Royal Challengers Bangalore have made a net profit of ₹ 143 during the 2018-19 fiscal period. This amounted to over 10% of the total operating profit of India’s leading liquor brand United Spirits.
Indian Premier League franchisee Royal Challengers Bangalore is a United Spirits subsidiary ever since the it was bought by fugitive liquor baron Vijay Mallya in 2008.
In spite of the poorest show for the IPL 2019, the RCB has more than doubled its revenue to ₹ 313 crore for the year ending in March 2019. The teams earnings before interest, tax, depreciation and amortisation (EBITDA) had increased 431% over the previous year to ₹146 crore, United Spirits has stated in its report.
RCB’s contribution to the USL profit was a mere 3% in the last fiscal.
The RCB profits though include the revenue for the IPL Season 11 and a part of IPL 2019 revenue as the league this year had started on March 23 and the revenue for the week is taken into consideration for the 2018-19 fiscal. Excluding the latest season of IPL, RCB had revenue of ₹260 crore and an EBITDA of ₹123 crore, business daily Economic Times has reported.
RCB had recorded “exponential growth in commercial partnership revenue due to a strategic shift from just monetising jersey real estate to player time cost, and moving from just ticket revenue to match-day income with initiatives aimed at increasing gross margin per seat”, USL Chief Financial Officer Sanjeev Churiwala has told ET.
RCB in spite of some of the biggest names of global cricket on its ranks, has been among the weakest performers across the all seasons of the IPL. The team had posted its maiden profit in financial year 2017 with revenues of ₹162 crore.
The IPL franchise owners and investors are likely to focus more acutely on return on investment as the world’s premier domestic cricket tournament moves into a more mature and stable phase, experts said.
“RCB will command a premium even after not performing well largely because of Virat Kohli and also because Bangalore is a huge market for advertisers. It is their gateway to South India. Hence it is slightly insulated from their on-field performance,” said an IPL Brand Valuation Report 2018 by Duff &; Phelps.