RCB team owner RCSPL earns windfall profit in FY21

Royal Challengers Bangalore team owner RCSPL earns windfall profit in FY21

RCB’s fourth position finish in the IPL season 2020 boosted RCSPL’s revenue with a ‘playoff fee’ reward of Rs 4.4 crore

The rise in profits was on account of a 13% increase in revenues from operations at Rs 231.9 crore in FY21. Credit: PTI file photo

Royal Challengers Bangalore (RCB) may be struggling to win its maiden trophy in the cash-rich Indian Premier League (IPL) cricket tournament, but its owner Royal Challengers Sports Private Limited (RCSPL) is back to winning ways.

RCSPL, a wholly-owned subsidiary of United Spirits Limited (USL), has posted a whopping 14-times growth in its net profit for the year ended March 2021 at Rs 54.2 crore. It had posted a huge drop in its net profit in FY20 at Rs 3.8 crore compared to Rs 84.8 crore in FY19.

The rise in profits was on account of a 13% increase in revenues from operations at Rs 231.9 crore in FY21. Its revenues stood at Rs 204.6 crore in FY20, according to its financial statements available on the website of USL’s parent company, Diageo.

The rise in revenues was on account of an increase in its share in the central rights income from the Board of Control for Cricket in India (BCCI) for conducting and participating in cricket matches during the IPL league season.

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RCB’s fourth position finish in the IPL season 2020 boosted RCSPL’s revenue with a ‘playoff fee’ reward of Rs 4.4 crore.

An IPL franchise cricket team also earns revenue from sponsorship, royalty & licensing fees, sale of tickets for matches held at their home ground and fees collected through the transfer of their players to other franchise teams. It also got the benefit of reduced tax outgo amounting to Rs 30.4 crore during the year.

RCSPL’s revenue from sponsorship, royalty & licensing fees for the year stood at Rs 60.1 crore, up 12.55% from Rs 53.4 crore in 2019-20.

Interestingly, the 13% total revenue rise comes despite the fall in revenue from the sale of tickets and player transfers. There was no revenue from these sources in FY21 since the IPL was shifted to UAE due to the Covid pandemic in 2020. Also, RCB had no player transfers in 2020. The revenue from both these sources in FY20 stood at Rs 31.2 crore.

An annexure to the independent auditor’s report states that RCSPL had received demands totalling Rs 35 crore from the service tax department for the financial years 2008-09 to 2012-13. The same amount has not been deposited/provided for by the Company since it expects a reasonable likelihood of relief being granted in its favour.

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