Why did IPL Teams Acquire MLC Franchises?
Some of the most well-supported teams in the Indian Premier League (IPL) have acquired four franchises in Major League Cricket.
The Mumbai Indians, Chennai Super Kings, Delhi Capitals, and Kolkata Knight Riders have all bought a stake in the league. They will run MI New York, Texas Super Kings, Seattle Orcas, and Los Angeles Knight Riders, respectively.
IPL Teams Are Building Their Brand Outside Of India
It continues a trend of IPL teams expanding their brand outside their borders and into other territories. The Mumbai Indians, for example, can now count the USA, South Africa, and the UAE on the list of countries where they have representation.
Major League Cricket raised $120 million in Series A and A1 fundraising rounds, though it is unclear whether this includes any IPL team's financial contributions.
But what is in it for IPL teams? How much can they make from these acquisitions? What is the MLC benefitting from the massive finances involved?
How do IPL Teams Benefit From MLC Acquisitions?
Purchasing a team from a different league is not unheard of in professional sports. In soccer, for example, Manchester City purchased expansion team New York City in Major League Soccer in 2015 as part of a $100 million deal involving the New York Yankees from Major League Baseball.
There are eye-catching benefits, which include:
Expanding reach
By purchasing existing teams, a professional cricket outfit can acquire top batsman and top bowlers, staff members, and fan bases they wouldn't otherwise have access.
Increased revenue streams
Owning multiple teams allows the parent company to benefit financially through shared resources such as facilities, marketing, and ticket sales.
Establishing its brand
Owning multiple teams can help a professional sports team increase its awareness in new markets and regions. This allows the organization to better engage with fans across the globe and reach a wider audience for their products and services. Buying other franchises also provides strategic advantages when negotiating leases or contracts while allowing a professional sports team to strengthen its brand and increase profits.
Access to new resources
The parent organization can access further resources that benefit their operations. For example, by purchasing a minor league or affiliate, a professional sports team can access the latest training and development techniques that could help their players succeed. Additionally, owning multiple franchises may also provide a professional sports team with valuable insights into different markets and allow them to better understand fan preferences in those areas.
Sowing Seeds of Goodwill
The super-wealthy are always thinking of ways to give away their money to good causes, although there may be other interests at play, too (cough*tax breaks*cough).
Still, significant investment in a sporting project can sometimes have massive positive knock-on effects.
The eye-opening and game-changing takeover of Manchester City in the Premier League, for example, is a shining example of how spending money on club infrastructure and the surrounding area can transform fortunes and earn the love and respect of fans.
The investment by IPL teams into Major League Cricket will not be as far-reaching as some of sport's other mega-money deals, mainly because cricketing popularity in the USA is still embryonic. However, those opening up their wallets can always claim to be advancing the interests of the game from an undeniably high horse, one which is difficult for the harshest of cynics to unsaddle.
How Does Major League Cricket Benefit From Investment?
It's no secret that money makes the world go round. But investment from some of IPL's most renowned franchises into Major League Cricket opens up some avenues to USA Cricket, the sport's governing body.
There are already attractive salaries on the table, as evidenced by the arrival of world superstars Aaron Finch, Marcus Stoinis, and Quinton de Kock to the league. Furthermore, the investment will attract better players and coaches in the future.
The funding will also help the league expand its reach by exploring new markets, offering global coverage, and potentially creating new tournaments. Investment in a sports league can be highly profitable to all parties and lead to long-term success.
In Conclusion...
For all these reasons, professional sports teams often invest in other franchises to grow and make more money while investing back into the community.
They can acquire additional resources and expand their reach into new markets by purchasing existing teams. In doing so, these organizations can create more significant opportunities for success and increase profits for the parent company. Buying other franchises can be an excellent way for an ownership model to diversify its operations and create long-term financial and community success.