized as non-essential to Diageo’s long-term vision in India. The company has faced mounting cost pressures and evolving consumer preferences in the market, prompting a broader evaluation of its non-core assets.
The review will assess both full and partial divestment options, though any change in ownership would require formal approval from the Board of Control for Cricket in India (BCCI), which oversees franchise governance in the IPL.
Despite the ownership uncertainty, RCB’s operations are expected to continue unaffected heading into the WPL and IPL 2026 seasons. The WPL is scheduled to begin in January, followed by the IPL in March, where the men’s team will return as defending champions.
As Diageo sharpens its focus on its primary business lines, the outcome of this review could signal a major shift not only for the Royal Challengers brand but also for the business landscape of Indian franchise cricket.
