WHO are the bulge bracket heavies in Indian sport? How much money did they control, generate and manage? What did their money power achieve in 2008? The action of these entities changed the landscape of the area they operate in. The SportzPower Money List 2008 records and ranks these movers and shakers whose enormous financial clout influenced the way sports is run, making a mark also in the international arena.
The Board of Control of Cricket in India (BCCI), with its immense money power leads the rankings, followed by UB’s head honcho Vijay Mallya for the growing swathe in the world of sport. In fact he has made gigantic strides in 2008, but sadly for VJM, not all were necessarily successful. That is why the BCCI is the numero uno in our SportzPower Money List 2008. The BCCI has ensured that India remains the epicentre of the game – commercially and cricketwise – as it spreads it power tentacles across the length and breadth of the cricket world. The fight for the remaining eight places in the Top 10 was equally tough. We have examined these names and ranked them on the sheer width and depth of their monetary prowess and acumen.
The Top 10, in order of ranking, are – BCCI; Vijay Mallya; Subhash Chandra; Sony Entertainment Television; Shahrukh Khan; ESPN-Star Sports; Harish Thawani; Emerging Media; Cyrus Poonawala; Mukesh Ambani.
1. BCCI
Winner hands down for being arguably the most dominant sports body in the world. In many ways the ICC has become an appendage of the BCCI while it should be the other way round. Twice over the recent past, the BCCI has shown who is super boss to the rest of the cricketing world – over the Mike Denness affair in South Africa when aspersions were cast over the conduct of key Indian players, including Sachin Tendulkar. And more recently in the infamous Monkeygate episode featuring Harbhajan Singh and Andrew Symonds.
Using its gargantuan money clout, it has closed ranks against all interlopers. If the Aussies and Englishmen fear a great divide in world cricket, it is primarily due to the BCCI’s ability to generate big bucks. To bring an unwilling England cricket team back to India after the dastardly 26/11 terrorist attacks on Mumbai was once again testimony to its rising stature in the cricket sweepstakes.
And by structuring the Indian Premier League, it has managed to redefine frontiers not just for itself, but for cricket administrators worldwide. With Sharad Pawar giving way to Shashank Manohar, Indian cricket seems to be ensconced in safe hands.
Bean Counter
BCCI earned Rs 3.0315 billion profit on revenues of Rs 10.0014 billion for 2007-08, making it one of the richest sports bodies in the world. Of its revenues, as much as Rs 5.5931 billion came from the sale of media rights in 2007-08.
Innovative marketing and creation of properties has been the BCCI’s hallmark lately. In 2008 – sale of T20 Champions League rights to ESPN-Star for 10 years for a blinding $ 975 million came close on the heels of selling media rights of the IPL for 10 years to a consortium of Sony Entertainment Television-World Sport Group for a colossal $ 1.26 billion (Sony-WSG’s actual payout commitment over ten years is $ 918 million; the remainder being marketing and promotion cost projections).
Other noteworthy sponsorship deals were IPL teams sale for $ 723.6 million, IPL title and ground sponsorship to DLF for Rs 2 billion for five years and web media rights to Live Current Media for $ 50 million. In 2007-08, BCCI’s profit of Rs 3.0314 billion was much higher than the Rs 2.35 billion it garnered in 2006-07, and this is after paying off all the staging associations and upgrading infrastructure around the country.
2. VIJAY MALLYA
The larger than life persona of VJM was much in evidence in the world of sport right through the year. Armed with his cheque book, VJM was on a veritable buying spree. And he was agnostic about sport, spreading the cash around on cricket, motorsport, soccer and horse racing.
Royal No-challenge
He purchased the Bangalore Royal Challengers IPL franchise for $ 111.6 million. That most of the money spent didn’t pay dividends in spades angered him, but one cannot accuse him for lack of trying. His franchise showed a net loss of Rs 450 million at the end of season 1. He was the biggest loser with revenues (BCCI, SET Max, team sponsorships, gate receipts) of Rs 500 million and expenses of Rs 950 million (franchise fee, player and team fees, advertising, promotion and administration cost). A furious Mallya scaked his CEO Charu Sharma, was angry with skipper Rahul Dravid for selecting the wrong team and generally badmouthed his entire operation.
F1 Ambitions
However, year 2008 will be remembered for yet another achievement by Mallya. He bought the Spyker Formula 1 team in a consortium with Dutch Mol family for $109 million. And towards the end of the year was in the news as being in the hunt for the beleaguered Honda F1 team as well.
Mallya had earlier been one of the sponsors for the Benetton F1 and Panasonic Toyota F1 teams and has had a car racing bee forever in his bonnet. As a young man, VJM would race in Barrackpore near Kolkata and was a regular at the Colombo and Macau circuits. He became involved in a racing club run by British expats and drove the Triumph Herald, Porsche 911 and even a Grand Prix car built by Morris Nunn’s Ensign team. Mallya owns as many as 260 cars and is passionate about fast cars.
As part of his grand plan to bring F1 to India in 2011, Mallya consolidated his hold on motor sport in the land by becoming chairman of FMSCI in 2008 to modernise and develop motorsport in a systematic manner.
Soccer On His Script
He continues to actively sponsor two of India’s top football clubs – East Bengal and Mohun Bagan. Now there is talk, though unconfirmed, that he is one of the investors, along with F1 biggies Bernie Ecclestone and Flavio Briatore and India’s very own steel baron LN Mittal, in English soccer club Queens Park Rangers.
Horse Proud
Of course one cannot forget Mallya’s obsession with horses. His success began at the young age of 21 when Danish Lad became a winner. He then purchased the historic Kunnigal Stud Farm and turned it into the United Racing and Bloodstock Breeders with the best trainers, jockeys and animals. He has won the prestigious Indian Derby four times and remains one of India’s biggest horse race owners. He beat back Diageo’s bid to sponsor the Indian Derby for five years in 2007. The Rs 150 deal was a hard fought one as it came after Mallya was king of RWITC Indian Derby for almost 20 years.
The Force may not be with him yet (Force India is what he calls his F1 team), but VJM is not one to give up so easily. Expect him to do the unexpected this year. He has already placed several of his players in the IPL trading window.
3. SUBHASH CHANDRA
For sheer audacity and nerve, trust Subhash Chandra to think out of the box. Hurt over the BCCI not giving him the telecast rights, he decided to strike back. In typical SC style, he created an international cricket league. Christened Indian Cricket League, Chandra rocked India’s somnolent cricket administrators by tying up with IL &FS and investing Rs 2 billion.
Lalit Modi will disagree, but the reality is that Chandra first put up an international Twenty20 cricket league in India and the BCCI had no option but to follow. That Modi and the BCCI negated his first mover advantage is why BCCI is number one and Chandra three on this list. Chandra has fought BCCI tooth and nail and even got the crowds coming in to see what can only be described as high quality cricket, but has not managed to get the eyeballs on telly. IPL, meanwhile was a huge success. Chandra even invested Rs 300 million on some of the key international players – Brian Lara, Inzamam ul Haq, Lance Kluesner, Craig McMillan and then forked out Rs 1.6 million plus for domestic players, improving their lot and forcing BCCI to hike payments for Ranji and other tourneys.
He is also credited with the setting up of a domestic football league and also owns his own football club – Mumbai FC.
Chandra, always entrepreneurial and ambitious, owns two sports channels – Zee and Ten – and has telecast rights for four cricket boards – Sri Lanka, Bangladesh, Pakistan and West Indies.
With Rs 40 million as prize money, Chandra put the ball in BCCI’s court and they have responded positively. Now the problem is that ICL only has a Rs 200 million advertising/promotion expenditure while IPL is spending Rs 1.8 billion (BCCI Rs 400 million, SET Rs 450 million, Franchisee Rs 95 million). Combative Chandra even roped in a Bangladesh team for last year’s edition.
This year, expect more innovativeness.
4. SONY ENTERTAINMENT TELEVISION
This was the floundering Sony’s big punt and it worked. Carping critics said it won’t work for nobody would watch cricketers playing their hearts out for a franchise. Strangely, sub tribal loyalties worked instead of jingoistic ones. There was no nationalistic feeling, no state or city pull at your heart strings and yet the club model worked in India. It was a throwback to hysteria generated by the troika of football clubs in Kolkata – Mohun Bagan, East Bengal and Mohommedan Sporting – till the inhabitants of the city of joy saw World Cup khela and realised that the real thing was far removed from the fare that they were used to.
When the WSG-SET consortium paid $918 million for the IPL telecast rights, the world thought that Kunal Dasgupta and company had gone mad. TRPs went through the roof, Brendon McCullam’s blinder took the television audiences into a different orbit and the tourney never looked back. This was Sony’s big gamble and it paid handsomely. Max revenues from the 45 days was a dizzy Rs 3.05 billion and the TRPs incalcuable and intangible. Cricket all dressed up was back with a bang and the concept of cricentertainment working like clockwork.
5. SHAHRUKH KHAN
The megastar with a overpowering mega brand went hell for leather as he bid for an IPL franchise, bagging Kolkata, calling it Kolkata Knight Riders in conjunction with star Juhi Chawla and her husband Jai Mehta. KKR may not have done as well as Rajasthan Royals or Chennai Superkings, but for sheer chutzpah and marketing gimmickry, SRK was the meister. And guess what, he made a profit in year one. Paying a franchise fee of Rs 3 billion ($75.09 mn),
SRK and his money managers ran a tight ship making a net profit of Rs 80 million, the best of the eight franchise owners. With revenues of Rs 890 million, and expenses of Rs 810 million, SRK was laughing all the way to the bank.
Displaying his well known high energy levels, SRK showed his more famous business leader rivals how to run a cricket franchise. Ness Wadia, Mohit Burman, Priety Zinta owned Punjab Kings XI lost Rs 34 million, N Srinivasan India Cements owned Chennai Superkings lost Rs 50 million, GMR owned Delhi Daredevils lost Rs 80 million, Deccan Chronicle owned Deccan Chargers lost Rs 200 million, while Mukesh Ambani owned Mumbai Indians showed a net loss of Rs 210 million.
Maybe that is why Shahrukh Khan is known as Khan Market (a tony shopping address in Delhi) for he rewrites the rules of marketing.
6. ESPN STAR SPORTS
Sony’s success made Rupert Murdoch see red. Why did ESPN Star Sports not bid aggressively for this property, must have been Murdoch’s question to the board? For the twin objectives of gangbuster TRPs and revenues were achieved by Max’s cricentertainment push.
So, Murdoch did the next best thing. When Lalit Modi put the rights of T20 Champions League on the block, ESS went for broke, coughing up an astronomical $975 million for the League for the rights (the next highest bid was $751.3 million from the Sony-WSG Dubai Investment Council consortium).
Now remember the IPL was a 45 day tournament, while the C league is for a week, so if one does a cost benefit analysis; Murdoch and Co had paid an awesome amount of money. The irony was that the tragic terror attacks of 26/11 meant that the event had to be postponed after a phenomenal build up of this unique tournament featuring the best of breed teams from around the world. With the ICC Champions Trophy also cancelled due to security concerns after the Marriott bombing in Pakistan, it was a double whammy for ESS in 2008. Yet we have given it number six slot for audacious opportunity seeking even though it could not be monetised.
7. HARISH THAWANI
Finally pay day for Thawani in 2008-09. Did he overbid when he committed to pay $612 million for BCCI’s cable, broadband and DTH rights in February 2006? For most part, the answer seemed in the affirmative. The four year deal between 1 March, 2006 and 31 March 2010 included 23 Tests and 55 one dayers, as also 72 days of domestic cricket. Year 2006-07, Nimbus Communications revenues were reportedly Rs 2.7 billion, but the ongoing season has been much better. With Australia and England touring India, Nimbus projections are that they will do Rs 6 billion this year. Against Australia, Nimbus did revenues of Rs 1.1 billion, while till the end of the England tour, inventory reportedly worth Rs 3.1 billion had been sold.
The question that keeps cropping up though, is how will the numbers add up? A noteworthy point here is that there have been mark downs in Nimbus’ payments as a result of the controversy over feed share to DD and the national interest clause, as too the matter of the pubcaster’s unencrypted feed resulting in territorial overshoots in terms of DD’s coverage area.
So despite all the issues with DD and problems such as those with with DTH carrier Dish TV, Thawani has managed to keep his businesses going, which is what counts in the end tally.
The high level of interest in the series with Australia and the one dayers against England have ensured good revenue flows. But India next travels to New Zealand and then West Indies, followed by the T20 World Cup. Thawani doesn’t have the rights to any of this. But with the Pakistan tour having been cancelled, Sachin Tendulkar’s presence in the ongoing Ranji final will be a boon.
8. EMERGING MEDIA, OWNER OF RAJASTHAN ROYALS FRANCHISE
Mukesh Ambani may have paid the most to get a franchise – Rs 4.48 billion – but the owners of Rajasthan Royals paid the least (Rs 2.68 billion) and made a net profit of Rs 50 million in year 1. A band of savvy investors including Rupert Murdoch’s estranged son Lachlan along with co founder and managing partner of Blenheim Chalcot investment group for fast growth ventures Manoj Badale and Lalit Modi’s brother-in-law Suresh Chellaram and Aditya Chellaram, bought the cheapest franchise and turned the no hopers into champions.
Badale also runs the state of the art Cricket Star academy in Jaipur where the English tourists acclimatised under Greg Chappell’s supervision. With a charismatic captain and coach in Shane Warne, high performance coach in Jeremy Snape and physio in John Gloster, the team swept all before them to take the winner’s purse of $ 1.2 million. Interestingly another franchise owner Mohit Burman of Punjab Kings XI’s brother Gaurav is Lalit Modi’s step son-in-law.
9. CYRUS POONAWALA
Vijay Mallya hates losing. But if there is one man who has tailed him in the horse racing arena over the years, it is the flamboyant cigar smoking Pune breeder Cyrus Poonawala. Poonawala beat Mallya in the prestigious RWITC elections and became chairman. Then Diageo owner of the blue riband Johnny Walker brand decided to counter Mallya for the sponsorship of the Indian Derby. Though Mallya won and his Rs 150 million over 5 year sponsorship deal will improve the infrastructure at the Mumbai and Pune race courses, he will be smarting.
Poonawala, a successful businessman with a large swathe in the world of vaccines is one of India’s pre eminent horse owners and breeders. Cyrus and his brother Zavary own the Poonawala Stud Farms in Pune – a 350 acre swank entity which houses 400 of the best horses. The Farms are replete with large tracks, paddocks, aqua tread mills and motorised horse walkers. Poonawala has won six champion breeder awards, 288 Classic winners including 8 Indian Derbies (including five in a row between 1988 and 1992) and 59 Indian Classics. One of the highest stake earners, 213 of his home breds have reportedly won in excess of Rs 1 million. His stud Mystical won recently in Dubai and the Poonawala Breeders Million is one of the fabled races in the Indian race calendar.
10. MUKESH AMBANI
Mukesh Ambani’s Reliance Industries purchased the most expensive franchise – Mumbai Indians – for Rs 4.48 billion. With marquee names like Sachin Tendulkar, Sanath Jaisurya and Shaun Pollock, here was a team which was expected to go right to the top. Unfortunately it didn’t despite RIL’s marketing push. With revenues of Rs 700 million in year one and expenses of Rs 910 million, Ambani lost Rs 210 million. But that will not deter him.
With the trading window having been thrown open and a fit Sachin available for the entire tournament in season 2, the Mumbai Indians will be a handful for the other competitors. At Rs 4.48 billion for 10 years, Ambani has invested a mere Rs 448 million per year on his franchise which is peanuts for a man who earns Rs 10 million every minute. Ambani, like Mallya, despises defeat, so expect a much better performance this year. With wife Nita by his side, both will be visible in balconies at various venues.
Honourable Mention: Real estate tycoon KP Singh just missed out on coming on to this list. Because his model of taking up the IPL title sponsorship has proved more cost effective in terms of bigger bang for the buck and without all the hassles that come with being a promoter. KP Singh’s DLF committed Rs 2 billion to become the official title and ground sponsor of the IPL for a period of 5 years. Which means DLF has paid Rs 400 million per year for the entire ball of wax. As the title sponsor, DLF gets all title rights and therein probably lies the rub.
