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The mega deal of IPL team Rajasthan Royals has created a stir in the world of sports business. In this deal worth more than Rs 13500 crore, the team has gone into the hands of a new consortium. This deal includes not only the purchase price but also taxes and fees worth thousands of crores. Both the old owner and the new buyer will have to make a huge payment.
Rajasthan Royals was bought in 2008 for Rs 270 crore.
New Delhi. The Indian Premier League has now become not just a cricket platform but also the world's largest sports business platform. Every year the valuation of teams is touching new heights and amid this trend, a big deal has come to light regarding Rajasthan Royals, which has attracted the attention of the entire market.
In this deal worth about 1.63 billion dollars i.e. more than Rs 13500 crore, the team has now gone into the hands of a new consortium. The special thing is that the franchise which was bought at a very low price in 2008, is being sold for thousands of crores today, which shows the rapidly growing power and global attraction of IPL.
Big mathematics of taxes and fees
The most interesting part of this deal is its tax and fee structure. According to IPL rules, the new owner will have to pay 5 percent of the total deal value to the Board of Control for Cricket in India (BCCI) as transfer fee. According to this, about Rs 675 crore will go towards entry fees only. This fee is paid on top of the principal amount. That means the buyer will have to pay Rs 13500+675 crore. In this way its total liability becomes Rs 14175 crore.
At the same time, the old owner Manoj Badale will have to pay long term capital gains tax on his profits. This amount could be around Rs 2700 crore, because he had bought the team at a very low price. Since Badale is a foreign national, the new buyer will have to first deduct tax and give it to the government while making the payment. This is called withholding tax. Apart from this, it will also be necessary to take approval from agencies like RBI and ED to complete this deal. That means only around Rs 10,000 crore will come into the hands of Badale. However, despite this he is going to be very profitable.
The story started from 2008
Rajasthan Royals was bought by Manoj Badale in the year 2008 for about $67 million i.e. about Rs 270 crore. At that time IPL was a new tournament and no one had any idea that its value would increase so rapidly in future. After about 18 years, now the same team has been sold at a value of thousands of crores. Since then, the value of the team has increased by 2332 percent or about 24 times. This surge clearly shows the IPL becoming a global brand and the increasing interest of foreign investors in it.
who bought the team
This time Rajasthan Royals has been bought by a big international consortium, which is headed by Kal Somani. This group includes stalwarts like Rob Walton, who is counted among the richest businessmen in the world. Apart from this, the Hamp family headed by Sheila Ford Hamp is also involved, who has decades of sports management experience.
Shilpa Shetty also has a relationship
Shilpa Shetty's name is also added to this story, although she has nothing to do with this deal. She and her husband Raj Kundra had bought about 11.7 percent stake in the team in 2009. At that time this investment was about 15.4 million dollars. But the situation changed after the spot-fixing controversy of 2013. Due to this controversy, Rajasthan Royals were also suspended for two years. After this, in 2015, Shilpa Shetty and Raj Kundra sold their entire stake and completely separated from the team.
About the Author
Jai Thakur has been associated with the world of news since 2018. Working as Senior Sub Editor in News18Hindi since 2022 and is part of the business team. There is interest in news related to business, especially stock market. Apart from this…read more
