Diageo's India arm, United Spirits Ltd (USL), announced on Wednesday, November 5, 2025, that it is commencing a strategic review of its investment in Royal Challengers Sports Pvt Ltd, the entity that owns the Royal Challengers Bengaluru (RCB) cricket franchise. This decision aligns with Diageo's global strategy to streamline its portfolio and concentrate on its core alcoholic beverage business. The review is expected to be completed by March 31, 2026.
RCB comprises both the men's and women's teams participating in the Indian Premier League (IPL) and Women's Premier League, respectively. This year, the men's team clinched its first IPL title, while the women's team secured their title in 2024.
According to an exchange filing, Praveen Someshwar, CEO of United Spirits, stated that Royal Challengers Sports "has been a valuable and strategic asset" but is "non-core" to United Spirits' alcobev business. While the company has not disclosed specific details of its investment in Royal Challengers Sports, media reports earlier this year suggested that Diageo was seeking a valuation of approximately $2 billion for the team.
The potential move by Diageo also comes amid growing regulatory scrutiny in India, where the health ministry has been pushing to curb indirect advertising of alcohol and tobacco brands during IPL broadcasts and via athlete endorsements. Although direct advertising of liquor and tobacco is banned in India, companies like Diageo have promoted their soda and other non-alcoholic product lines through branding that is still closely associated with their alcohol products, often leveraging endorsements from high-profile athletes.
United Spirits sells brands such as "Royal Challenge" whisky and "Smirnoff" vodka. The company has benefited from affluent Indians splurging on premium products including high-priced liquor to watches and jewellery. The sports business accounted for 8.3% of United Spirits' total core profit for the year ended March 31, 2025.
It was reported earlier this year that Diageo was exploring the possibility of selling either a partial or complete stake in RCB. At the time, the company was reportedly consulting with potential advisors to evaluate its strategic options.
RCB was initially acquired by Vijay Mallya, former chairman of United Spirits, in 2008 for $111.6 million. Following Mallya's financial difficulties, Diageo gained control of the team through its acquisition of United Spirits in 2014.
A successful transaction for RCB could reshape Diageo's Indian strategy and serve as a case study for global brands reassessing their sports investments under shifting regulatory, market, and brand dynamics. The IPL has grown to rival leagues like the NFL and EPL in terms of advertising impact and global reach. Ownership of an IPL franchise has become a coveted asset in global sport, particularly among private equity firms, conglomerates, and family offices seeking exposure to fast-growing sports properties in emerging markets.
