Franchises in the Indian Super League (ISL) got approximately R 6.75 crore each from the central revenue pool after the second edition. The amount would cover the first team budget of most I-League teams but in the context of the ISL, it may not seem a lot. However, given the fact the teams got nothing from here in 2014, this could also be interpreted as 6.75 crore reasons to expect more from the third season scheduled to begin in October.
This figure was sourced from the ISL and corroborated by more than one franchise. Each team gets 10% of the total amount pooled after 20% from the whole is deducted as organisational expense. That would mean the central pool in ISL2, where R 12.45 crore was spent in one day on Indian players in July 2015, was worth almost R 84.4 crore. With Hero as the title sponsor, the league had three associate sponsors and 13 official partners.
“About this much is clear: the market for football in India is growing especially among the urban, middle class and beyond. So, this is no surprise. It is going to increase further,” Gaurav Modwel, FC Pune City chairman, told HT over the phone from Pune on Wednesday.
Generating sponsorships on its own, ticket sales, merchandise, prize money and an equal share from the central pool are the major sources of income for franchises.
Atletico de Kolkata second
After adding the numbers, it turned out that Chennaiyin FC earned around R 36 crore, thanks in the main to their winners’ purse of R 8 crore, which was the maximum. Losing semi-finalists Atletico de Kolkata were second having reportedly generated revenue worth around R 32 crore. Even as franchises make fresh pitches for ISL3, it would mean that some have already come close to breaking even by the end of the second year. On an average, franchises spent between R 35-40 crore last season.
And even the four out of the prize money bracket because they didn’t make the semi-finals earned between R 14 to R 20 crore, according to numbers available with HT.
A business plan circulated among franchises, of which HT has a copy, before the competition began in 2014 earmarked 2017 as the turnaround year. It is also supposed to be the one where the I-League and the ISL merge.
Modwel though said franchises should realistically look at breaking even in five to seven years. “There are two ways teams can make money. One is by creating and selling players and that will take time. The second is for the internal sponsorship pool and the central revenue pool to grow. That will start happening when the league becomes bigger and longer hopefully from 2017. And, I think it is important to reach near break-even consistently. Once that happens, owners will look to buy better players and that again will boost revenue. And though a nine-month league will increase costs as opposed to one that runs for three months, the increase will not be by a factor of three.”
Reduced spend on stadia helped boost the central pool. For the first season, the league had to invest nearly R 50 crore, according to a spokesperson in 2015, in getting eight venues, practice grounds ship-shape. To get the ISL up and running, the spokesperson said the league spent nearly R 100 crore. Wiser for the experience, it reduced costs in Year 2.
But even then, the amount generated for the central pool and by most teams is an improvement. The outer limit of the approximate amount generated in the first year, according to sources, was R 80 crore.
“We had 24 associate sponsors last time,” said an Atletico de Kolkata official who did not want to be named as he is not authorised to talk to the media on this. They had eight in 2014. Atletico de Kolkata earned the maximum, over R 14 crore from sponsorship in ISL2, said the official. And they got R 7 crore from ticket sales, according to data with the ISL of which HT has a copy.
This time, the franchisee’s website shows, Atletico de Kolkata have managed to retain Birla Tyres as their main shirt sponsor. Each team had six shirt slots to sell in ISL2 and before the competition began, Atletico de Kolkata had sold all.
Last year, Atletico de Kolkata, Chennaiyin FC, Kerala Blasters all had one title sponsor and four associate sponsors apart from official partners. Northeast United had a main sponsor and three associate sponsors and, according to ISL data, earned R 10 crore from sponsorship. Along with Delhi Dynamos, Atletico de Kolkata and Chennaiyin FC, Northeast United were the only other team to get R 10 crore or above through sponsorships on their own.
According to an article in Mint last April, which quoted the ESP Properties-SportzPower report, on ground sponsorship for football increased to R 114 crore in 2015 from R 59.5 crore in 2014, a 91.6% hike.
“Sports other than cricket have successfully established themselves in terms of revenue and fandom within the Indian sporting firmament,” said Thomas Abraham, co-founder of SportzPower. “Sports like kabaddi and football have massively increased sponsorship revenues in 2015.”
The report said 10.4% of India’s total spend on advertisement in 2015 was on sport with the sponsorship market growing from R 4,616.5 crore in 2014 to R 5,185.4 crore last year.
According to Vinit Karnik, business head, ESP Properties, 2016 will be a ‘fantastic’ year for players, federations, brands and spectators in terms of having a ‘deeper engagement with sporting properties.’ ISL and its clubs will hope he is right.
List of sponsors for ISL’s central revenue pool: Title sponsor: Hero. Associate sponsors: Maruti Suzuki, Samsung Galaxy, Flipkart. Official partners: Amul, Puma, The Muthoot Group, Gatorade, Volini, DHL, Manyavar, Hewlett Packard, Nicotex, Imperial Blue, Pond’s Men, Nissin.
Approximate earnings for teams
Chennaiyin FC: R 36 crore. Atletico de Kolkata: R 32 crore. Kerala Blasters: R 21.75 crore. FC Goa: R 19.89 crore. Northeast United FC: R 19.86. Delhi Dynamos: R 18.25. Mumbai City FC: R 16.75.