Diageo Weighs Options For Stake In IPL Franchisee Royal Challengers Bengaluru

Diageo Plc. is considering options for its ownership of the Indian Premier League cricket franchise Royal Challengers Bengaluru, according to people familiar with the matter.

The British distiller has been holding discussions with potential advisers as it weighs possibilities including a sale of part or all of the club, the people said. Diageo owns the team through its Indian unit, United Spirits Ltd., and may seek a valuation of as much as $2 billion, the people said.

No decision is final and they may decide against selling the team, the people said, asking not to be named as the details are private.

A spokesperson for Diageo declined to comment. A representative for United Spirits didn't respond to requests for comments outside normal business hours.

The discussions come at a time when India's health ministry has been pushing to ban promotion of tobacco and alcohol brands in the IPL, and stop indirect promotion of other unhealthy goods by sports personalities.

Explicit advertising of tobacco and liquor products is prohibited in India, but firms such as Diageo have promoted other products such as soda using top cricketers. 

One of the founding teams of the IPL, RCB was initially acquired by Vijay Mallya, a beer tycoon whose Kingfisher Airlines Ltd. folded in 2012 after failing to pay creditors. Diageo eventually took over RCB after buying Mallya's spirits business.

RCB recently won the IPL for the first time. The team's biggest star is Virat Kohli, who has one of the largest social media followings in the world for an athlete. 

The IPL's surging valuations have made team ownership one of the most sought-after assets in sports. A sale could set a benchmark for future deals in what is now one of the world's fastest-growing sports leagues.

The IPL has evolved into a global entertainment and advertising behemoth, rivaling the National Football League and the English Premier League in commercial scale. The league's short, three-hour matches draw hundreds of millions of viewers across India and globally.

In the US, Diageo's largest market, tariffs and a consumer slowdown have weighed on premium liquor sales. A divestment could unlock capital at a time when the company is streamlining operations and reassessing non-core assets globally.