MUMBAI, May 11 -- Earlier in May, the Lakshmi Mittal family and vaccine-maker Adar Poonawalla successfully bid for Indian Premier League team Rajasthan Royals at a valuation of $1.65 billion, or over Rs.15,600 crore. In March, the Birla family, along with Blackstone PE, Bolt Ventures and The Times of India Group, acquired rival IPL team Royal Challengers Bengaluru for a $1.78 billion valuation, or more than Rs.16,000 crore.

At these valuations, cricket teams are selling for 30x their last reported annual revenue from operations. However, industry forecasts suggest the IPL is losing its sky-high value as the league is expected to fetch stagnant revenue for media rights. What explains the divergence in IPL's value and that of its individua...