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New roadmap for Indian football seeks to lead ISL, I-League clubs to financial stability

(Image Credit: ISL website)

  • For the 2019-20 season, the ISL becomes the top tier of Indian football, replacing the I-League, now the second division
  • The ISL has brought a whole new dimension to Indian club football, be it television coverage, marketing, matchday operations and much more
  • However, broadcasting revenue is still a problem

The 2014 launch of the Indian Super League rewrote the rulebook for football in the country, its first-year average attendance of over 24,000 – instantly making it the fourth most-watched league in the world at the time – proving an audience existed.

But the IPL-inspired, franchise-based league has always sat uneasily alongside its predecessor, the more traditionally-organised I-League and – despite its fans – has struggled to bring its clubs and owners into profitability.

In October, the All India Football Federation and the Asian Football Confederation presented Indian football stakeholders with a five-year roadmap that aims to untangle some of these thorny issues.

From 2019-20, the ISL will formally become the top tier of Indian football, pushing the I-League into second-tier status. At the end of the 2020-21 season, two I-League teams will be offered entry into the ISL, taking it to 12 teams.

Eventually, following the 2024-25 season, there will be true promotion and relegation between the two.

ISL v I-League

I-League clubs have known for some time they were going to become second-tier teams. But that didn’t make the downgrade, and the loss of their AFC Champions League place to the ISL, any easier to accept.

“I could never be happy about being relegated to the second division for something outside sporting merit,” says Punjab FC owner Ranjit Bajaj. “The richest people in India have been able to get into the top league because they are rich and even if we are good enough to play with them, we still deserve to be in the second division. Why?”

Money plays a big part. The I-League was launched in 2007, following on from the National Football League, with broadcaster Zee Sports on board. The relationship soon turned rocky: Zee found a worrying lack of interest in advertising, while the football fraternity was concerned the broadcaster wasn’t promoting the league enough.

An enticing solution was offered by IMG-Reliance, a collaboration between global agency IMG and Reliance, an Indian conglomerate engaged in energy, petrochemicals, textiles, natural resources, retail, and telecoms. In 2010, the AIFF signed a 15-year agreement worth around $97.5m (€88.1m) that made IMG-Reliance its commercial partner.

“The AIFF was offered an unheard-of figure by IMG-Reliance,” says Indian sport consultant Arunava Chaudhuri. “So, they grabbed the opportunity in 2010 and sold all their rights in a package to IMG-R with their focus on league football, and they came up with the idea of the ISL.”

(Image Credit: I-League website)

In 2014, eight new franchises were acquired by a combination of business tycoons, cricket legends, Bollywood stars and European clubs. Famous, if ageing, names – Alessandro Del Piero, Robert Pires, Freddie Ljungberg and more – arrived from Europe to play. All the matches were broadcast live, and the league quickly built a major media presence.

The I-League, meanwhile, was struggling for fans, money and exposure.

“The ISL has brought a whole new dimension to Indian club football, if people like it or not, be it television coverage, marketing, matchday operations and much more,” says Chaudhuri. “Even the I-League has improved substantially because clubs saw what the ISL franchises were doing. Everything off field is much better organised today.”

Financial losses

All ISL matches are shown by pay-television broadcaster Star Sports. The Mumbai-based broadcaster owns 35 per cent of the ISL and has worked hard to promote the league over the years: the 2019 season opener between Kerala Blasters and ATK of Kolkata saw a TV rating of 1.2 per cent in urban areas, a 96-per-cent year-on-year increase.

But the broadcaster’s close involvement with the league also cuts off a major source of income.

While details are strictly guarded, Indian football insiders say that Star Sports’ guaranteed coverage and marketing efforts take the place of any direct payments to the league’s central revenue pool, which is shared among the clubs after organizer Football Sports Development Limited has taken a 20-per-cent cut.

“There lies the problem of Indian club football,” says Chaudhari, who pointed out that the ISL wanted to ensure that the problems of Zee Sports and the old I-League would not be replicated, demanding coverage of both quantity and quality. “That, Star Sports has guaranteed, but now the question is: how can you get a bidding war for the television rights? Only then could clubs become profitable.”

ISL clubs are feeling the pinch. In August, a new consortium headed by IT entrepreneur Vijay Madduri took over struggling ISL team Pune City and moved it to Hyderabad. In the same month, Delhi Dynamos moved to Bhubaneshwar, 1,276km to the southeast, and renamed themselves Odisha FC, leaving the capital without a team.

“The ground reality of Indian football today is that every single member of Indian football is losing money. And everybody is losing money hand over fist,” said Bengaluru FC chief executive Parth Jindal earlier this year. “[And] ISL teams are losing far more money than I-League teams.”

(Photo by: ISL)

Bengaluru FC’s costs almost doubled to $9m in 2017 when the club left the I-League to join the ISL. It paid $2.08m to do so. Jindal hopes that it will be worth it in the end. “The ISL organisers’ view is that if you want to come into ISL, there’s a cost involved, because they are trying to do things in a much bigger and more professional way,” explained Jindal. Bengaluru was the only team in the 2017-18 season not to lose money.

Average losses in the ISL’s first season were about $5.5m, though that year there were no payouts from the central pool as money was needed to improve infrastructure and facilities around the league, with that figure dropping to around $3.3 million in 2017-18.

While the revenue from the central pool is growing, with clubs receiving around $1.35 million each in 2018, it is still short of the $1.67 m paid out in franchise fees. Sponsorship can make a difference, though results vary from club to club. North East United, one of the smaller franchises, brought in around $950,000 in the 2017-18 season, as opposed to Bengaluru’s estimated $5m-$6m. Bengaluru signed a four-year deal with Kia Motors, rumoured to be worth around $7m, in October 2018.

The development of a transfer system has been earmarked by the FSDL as a priority. In February 2018, Bengaluru sold Spanish winger Edu García to Chinese Super League team Zhejiang Lucheng, becoming the first Indian football team to receive a transfer fee (which was undisclosed).

Balancing legacy and economy

The latest standoff is between the ISL and two of the I-League’s biggest clubs.

Kolkata rivals East Bengal and Mohun Bagan are two of the oldest and biggest in Asia, their derby matches capable of attracting 100,000 fans. That is why the ISL wants them in now, and why the two clubs think they should be exempt the standard entrance fee of $2.08m.

Prominent journalists have advised the clubs to hold firm, arguing the ISL needs the pair more than the pair need the ISL, but stances may be softening. “We have objected to this franchise fee from day one,” says East Bengal spokesperson Gautam Roy. “But if things don’t work out then maybe we have no other option. All our fans and members are very keen to enter the ISL and we have to admit that the ISL has brought a new fervor to Indian football.”

Other I-League clubs have no such intention even if they have the funds. Bajaj says Punjab FC – known as Minerva Punjab until October – is not interested in buying a place in the new top tier.

“I don’t know why they [Mohun Bagan and East Bengal] need to pay,” he adds. “If they win the league in three years, they will get the same spot for paying nothing. We will only join ISL on sporting merit. We want to invest to produce players and improve our infrastructure instead of paying it to a league where it goes to a private company that is not going to spend the money on Indian football.”

There is a lot of money being spent in Indian football at the moment. If the roadmap is successful then there may even be some profit to show for it all in years to come.

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