MUMBAI: Bengaluru FC owner Parth Jindal has raised the alarm over what he claims are continued operating losses that Hero Indian Super League franchises are having to bear in a letter to league founder and chairperson Nita Ambani, seeking her “counsel and guidance on this matter”.
In the letter, accessed by The Indian Express, Jindal said it was becoming “very difficult for Bengaluru FC and JSW Sports to justify and sustain the losses being incurred”.
The daily reports that Jindal has put the losses incurred as being in excess of Rs 250 million every season and has raised concerns over the “fragile financial condition” of the country’s premier league.
In the letter, Jindal wrote that the “losses increased dramatically” during the COVID-19 pandemic because of lack of ticketing revenue, loss of sponsorship and the additional cost of maintaining the bio-bubble. Further, Reliance Foundation suspending the youth subsidy (of up to Rs 20 million) to teams has been a “severe blow”, according to Jindal.
“Not having ticket revenue, losing out on sponsorships as well as the additional costs due to maintaining the COVID bubble have resulted in losses increasing dramatically. Since we have joint (sic) the ISL we have been losing in excess of Rs 25 crores (Rs 250 million) every season and this season the numbers are even worse,” Jindal wrote.
Jindal added: “It might be prudent for franchise owners and league organisers to chart out the future path to commercial sustainability. Today, I am not aware how franchises like BFC will become profitable or even break even and would love to deliberate and understand along with the other team owners what the future holds.”
It bears noting Bengaluru FC is a relatively more recent entrant into the league, having moved up into the ISL in 2017 from the Hero I-League.
The 2021 season of the ISL started on November 20 and is being played in a biosecure bubble in Goa.
For the record, Ambani launched the ISL in 2014, in partnership with Star Sports (current equity split is Reliance Industries Ltd 65% and Star Sports parent Disney India 35%). A broadcaster also being the league’s co-owner has often been raised as a pain point when the matter of P&Ls are discussed. As the Indian Express report notes, while the main source of income for football clubs around the world is from the revenue generated by selling television rights of the league, that has not been the case for the ISL. “In absence of TV revenue, there are few sources of income for the teams” is a point the daily raises. What IE fails to note, however, is that each franchise is compensated in the region of Rs150-180 million in lieu of the media rights income, so it is not quite correct to say it is a zero sum game as far as that aspect of revenue share is concerned. One could of course argue that due to a broadcaster being a co-owner, “true rights value” is NOT being garnered but that is a point of debate rather than a statement of fact, at least in the specific case of the ISL.
Bengaluru FC has been a trailblazer of sorts in Indian football. The team, which has in its ranks several national team players, including captain Sunil Chhetri, has won the erstwhile I-League twice and lifted the ISL trophy in 2017-18.
