IPL 2023: RCB's Success Drives United Spirits' Profit Surge

The Indian Premier League (IPL) has become a lucrative opportunity for liquor companies, with cricket mania significantly boosting their profits.

Royal Challengers Bangalore (RCB), an IPL team, saw its revenue double in the financial year 2023-24, according to Navbharat Times. RCB's net profit reached Rs 222 crore, a stark improvement from the Rs 15 crore loss the previous year. United Spirits (USL), India's largest liquor company, reported that cricket contributed 16 per cent to its net profit.

In 2023-24, RCB's revenue increased by an astounding 163%, reaching Rs 650 crore compared to Rs 247 crore the previous year. Two years ago, RCB's contribution to USL's profit was just one per cent. USL, part of Diageo PLC, highlighted this dramatic turnaround in its annual report.

After acquiring RCB for $111.6 million in 2008, industrialist Vijay Mallya integrated the team as a subsidiary of USL. Despite Mallya's legal troubles and residence in the UK, USL reported sales of Rs 25,724 crore and a net profit of Rs 1,312 crore for 2023-24. Profits grew by 25% despite a 7% decline in sales.

Last year, USL expanded into women's cricket by adding a team that won the first edition of the Women's Premier League. This move further solidified USL's presence in cricket and contributed to its overall profitability.

RCB: A Key Asset for Branding

Experts believe that RCB's profitability might soon surpass that of USL's sixty-three liquor brands. Franchise owners and investors are increasingly focusing on maximizing returns on investment as the IPL matures and stabilizes.

Abhijeet Kundu, Senior Vice President (Research, Consumer and Retail) at Antique Broking, stated that RCB is now crucial for USL's branding and marketing efforts as well as its financial success. The revitalization of the Royal Challenge whisky brand is largely attributed to RCB's influence.

The remarkable financial performance of RCB underscores the symbiotic relationship between sports and business. As IPL continues to grow, it offers substantial opportunities for companies like USL to enhance their brand value and profitability through strategic investments in cricket teams.