Earlier this week, the body governing football in India released its roadmap for Indian club football. Signalling some kind of truce between two rival leagues, it declared the Indian Super League (ISL) the de-facto premier club competition in India, above the I-League. It augurs well for the ISL, whose sixth season kicks off Sunday.

Yet, not all is hunky-dory at ISL, especially in terms of financial sustainability of the teams. Since last season, FC Pune City has changed hands, with the Wadhawan Group exiting and the new owners shifting the club to Hyderabad. Similarly, GMS group-owned Delhi Dynamos, reportedly unable to bear the high costs of renting Delhi’s Jawaharlal Nehru Stadium, have moved to Bhubaneshwar, and will now be called Odisha FC.

Even clubs that have not initiated any extreme measure are struggling to cope with rising expenditure, shows an analysis of financial data accessed from the Ministry of Corporate Affairs’ MCA-21 database. In 2017-18, the latest year for which data was available, only one franchise reported a pre-tax profit: the JSW group-owned Bengaluru FC. Even that was made possible by the ₹37.4 crores it received as ‘brand promotion and sponsorship fees’ from a group company. Similarly, the numbers of Jamshedpur FC in 2017-18 were boosted by ₹30 crores it received from its parent, Tata Steel, for ‘rendering of services’.

Without a large corporate backing them, other teams are struggling to balance their books. In the ISL’s first four years, most clubs have consistently reported annual losses averaging around ₹30 crore. In 2017-18, losses ranged from ₹7.7 crore (Guwahati-based North East United FC) to ₹53.4 crore (Kolkata-based ATK).

Revenues, too, showed a wide range. Bengaluru FC had the highest revenues ( ₹66.1 crore), while Delhi had the least ( ₹16.6 crore). To put that in perspective, the company that owns Mumbai Indians, a franchise in cricket’s Indian Premier League, earned revenues of ₹202 crore in 2017-18. In other words, the biggest club draw in Indian football is about one-third the size of its cricketing equivalent.

Established as a closed, unofficial league (without promotion and relegation) in 2013, the ISL only received official recognition from the Asian Football Confederation (AFC)—the body that governs association football in Asia and Australia—in 2017. The duration of the league was extended from three months to six months, and two new teams were inducted: Bengaluru FC, who had till then competed in the I-League, and newly-established Jamshedpur FC.

The league is managed by Football Sports Development Limited (FSDL). As of March 31, 2019, FSDL was owned by Mukesh Ambani-owned Reliance Group, global sports management firm International Management Group (IMG) and broadcaster Star India.

Even as the franchises struggle, FSDL has been improving financially. In the five years to 2018-19, its revenues have more than doubled and it almost reported a profit last year. Similarly, Star India reportedly earned about ₹200 crores in ad revenue in 2018 from the ISL.

While clubs receive a share from the central revenue pool, this is often eclipsed by the annual franchise fees they have to pay the league. For instance, in the 2017-18 season, North-East United FC received ₹9.83 crores from the central pool, while shelling out ₹12 crores as franchise participation fees—its largest expenditure head. For clubs to turn a profit, they will need to strike big sponsorship deals and receive more from the central pool.

The AIFF roadmap effectively relegates I-League to secondary status, behind the more high-profile ISL. The I-League, the national football league since 2007, is home to many legacy clubs, as well as relatively smaller, community-based clubs such as Aizawl FC, Real Kashmir FC and Shillong Lajong that provide indispensable support to football at the grassroots, far removed from the corporate, metropolitan centres.

For 2020-21, two I-League clubs will be promoted to the ISL, expanding it to 12 teams. Additionally, from 2022-23 onwards, the I-League winner will be promoted to the ISL, while the bottom-placed ISL team will head in the opposite direction. While this comes as a lifeline for I-League clubs, there are financial concerns.

I-League clubs may not have the financial wherewithal to compete with incumbent ISL clubs. When Bengaluru FC, already one of the biggest spenders in the then I-League, transitioned to the ISL in 2017, its expenditure almost doubled. I-League clubs will be exempt from paying participation fees in ISL, but they will also be denied a share in the central revenue pool, potentially fostering a divide between larger and smaller clubs.

Indian club football is at a crossroads today. How it balances new corporate interest and old values resident in legacy and community-based clubs will determine how ‘the beautiful game’ evolves in India.

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