NEW DELHI: FC Basel Holding AG announced on Wednesday it is taking a minority stake (emphasis ours) in Chennai City FC (CCFC).
According to the deal, FC Basel Holding AG will acquire a 26% stake in the I-League club and will see the Swiss club lend technical expertise and knowledge to their Indian counterparts.
The announcement clarifies and corrects news put out by The Fan Garage that the club, with a history of 125 years and the second most successful club in the Alpine country’s top division Swiss Super League with 20 titles, was taking a majority stake in the current I-League table-toppers.
It bears noting that a follow up report to the TFG article published by Times of India had put the shareholding being acquired by FC Basel 1893 in CCFC as 35%, and that it was paying €20 million for its minority stake.
TOI missed a trick on both the stake quantum and the price paid for said stake. That has been corroborated by FC Basel, which while not not disclosing the amount they are about to invest in CCFC, disputed the €15 million figure made in the TFG article.
If TFG’s €15 million figure for a majority stake is wrong, TOI’s €20 million number for a 35% stake is totally off the mark, SportzPower is convinced.
Why? The most recent sports franchise M&A where the numbers were in the public domain was in March 2018. JSW Group took a 50% (51%?) stake in Indian Premier League team Delhi Dynamos (subsequently renamed to Delhi Capitals) for Rs 5.5 billion at an enterprise valuation of Rs 11 billion.
If an established IPL team has been valued at Rs 11 billion a little under a year ago, there is just no way that ANY I-League team, let alone a new entrant like CCFC, could have an enterprise valuation of Rs 4.65 billion (€57 million), which is what we get if a 35% stake in the club went for €20 million.
Coming back to Basel FC’s strategic partnership with the I-League club from a city of seven million. It is “focused on joint training of talent, close cooperation in the area of scouting as well as the development and expansion of junior academies in Southern India,” according to an official release.
“Furthermore, the club made a clear financial commitment, offering interesting opportunities for the future. So FCB, thanks to its stake in CCFC, will benefit from the future proceeds of the club. Its stake is managed via FC Basel Holding AG,” the release further states.
Chennai City FC, founded in 1946, is managed by the young management duo of Rohit Ramesh (president, majority owner) and Krishna Kumar Raghavan (CFO, shareholder). Together with the ISL whose playing season lasts only three months, the I-League is the pinnacle of Indian professional football. As of now, only I-League winners can qualify annually for participation in the AFC Champions League. In the medium term, football’s world governing body FIFA will merge the two leagues.
Massimo Ceccaroni, head of youth development of FC Basel 1893, is closely involved with this partnership. His many years of experience and professional skills will be used to build up the planned CCFC junior academy to the appropriate level of quality and drive it forward. At CCFC in India, they also have the proven so-called dual training system, i.e. close links between school and football.
FCB president, Bernhard Burgener, is very pleased about the creation of this partnership with Chennai City FC: “I’m delighted that FC Basel is the first European club to have the opportunity to participate in an Indian club. The intensive exchange of ideas with the club manager for the CCFC won us over. The priority for us is providing support for new talent. We also see great development potential in Indian football in general.”
Roland Heri, CEO FCB, is also enthusiastic about the commitment in India: “It will be very exciting to help train the best young footballers from this area.”
The club management of Chennai City FC has an extremely positive attitude towards cooperation with FC Basel 1893, as Rohit Ramesh and Krishna Kumar Raghavan firmly state: “We are very pleased about this agreement and trust-based partnership with FCB. We – and perhaps Indian football itself – will benefit in a wide variety of areas from the great national and international experience of this top Swiss club. In particular, we consider its outstanding work with young talent, and the fostering of internationally acclaimed careers, to be very positive for future cooperation and joint projects.”
The partnership was officially announced at a media conference in the capital on Wednesday. Present at the media conference were the top brass of the All India Football Federation (AIFF), I-League CEO Sunando Dhar, as well as representatives of CCFC and FCB.
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