football

Updated: Oct 20, 2019 10:33 IST

FC Pune City sacked manager Miguel Angel Portugal three games into the new Indian Super League (ISL) season. The club had started the campaign with a draw and two defeats and, despite Portugal being a new appointee, Pune City pressed the panic button early in the hope of salvaging their campaign. They couldn’t. In what turned out to be a turbulent season, Pune City finished seventh in the 10-team tournament.

Uncertainty off the pitch didn’t help players and the coaching staff at Pune City. Just weeks into 2018-19, their salaries started getting delayed. Last April, a senior player asked in a Whatsapp group that had as members the club’s players, coaches and officials: “Can someone please tell me when we are gonna get bloody paid?”

His message received a response from a club official: “Please understand, the club is certain to come out of the current crisis. They are working with the future investors to secure the club’s future for the next five years.”

That hope was belied. As ISL prepares to start its sixth season on Sunday, October 20, the club is history. A new outfit under new owners, based in Hyderabad, will replace it, ending Pune’s five-season association with the ISL.

So, what went wrong with FC Pune City? It had to do with the financial troubles of its owners, the Wadhawan Group. When Infrastructure Leasing and Financial Services (IL&FS) Ltd, a non-banking financial company (NBFC), crumbled last year, it triggered a major sector-wide crisis.

One of the worst hit was Dewan Housing Finance Corporation Ltd (DHFL), a company in the Wadhawan Group. After news of IL&FS’s loan defaults broke, DHFL’s stock crashed from ~679.25 (per NSE share) on September 3 to ~183.85 on October 25, 2018. By October 18 this year, it had fallen to ~21.45 a share. DHFL’s implosion left the Wadhawan Group and, consequently, FC Pune City, in deep distress. At the end of the 2018-19 ISL season, it had become clear that Pune City wouldn’t play another season.

It was a blow to the ISL, which has now replaced the I-League as India’s top football league.

Unlike the I-League, the ISL is structured as a “closed” tournament (no promotion or relegation), with clubs paying the private league’s parent company— Football Sports Development Limited (FSDL)—franchise fees. When the ISL was given the status of the top league, some concessions were made to this closed structure: For the 2020-21 season, two I-League clubs will be promoted to the ISL. From the 2022-23 season, the I-League winners have been promised promotion to the ISL. A full-fledged promotion-relegation system has also been promised from 2024/25.

The ISL and its FSDL did not respond to questions sent by email on Thursday and Friday and declined to comment on the phone.

The I-League has been left floundering by the All India Football Federation (AIFF)—not only is it not the top league anymore, it is also without a broadcaster this season; the AIFF has also not decided on the league’s fixtures, with barely a month left for its scheduled start.

“There has been no update on TV broadcast from AIFF,” said Rohit Ramesh, owner of I-League champions Chennai City FC.

“I hear some clubs are trying to find a broadcaster independently. There are no updates on fixtures as well. Logistically, we are in a soup.”

PUNE PANGS

Clubs in the I-League, which has been the national league since 1996 (with a rebranding in 2007), have in fact found it difficult to survive ever since the ISL’s introduction in 2014.

Pune is an important reference point here. The city has been a graveyard for prominent football clubs in recent years. Three I-League clubs—DSK Shivajians, Kalyani Bharat FC and, most notably, Pune FC—have shuttered over the past four years.

While Bharat FC lasted just a year in the I-League and DSK two, the Ashok Piramal Group-owned Pune FC exited after six seasons. A major force in the earlier half of the decade, Pune FC attributed its pull-out in 2015 to the lack of clarity in the future of India’s league structure.

The ISL was born out of an idea the All India Football Federation (AIFF) had agreed to as part of the 15-year, Rs.700- crore agreement it signed with IMG-Reliance. Reliance Industries are now the majority owners of FSDL with a 65% stake, with IMG having recently exited the body.

At the time this agreement was inked in December, 2010, the I-League had 14 clubs. Six were from Goa and Kolkata but there were teams from Mumbai, Bengaluru, Pune, Phagwara and Kozhikode as well. But the league did little to arouse corporate interest.

Managed by the AIFF, the demand that the I-League be run independently began growing once it emerged that there was a new kid on the block, one modelled on the T20 Indian Premier League. At the forefront of the call to make I-League a separate entity was Chirag Tanna, then head of operations at Pune FC.

When the ISL started in 2014, Tanna led an umbrella group of I-League clubs which, for a brief period, opposed what it felt was an attempt by IMG-Reliance to monopolise football in India.

“We have no grouse against the tournament. But nothing is being done for the I-League. We will not release or loan any player for their tournament and will also not take any IMG-Reliance contracted players,” Tanna told Pune Mirror in 2013.

Over time, the resistance eroded but so did a number of I-League clubs’ faith in the AIFF.

“It’s not an ideal situation. Things aren’t moving the way it’s supposed to,” Tanna told Bangalore Mirror in August, 2015, just prior to Pune FC’s decision to withdraw.

Weeks later, Tanna joined Reliance’s sports wing to oversee the ISL in an influential administrative role.

Like Pune FC, Royal Wahingdoh exited the I-League in 2015. Sporting Clube de Goa and Salgaocar followed in 2016. Dempo, the most successful club of the country in this century, turned down promotion into the I-League when they won the second division title in 2016. From 14 clubs in 2012-13, the I-League went down to nine teams in 2015-16.

A number of clubs also scaled down operations because many players moved to the ISL once the leagues began to run simultaneously.

Larsing Ming, an AIFF vice-president and owner of recently relegated I-League club Shillong Lajong, said: “If you asked anyone in the last three to four years on what the actual roadmap was, I don’t think anyone could give you an answer.”

The first team from the Northeast to play the I-League, Lajong’s demotion was hardly a surprise, given that it had significantly scaled down operations and used young teams in the I-League because they saw no clear future in the league. Instead, their strategy generated revenue through player sales. In 2017, Lajong earned ~ 1.47 crore, according to Ming’s comments to Khel Now, a big sum for an Indian club, by shipping players to the ISL.

LEFT STRANDED

One sore point for I-League teams when it came to the ISL was the way games were promoted. The FSDL, which runs the ISL, is also the official marketing and commercial partner of the AIFF, thereby giving it a major say in the running of the I-League. Also, Star India holds a 35% stake in FSDL.

When Star India was named broadcaster of the I-League, which has regularly struggled for one, for the 2017-18 season, AIFF general secretary Kushal Das said it was a ‘huge achievement’. Yet, that season, 40% of the games kicked off at 2pm, a graveyard time for sports broadcast. The next season saw Star cut down on the number of games telecast. All the while, ISL continued to be broadcast in prime-time slots by Star, across eight channels in multiple languages (compared to the one channel given to the I-League), accompanied by major promotional campaigns.

Reacting to Star India’s decision not to broadcast a significant fraction of games last season, Henna Singh, director and co-owner of I-League club Minerva Punjab FC tweeted in December: “It’s a tragic situation indeed, if there was 1 piece of advice I would give to upcoming clubs, it would be to cut your losses now and get out before you are sucked in!”

Star India declined to comment on this story.

When Lajong’s local rivals Royal Wahingdoh pulled out of the top flight after finishing third in their first and only season in 2014-15, owner Dominic Sutnga said: “It is evident that as far as marketing, viewership, and logistical planning is concerned (in the I-League), very little has been done on the lines of the ISL. We don’t see the practicality of being a part of a league that has no future.”

Kushal Das, who worked for IMG for 12 years till 2008 and joined AIFF as general secretary two months before the federation signed the deal with IMG-Reliance, said, “Forget about the ISL; let’s suppose there was only the I-League. Did they have a sustainable model? No. Whatever has happened, good or bad, the ISL has brought in more money.”

Given that the federation runs the I-League, Das’s statement can’t mean happy days for it. Asked why the AIFF were reluctant in letting I-League be a separate entity since the current model is unsustainable, Das said: “We are happy to move into a situation where there is a separate entity like everywhere else in the world. But is that a sustainable model? I don’t know.”

NO MONEY IN THE ISL

ISL clubs are finding out that a “sustainable model” can be quite elusive. For most ISL clubs, annual losses upward of ~30 crore is normal, according to data from the Ministry of Corporate Affairs MCA-21 Database. In 2017-18, ATK, the ISL’s popular Kolkata club, made a loss of ~53.4 crore.

NorthEast United are the only founding club to have managed to bring losses down to eight figures per campaign. A comparatively lower franchise fee (~12 crore a year) than most teams, low operational costs in Guwahati—the club pays nominal charges for stadium maintenance as the local administration subsidises it—and a low player recruitment budget have helped the club pare expenses.

The need to trim losses has resulted in another casualty this season: the ISL franchise in New Delhi, the only one in north India, had to shift base.

Delhi Dynamos, previously owned by cable distribution network DEN and now by GMS, a giant in the shipbreaking industry, have relocated to Bhubaneswar. Dynamos have sustained losses of around ~35-40 crore every season. The club’s annual franchise fee of ~18 crore is among the highest in the league. The higher cost of renting stadia and training facilities in Delhi too added to their woes.

By relocating to Bhubaneswar, the club is landing a multi-crore sponsorship deal with the Odisha government, it has been learnt from club officials. Moreover, the state government will also provide stadium and training facilities for free. Moving to the Odisha is likely to save the club well over ~10 crore, club officials said.

Then there is the absence of a broadcast deal—around the world, the biggest single revenue generator for football. Star India CEO Sanjay Gupta said last year that ISL’s viewership is 20 times that of the Premier League in India. But none of that extensive viewership amounts to any revenue for the league or its clubs. Star India’s stake in the FSDL allows it to function as the broadcaster of the league without buying its telecast rights.

Indian football has always struggled for money and relevance. In this tale of two leagues, that struggle continues.