When the first-ever Indian Super League (ISL) match kicks off tomorrow in Kolkata, team owners and corporates will closely watch India’s glitzy new football tournament to gauge its business potential.
Owners of the eight city teams that make up the league include a mix of Bollywood stars, Indian business tycoons and top cricketers.
ISL “is going to ignite the passion for football amongst the people of India”, says Amit Wadhwa, the senior vice-president at Dentsu Creative Impact, an advertising agency working with the Delhi Dynamos ISL team, in a creative and strategy capacity. “And according to me, passion for football will be directly proportional to business, sponsorship potential of the sport. Football is a sport threatening to become big in India for sometime now, but now with the Indian Super League I feel that the time has come, finally.”
Football has been growing in popularity in recent years in India, as European league matches are increasingly being broadcast on India’s sports channels. Asian nations’ participation in Fifa has also been on the rise, which is making India look at football more seriously.
In a country where cricket is by far the most-popular and lucrative sport, there are challenges, however, heightening the risk for such a venture. These include the country’s limited football infrastructure, with little investment having gone into the sport over the years.
The new league has been set up by IMG Reliance – a joint venture between IMG Worldwide, a sports entertainment company headquartered in the United States, and the Indian conglomerate Reliance Industries – along with the TV network Star India, and the All-India Football Federation.
There has already been a great deal of hype surrounding the ISL ahead of its first three-month long season, with a number of high-profile names linked to the tournament. Mumbai City FC, which is playing against Atlético de Kolkata tomorrow, has signed renowned players such as the former Arsenal star Freddie Ljungberg and French striker Nicolas Anelka, who will play alongside Indian footballers. FC Goa has signed up Robert Pires, a French footballer best known for having played for Arsenal.
The franchise for Mumbai City FC is owned by Ranbir Kapoor, a popular Bollywood actor. The Kerala Blasters team is owned by the former Indian cricketer Sachin Tendulkar and Prasad V Potluri, an Indian investor and entrepreneur.
The winning bidders paid about US$25 million for each 10-year franchise, meaning that the eight franchises totalled $200m.
Ritesh Nath is the general manager of Cornerstone Sport and Entertainment, a Mumbai-based agency which represents sports stars including the cricketer Virat Kohli, who co-owns the Goa ISL team, and India’s football captain, Sunil Chhetri. Making football more commercial in India and bringing in corporate funds is exactly what is needed, Mr Nath says.
“In order for us to grow the sport in India, we need corporate backing,” he says. “We need sponsors to come on board to support the teams, to support the stadiums, to develop the infrastructure.”
The ISL signed a partnership with the English Premier League to allow it to tap its expertise in creating a football competition. This bodes well for the new tournament, given that the Premier League is the most-watched league in the world and has some of the biggest sponsorship deals. Revenues for clubs in the Premier League in the financial year 2012 to 2013 reached more than £2.5 billion (Dh14.86bn), according to Deloitte.
There have been similar efforts recently to set up football leagues in countries such as Australia with varying degrees of success. But the ISL is differentiating itself by using a mix of foreign star players and developing local talent, which could help it succeed, Mr Nath says.
Major League Soccer (MLS) was launched in the US in 1996 and struggled for years, losing millions of dollars, as teams played in near-empty American football stadiums. But owners then invested in purpose-built venues, more teams came into the competition, and the league is now profitable.
India’s other football league, the I-League, has been unable to enjoy success because of a lack of funding and factors such as limited coverage on television.
“The reason why the I-League has not done so well is purely because of [a lack of] packaging and corporates backing football as a sport in India at the grass root level,” Mr Nath says. “Football has never really been part of a private organisation; football has always been run at a state level.”
Star India is broadcasting the ISL matches across eight channels in five languages. Such coverage “has never seen before in a league sport in India”, says Mr Nath.
Sanjay Gupta, the chief operating officer of Star India, says that the ISL “heralds the birth of India as a footballing nation”.
“We believe in the potential of football as a sport that cuts across culture, race, religion and economic might,” he adds.
These factors are likely to help to attract sponsors. Hero Motocorp, an Indian motorcycle and scooter manufacturer, is the title sponsor of the ISL, for a fee of about 200 million rupees (Dh12m) a year, according to industry estimates cited by Business Standard, a Indian financial newspaper.
“Brands are looking at opportunities for a real and meaningful interaction opportunity with the youth of India and what better than the sport of football?” says Mr Wadwha. “They have lapped up English Premier League, La Liga and the World Cup recently. If the quality of the sport is good, which ISL promises to provide, there is no reason why the brands will not have an option beyond cricket and Bollywood.”
Ozone Group, a Bangalore-based property company, is the title sponsor of Chennaiyin FC, an ISL team which is owned by the Bollywood actor Abhishek Bachan and cricketer Mahendra Singh Dhoni.
“ISL happened to be a opportunity,” says Srinivasan Gopalan, the chief executive of Ozone Group. “Chennai is the place which actually gave Ozone its large project called Metrozone. We have actually been doing a grass roots programme in Bangalore for the past five years for all those children who cannot afford it, to promote football. So it was a very logical decision for us.”
He adds that the company was attracted by the “glamour” brought by the celebrities investing in league.
“We believe that there will be a lot of mileage given to ISL.”
The league has not been without its setbacks. The launch date of the competition was pushed back and the Indian conglomerate Sun Group, which had bought the Bangalore franchise, backed out in August, amid reports of disagreements with the organisers. Chennai’s team then came in to replace the Bangalore franchise.
Many will compare the new football league to the Indian Premier League (IPL) cricket competition which was launched in 2008.
IPL teams have struggled to reach profitability, but the money invested by owners was significantly higher with India’s UB Group buying the IPL team Royal Challengers Bangalore for an estimated $112m.
“Because the economic entry barriers to the ISL were a lot lower, I foresee the teams recovering their money breaking even a lot quicker than the IPL,” says Mr Nath.
He is optimistic about the potential of the ISL, estimating that teams could break even within five years.
“I think the business model is pretty spot on,” Mr Nath says. “I think it’s only set to grow. It’s at a very nascent stage right now.”
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