Diageo's RCB Exit Plan: Why Strategic Review Signals Franchise Sale

The Red and Gold franchise has had two outstanding years in the past, winning the WPL title in 2024 and securing the IPL title this year, defeating the Punjab Kings (PBKS) in the final.

As per ESPNCricinfo, in a filing with the Securities and Exchange Board of India (SEBI) on Wednesday, Diageo said it was conducting a "strategic review" of its investment in the franchise, which is expected to be completed by March 31 next year.

RCSPL is a fully owned subsidiary of United Spirits Ltd, which is owned by Diageo.

"RCSPL has been a valuable and strategic asset for USL; however, it is non-core to our alcobev (alcohol and beverages) business," said Praveen Someshwar, Managing Director and CEO of United Spirits, in the SEBI filing.

"This step reinforces USL and Diageo's commitment to reviewing our India portfolio to ensure sustained long-term value for stakeholders, while keeping RCSPL's best interests in mind," it added.

The move comes amid Diageo's struggles in its core, global business of drinks, which has faced significant pressure over the years. In a SEBI filing dated June this year, the company had denied reports of RCB's sale, with USL's company secretary Mital Sanghvi calling it "speculative".

Speculations about a possible divestment have intensified since the stampede outside the M Chinnaswamy Stadium in Bengaluru, the franchise's home arena, during the victory celebrations just a day after the team won the title in June.

RCB is among the most popular IPL franchises, primarily due to its marquee player and Indian legend, Virat Kohli, and foreign stars like Chris Gayle, AB de Villiers, Glenn Maxwell, and Faf Du Plessis, who have played for the franchise over the years.

When the tournament was launched in 2008, RCB was the second-most expensive franchise. Vijay Mallya, the then chairman of United Spirits, brought the franchise for 111.6 million US Dollars way back in 2007. He stepped down as the director of RCSPL in 2016, with Diageo becoming the whole owner of the company

ESPNCricinfo has also reached out to RCB's vice-president Rajesh Menon for a comment.

The development, however, is unlikely to have any major impact on the team's planning for upcoming seasons across both the IPL and WPL. In case there is a new owner, they will need to get a clearance from the IPL, and the process could go way beyond the next year's season. While WPL is likely to take place in January, IPL will start in March and run through May.

- ANI