Sports leagues multiply but not the money
India might be becoming a nation of leagues, but profits don’t seem to be trickling in for the franchises just yet. However, in the race to outdo each other, it will be a survival of the fittest. HT dissects the multiple leagues that have mushroomed.other Updated: Dec 28, 2014 08:06 IST
India might be becoming a nation of leagues, but profits don’t seem to be trickling in for the franchises just yet. However, in the race to outdo each other, it will be a survival of the fittest with those with the deepest pockets at the forefront, often pushing sport to the background in the process. HT dissects the multiple leagues that have mushroomed...
Indian super League | Sons of the soil get a taste of the real action, but rewards will take time to come
A day before FC Goa hosted Atletico de Kolkata in the semifinal of the Indian Super League (ISL), an official told HT this story. Some years back, the official had taken two India midfielders, born and raised in Goa, to a children’s football camp. “Everyone in that camp was wearing Messi, Ronaldo, Manchester United or some other European team’s shirt. Not one of the boys recognised the players,” said the official. Both players were part of the ISL.
Should that change and should a Mandar Rao Desai or Romeo Fernandes become names in the football hub that Goa always was, the ISL would have served one of its aims. Given the kind of reaction to Desai and Fernandes’ names being announced in the stadium on match day, it would seem Indian football’s days of staying incognito are over.
Ditto Mohammed Rafique. Who would have thought he would be mobbed by young autograph-hunters, some of them in Atletico de Kolkata shirts, after the final in Navi Mumbai?
A little before that happened on the night of December 20, Atletico de Kolkata skipper Luis Garcia had told the media, “The ISL is about Indian players, not marquees, not international players.” Before him, Kerala Blasters’ manager and goalkeeper David James said: “It was fitting that an Indian scored the match-winning goal in the final.”
Among the many things that the ISL has done is that it has made the club footballer in India feel more wanted. For over three months, players stayed in top hotels, travelled more comfortably than they usually have and had professionals monitoring diets and injuries. No wonder Kerala Blasters’ Mehtab Hossain spoke glowingly of the facilities and that he was going back to the Indian season because he had a job to keep.
Kushal Das, general secretary of the All India Football Federation (AIFF), said some of the benefits of the ISL would have a positive effect on the I-League, “such as developing a climate of watching Indian football from 7pm.” The infrastructure, too, has been upgraded at some of the traditional Indian venues. Also, the general interest in Indian football has grown. Some 42 crore people watched the ISL.
According to an ISL official, the average attendance was 26,000 making it the most watched league in Asia and the fourth most watched in the world. It is behind only the Premier League, La Liga and Bundesliga. By November 27, it had registered 1 million in-stadia fans, according to an ISL release. The ISL’s first match had 65,000 people watching at the Salt Lake stadium and the final had 36,848 at the sold out DY Patil.
The ISL was bankrolled by IMG-Reliance with STAR being the official broadcasters. The duo has formed a company called Football Sports Development which owns the league. They spent around Rs 350 crore for the first season.
Each of the eight franchises paid an annual franchise fee of Rs 15 crore. Through the central sponsorship pool, nearly Rs 100 crore was generated of which Rs 80 crore would be shared equally among the eight franchises, each getting around Rs 10 crore. The franchises are said to have spent between Rs 30-40 crore in the first year. Ticket sales, sponsorship deals they got on their own, money from the central broadcast pool and merchandise are their sources of income. Franchises aren’t expecting more than 50% return on investment in the first season.
Apart from this, each franchise signed deals worth Rs 5-8 crore for this season. Most franchises had between five and 10 sponsors/partners. The central sponsorship pool generated approximately Rs 100cr.
Most of the eight franchises have gone on record saying it would take at least a couple of seasons for interest and revenue to increase. “We are not looking at making money now,” ATK co-owner Sourav Ganguly had said before the start of the competition. In April he had said, “I asked Sanjiv (Goenka), Harsh (Neotia) and Utsav (Parekh) whether they would be willing to lose some serious money for the next few years…”
It is too early to tell the impact of ISL on improving the standard of sport in the country. But this much can be said — the standard of football in the ISL was anywhere between 30-40% better than what is seen in the I-League. One of the reasons for that was the increase in the number of foreigners — six in the ISL as opposed to a maximum of three on field and four in the I-League.
Maybe the last word should be had by Sachin Tendulkar. Speaking in London recently, the Kerala Blasters’ co-owner had said: “India has all the potential to make football as big as anywhere else in the world. But it’s not going to happen overnight. It’s going to require a mega effort…”
Indian badminton League | Not quite a shuttle express to success, but promoters keep grandiose plans intact
Indian badminton already had an international star in Saina Nehwal when the powers-that-be decided to go cricket’s way and launch the Indian Badminton League (IBL). Conventional wisdom suggested that the marketing advantage a multi-city league has, it should have been a win-win situation for the Badminton Association of India and Sporty Solutionz Pvt Ltd, the commercial rights holders of the IBL. However, it was anything but that.
The maiden edition incurred a loss of around Rs 25 crore. According to figures, the total expenditure of the league stood at Rs 85 crore, of which only 65-70 per cent was recovered. A brand value of $1 million (Rs 6.35 crore), which made it the richest badminton tournament, IBL boasted of impressive player wages. Lee Chong Wei was roped in by the Mumbai franchise for $135,000 (Rs 85.7 lakh), while a $120,000 pay cheque (Rs 76.26 lakh) made Saina the second-highest paid player. Though Sporty Solutionz refused to give out details of the revenue, major sources are sponsorship fees from title sponsors, Vodafone, media rights, merchandise sales and gate collections. The franchise fee was Rs 3.5 crore each.
To make things worse, the second edition — scheduled for late this year — has been postponed due to a tight international schedule and player availability. Surely, the financial troubles of the first edition would have also played a part. However, Rajender Sharma, head-news content and productions of Sporty Solutionz, said rather than back off, organisers are planning to expand.
“The number of participating teams will increase from six to eight and then eventually to 10,” he told HT. When asked about the expected time to break even, Sharma said, “We are expecting to break even in the second year, or latest in Year Three.”
Three tennis leagues |Small league shows the way for big money players
For players it’s good money but the three leagues that unfolded over two months this year did not really help in improving the standard of tennis in the country.
For a high-profile product like Mahesh Bhupathi’s International Premier Tennis League (IPTL), even names like Roger Federer and Novak Djokovic were not enough to fill the 15,000-capacity Indira Gandhi Indoor Stadium, courtesy exorbitant ticket prices. For the IPTL, the franchise fee itself was a whopping $1.2 million (Rs 7.6 crore) per annum for 10 years. Each of the four teams invested approximately $12.4 million (Rs 78.7 crore) in the first year.
Besides players and franchise fee, they had to incur an additional travel cost of approximately Rs 4 crore. With total revenue of around $3million (Rs 19 crore approx) per year assured from broadcast rights and sponsorships, the teams would be able to break even by the sixth year.
On paper, IPTL’s future looks skewed mainly due to the lack of transparency at every stage of the league. Leander Paes recently said, “The sustainability of the leagues will depend on how they are received by fans and franchise owners. The fans need to enjoy what they watch and the owners need to get returns, tangible or otherwise.”
The same applies for Vijay Amritraj’s Champions Tennis League (CTL). A six-team event, where each team went for Rs 6 crore. CTL’s total investment was far less when compared to IPTL, but Amritraj doesn’t see IPTL as competition. The least talked about is the Premier Tennis League. Investing around Rs 20 lakh, most owners will get returns in the fourth edition, which is in 2015. Solely comprising Indian players, this league is a classic example of a business model clicking, even though at a much smaller scale.
(Krithika Gopalkrishnan)Indian Premier League | Continuing to chug along, despite all its frailtie
If the smaller franchises in the Indian Premier League (IPL) are struggling for survival, two-time winners Chennai Super Kings informed the Supreme Court recently that they were yet to break even. So far, the losses of IPL franchises have crossed the Rs 350-crore mark.
The revenue structure of the league is such that only the Board of Control for Cricket in India (BCCI) is the winner. Television rights were sold to Sony for $1.02 billion (Rs 6505 crore) for 10 years and 80 per cent of the broadcast money was distributed among the franchises for the first two years. At the moment, the IPL is getting 40 per cent of the broadcast revenue. Besides, franchises are entitled to an equal share of 60 per cent from the sponsorship revenue. The rest is going to the BCCI’s account.
The official broadcaster has been paying Rs 10.5 crore to the BCCI for a match, which till Season Five was Rs 7 crore. Pepsi, the title sponsor till 2017, paid Rs 397 crore, which is double of what DLF had paid.
The other portion of a franchise’s revenue comes from gate tickets, in-stadia advertisement, team sponsorship and prize money.
The IPL remains an illusion. While teams are now openly accepting that losses are piling up, they are also claiming that the value of the franchise has gone up.
The league is also going through its worst phase after the spot-fixing scandal last year tarnished its image as a global brand. Yet, the BCCI claims viewership has gone up. Despite its frailties, IPL has changed Indian cricket forever.
Apart from the money on offer, young cricketers can now aspire for an India cap after a decent season in the IPL. If one looks for names, Axar Patel, Manpreet Gony and Rahul Sharma are some that come to mind.
First Published: Dec 28, 2014 00:37 IST