Current Indian Cricket Team – In the decade since he founded private equity firm Redbird Capital Partners, Gary Cardinale has invested in sports properties such as Fenway Sports Group, the Yankees’ YES Network and Italian soccer team A.C. Milan. One of his friends at Redbird, Alec Scheiner, previously served as an assistant general manager of the NFL’s Dallas Cowboys and later ran the Cleveland Browns.

Then both men know very well how to do billion dollar business. The sport where they see the most winnings these days might be surprising, though.

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“When we first started looking at cricket, we weren’t experts at all,” Shaner said. “But the more we looked into it, the more we realized it felt like the N.F.L. did 20 years ago.

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Therefore, in June 2021, Redbird bought a 15 percent stake in Rajasthan Royals, a team that competes in the Indian Premier League, for $37.5 million. The amount of money that has been poured into the league over the past 15 months suggests that the Redbirds have made a bargain.

Four months after closing the deal, I.P.L. The development team was sold for $940 million. Eight months later, the league negotiated new television and digital broadcast rights worth $6.2 billion.

More than $1 billion a year, meaning India’s top cricket competition — a closed league with just 10 teams — now brings in more annual broadcast revenue than top leagues like the N.F.L. ($10 billion a year), the English Premier League (about $6.9 billion) and the N.B.A. ($2.7 billion).

In fact, the I.P.L., which lasts only two months, is second only to the N.F.L.

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Disney and Sony were among the bidders in last year’s broadcast rights bid. CVC Capital Partners, the private equity firm that owned Formula One, had one I.P.L. a team owned that already has interests in rugby and football. Beat it among them? The American owners of the Tampa Bay Buccaneers of the N.F.L. and the English soccer giant Manchester United.

“I’m not sure we even thought there would be such a global demand for franchises,” Shaner said. Redbird’s $37.5 million investment is likely to quadruple in value within a year. And with new investors on the move, most experts agree that every I.P.L. The franchise is now worth at least $1 billion or more.

That there is money in cricket in India is a new phenomenon. In the late 1990s, sports managers in India had to pay state broadcaster Doordarshan to broadcast the national team’s matches. The start of the I.P.L in 2008 changed all that. Teams in the league play Twenty20, a three-hour television-friendly version of the game that takes on multi-day Test matches, which has given cricket its fast-paced image. I.P.L. The games now attract more than 200 million domestic television viewers.

India’s passion for cricket and the sheer size of the market has caught the eye of deep-pocketed investors from abroad. Credit… Indranil Mukherjee / Agence France-Presse – Getty Images

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The height of the league is faster. Its architect, Lalit Modi, was a mid-level executive in the Indian Cricket Board, the Director of Sports in India. He rightly saw that Twenty20 could marry India’s love of cricket with more commercial opportunities, and in late 2007 a series of potential negotiations to establish a sports league began.

He promised a group of the world’s best cricketers that they would not get their salary anywhere else. He held a large auction to sell the teams to members of India’s business and media elite. And then he convinced Sony to pay $900 million for the rights to broadcast the first 10 editions of the tournament.

“It ticked a lot of boxes from an investment perspective,” Mustafa Ghos, president of one of the league’s founding teams, told the Daily Capitals. “It’s a closed league with no restrictions, so your income is protected regardless of your performance, while spending is limited by the player’s salary cap.”

With these safeguards in place for potential team owners, Modi sold his eight teams for $723 million. Buyers included industrialist Mukesh Ambani and Bollywood actor Shah Rukh Khan. Twenty-over cricket, once dismissed by traditionalists as “bump and giggle”, was beginning to be taken seriously.

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Redbird Capital’s investment values ​​Rajasthan Royals at $250 million. Four months later, the I.P.L. The expansion team was sold for almost a billion dollars. Credit…Bangalore News Photos, via Associated Press

However, the league’s early existence was often uneventful. For security reasons, the second crop had to be sent to South Africa. After a power struggle, Modi was sacked by the BCCI. In 2010. Three teams were disbanded after experiencing financial difficulties and two others received multi-year bans after senior officials were implicated in match-fixing and illegal betting.

But it was only after India’s Supreme Court intervened, tightening governance rules and appointing a Judicial Commission on Conflict of Interest, that the I.P.L. Actually started as an investment vehicle.

The Supreme Court’s intervention was a “watershed,” says Matthew Wheeler of A&W Capital, which advises on sports investments in India. “When the Supreme Court got over it,” he said of the league, “you felt better than ever.” A $2.5 billion broadcast rights deal for the 2017 to 2022 period — a fivefold increase from the previous deal — only confirmed his view.

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Wheeler, a former professional cricketer, said his company has started recommending that customers consider buying the I.P.L. Franchise in 2017. “The first person I spoke to said her fund doesn’t extend to India,” he said. “The second was not sure. And the third was CVC, who asked for our help.

CVC Capital Partners had a presence in India but was not involved in cricket. Wheeler said he spent three years learning all about the I.P.L. And building a relationship with the team owners and the B.C.C.I., he said, “You have to be patient. Then, in August 2021, the board announced that it would expand the I.P.L. Eight to 10 teams. The auction was over.

An Indian company, RPSG Group, bought the Lucknow-based franchise for $940 million, while CVC bought the Ahmedabad team for $750 million.

Offers in B.C.C.I. The minimum price, which put it at $270 million, and RedBird’s $250 million valuation for Rajasthan Royals, was made just four months ago. It also meant that the value of one franchise in 2022 is now more than the total price paid for all eight original teams in the first auction in 2008.

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Other disappointments included the Adani Group, a conglomerate owned by an Indian billionaire, and Lancer Capital, a private equity firm led by Buccaneers and Manchester United owner Avram Glazer.

Stars like Rohit Sharma are among the players of the I.P.L. every year. Credit … Dan Hambrechts/EPA, via Shutterstock

The timing of the department’s development was deliberate. The big league means an increased number of games it can sell in its new television rights deal. The deal surprised even sports industry veterans: $6.2 billion over the next five years, roughly split between domestic broadcast rights and digital rights.

Adam Sommerfeld, a sports investment analyst at Certs Capital, said he now believes buying into the I.P.L. is a no-brainer for private equity and institutional investors.

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“They will invest in the most popular sport in the second most populous country in the world,” Sommerfeld said. “Even if you buy and hold, the value of the I.P.L. the teams obviously receive significant value.

Unlike European football, for example, where owners of even the biggest, most storied clubs struggle to make a regular profit and where investors in medium-sized and smaller clubs face the annual prospect of punitive financial consequences if they are relegated. , the structure of the structure. I.P.L. That means extra money is almost guaranteed. Media rights and league sponsors go into a central revenue pool, which the B.C.C.I. And 10th I.P.L. Franchises allow teams to control all of their local revenue, which includes local sponsorship deals, ticket sales and merchandise, and player salaries – traditionally a sports team’s largest expense – limited at the management level.

A calculation by K Shrinivas Rao, an Indian pundit, suggests that teams will spend just 35 percent of their central revenue on wages by 2021. Every I.P.L. The team is believed to have turned a profit in 2021, even as the pandemic required the games to be played in empty stadiums.

The problem for investors right now is the lack of opportunities. Even after this development, the I.P.L. Still has only 10 franchises. Sommerfeld says he has a list of “six or seven” current owners of American pros who have inquired about the I.P.L.

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The only problem seems to be that no one who currently owns the team is interested in parting with it.

A version of this article appears in print, section B, page 8 of the New York edition