One of the key advantages that the cricket IPL has had over all the leagues that started mushrooming following its success, was that it had a very strong presence of current global stars. Hockey managed to create a small space for itself for almost the same reason. Other sports, however, have had limited, if any success with their leagues.
The other advantage is that the Indian sports fan is very partial to cricket. The reasons for that are many, and will warrant a separate debate. On the other hand, most other sports in India are struggling to fill even small stadiums and halls. The recent world-class hockey and badminton events are perfect examples. It is also no secret that domestic football is losing viewership, simply because there is so much world-class football available on television networks in India.
In such an environment, this week the football community, or at least a section of it, took a bold step, with the ‘sale’ of teams/franchises for an Indian Super League (ISL) that will have eight teams to start with. The teams will be owned and/or promoted by business magnates, film stars and a couple of iconic cricketers. They came together to stake ownership of the eight teams that were up for sale in Indian football for the ISL. Considering that football is the most popular sport in the world, it was about time there was a proper league for it.
So far, so good. And the value of the teams has been placed in tune with India’s standing in world soccer. It is being said that the teams have been bought for anything between $20 million to $30 million, give or take a little, for a period of 10 years. Seven years ago, the cheapest IPL team, Rajasthan Royals went for $67 million. So, the total amount fetched by the auction/sale of eight soccer franchises in 2014 was around one-fourth of what the cricket teams fetched originally in 2007-08.
In 2010 when the sale of two more IPL franchises happened, the combined price of the two was more than the combined price of eight original IPL teams. So, the perception was that the value of the franchises had increased manifold.
Interestingly, the two new teams, Kochi Tuskers (bought for $370 million) and Sahara-owned Pune Warriors (bought for $320 million), are no longer in the league for various reasons and controversies while another franchise, Deccan Chargers, officially changed hands and was won by the Sun Group in an auction/sale overseen by the BCCI/IPL itself for around $80 million for five years, beginning 2013.
Ever since the IPL showed the corporate houses that sport was indeed a way to ‘win friends and influence people’, a la Dale Carnegie style, they have been ‘queuing up’ to buy teams in different sports. They range from badminton, hockey, golf, kabaddi, wrestling, tennis — not necessarily in that order — and then there are many other sports waiting to set up leagues.
The sad part, (even as everybody mouths the same objective: “We are doing this to grow the sport”) is that everyone is hoping to strike gold, like the franchise owners in IPL seemed to have struck. The notional values of the franchises are huge, but there are numerous restrictions in stake sales and ownership patterns. An old business dictum says the only money you own is the money you have in the bank — even that may have some doubters — and the rest is notional.
It is also no secret that hardly any of the IPL franchises are profitable and excursions to South Africa and UAE are also a dampener. But they still prefer to hold on to the cricket portfolio, simply because it is a status issue. For many owners, IPL was the only reason they were getting noticed and they could also curry favours with many across the board.
Who doesn’t want to attend a match where you may bump into MS Dhoni, Sachin Tendulkar, Rahul Dravid or Sourav Ganguly at any of the dinners or VIP rooms. Owners can get their kid’s pictures taken with superstars, who may also attend their family birthdays, weddings, or mehendi. We all know why most of them do it. It is an expensive toy that can be flaunted.
So, talking of the worth of a franchise, unless one of the original ones in IPL actually completes a stake sale, will we know the real price. That might sound like a party-pooper, but it is the reality.
The franchise owners of the ISL to run from September to December are:
Bengaluru: Sun Group owned by media and aviation baron Kalanidhi Maran
Delhi: Den Network, owned by Sameer Manchanda, with interest in TV networks distribution
Goa: Venugopal Dhoot of Videocon, mining magnates Dattaraj Salgaocar and Shrinivas V Dempo
Guwahati: Actor John Abraham and soccer club Shillong Lajong
Kochi: PVP Ventures, owned by Prasad
Kolkata: Real estate baron
Mumbai: Chartered accountant Bimal
Pune: Salman Khan with real estate
Indian football has had its own share of crises. They have originally had competitions like Durand Cup, Rovers Cup, the IFA Shield and various leagues in centres like Kolkata, Goa, Kerala, and so on. The Federation Cup, set up in 1977, was an annual all-India club competition, knock-out style. And then, a National Football League started in 1997, but that folded up in 2007 and it gave way to I-League, and now we have the Indian Super League. To be honest, the All India Football Federation (AIFF) would first need to educate fans and people at large about their structure, and what the future path would be.
The questions that need answers are: Will the AIFF tournaments continue to have the same prominence? And, what happens to the various competitions that exist now and how will they change?
A professionally run league will do wonders for Indian football, and backed by a TV channel, it will also bring in viewers. But then past leagues have also had TV channels like Zee and Ten Sports backing them. So, how will this new venture be different? Foreign players? But wasn’t there always a provision to have them, as we have had players from Africa, Brazil and even Iran in the past.
So, what now? Will legends, who are now past their prime or have retired and become coaches, or are stars in the twilight of their careers, be able to lure sponsors and viewers? That may or may not happen.
The new ISL is said to have three main stakeholders apart from the franchises — the Star India TV Network, which seems to be making inroads into every sport in India; the Mukesh Ambani-owned Reliance Industries which owns IMG-R, and the IMG-Worldwide, who will conduct the event. What exactly will be their role and how much say will the teams have in the running of the ISL? How will the franchise recoup their money? Some potential buyers of franchises are said to have backed out because they were not confident of costs being recovered.
An expense of $5-6 million a year (around Rs 30-36 crore) including the cost of franchise fee and the cost of players and conduct, is no big deal for most of the people buying these franchises right now. But will they be happy simply spending the money on an ‘expensive’ toy without looking at returns?
Maybe those questions will be answered and ironed out over the next few months.
If IMG chairman Mike Dolan’s views are anything to go by, the event is to be marketed aggressively. He also sees the possibility of raising the number of teams to as many as 20.
Does that mean it will lure away sponsors of existing football events in India? If yes, then what happens to those events?
Then the big question: What will happen to I-League and how will the owners of clubs in I-League react to franchises, some of which are in the very centre they operate from?
Plus, does Indian football have the bandwidth to support 20 franchises? Are there enough quality players? These and many other questions will appear on the horizon over the next few months.
The IPL apart, if one were to look at any of the other sports that have had leagues, only hockey seems to have a decent foothold. So, only time will tell how far the ISL will go.