Can sports leagues survive in India in present eco-system!

Indian Premier League,Pro Kabaddi League,sports leagues,Indian Super League,Star Sports

Indian Premier League is a benchmark for professional sports leagues for cricket worldwide and every other sport in India.

Then there is Pro Kabaddi League – the other successful template for non-cricket sports in India to succeed as a franchisee- or club-based professional sports’ league model. Albeit, when the PKL as a league has created benchmarks with every passing year, the sport is let down by its own administrators. The federation has been marred by the greed of a handful of people to take total control of the sport.

The Indian Super League, with the might of IMG-Reliance and sustained unconditional backing from the All India Football Federation, has made steady growth. Even there at least one franchisee – Pune City FC – has succumbed to the pressure of sustenance of the highly demanding competition. The league has also benefited from the base created by the I-League, which now has been relegated to the status of the second division club football league in the country, in an AIFF-IMG Reliance bargain to make ISL the premier professional club competition of India.

Elsewhere, there are issues at various fronts. The initial success stories are projected far beyond the ground realities. But troubles at various levels expose the struggle for survival. No other league than the three stated above can today be portrayed or claimed as successful.

Ironically, the entire eco-system of sports creates more bottlenecks for the privately-run professional leagues than offering a healthy atmosphere or business model where the entrepreneurs as the team and league owners could operate smoothly.

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The much-needed support in the entire eco-system has been missing. “Sports leagues need the support of a strong federation. And, federations need the blessings of big political names. Leagues in all other sports, apart from cricket,  need this cascade benefit to prosper. A sports league without political backing is sadly slated to survive, but not thrive. The ecosystem of a thriving sports league in India starts with politics. And guess what, it ends with politics as well,” says Harish Bijoor, India’s leading brand analyst and founder of the Harish Bijoor Consults Incorporation.

Franchisees or the team owners form the backbone of a sports league. The league operator, commercial partners or the IP owners – subject to their respective contracts with the respective sports federations – are the lifeline. Unless the concerns to ensure a sustained growth for these two key constituents are addressed, the business of sports leagues cannot sustain.

Let’s take the successful leagues first. IPL is owned by the Board of Control for Cricket in India itself. Thus there cannot be a third-party dispute in ownership and rights. The BCCI or the IPL’s model of governance has assured a certain return for the franchisees where each one of them see their investments grow as part of a flourishing business model. After an incubation period of five to six years, the teams were able to break even and then started the period of higher valuation of stakes and bigger share for stakeholders in the IPL revenues. The franchisees, unless there were other reasons, have continued their association with the league.

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A similar model is assured by the IMG-Reliance and Star Sports (Mashal Sports) for the PKL. The result is an assured growth for the stakeholders as the league grows.

The Indian Super League has seen one-odd franchisee – Pune City FC – chickening out. But that was for its own financial reasons, rather than an issue with the league’s business structure. The ISL, after having attained the status of India’s premier professional club football league, is bound to grow faster from here.

Marketing, brand building and a commitment by the league owners and franchisees alike to develop the project as a business model have been the essence for the sustenance and success of these leagues.

Now come to the host of other leagues, which have either started and shut down or struggle every year to see through yet another season.

While some of these leagues succumbed to unprofessionalism and differences among the league owners/operators and federations, others are marred by the lack of planning and understanding of the business. The biggest sports properties in the world are built over time with sustained efforts and honest commitments.

A team franchisee owner unlike a sponsor cannot be treated as a source of income for the league. The franchisees are rather stakeholders who invest in the property. It is important for the league owners / operators to have a vision to give these franchisees a confidence that their investment will grow and become profitable over a period of time. Ironically, while a majority of the league owners look at the leagues as an opportunity to make some quick bucks year on year, for the franchisees it becomes a never-ending exercise to dump more money every year with no gains in sight.

That leads to the franchises’ disinterest and disassociation, resulting in the leagues looking for new franchisees before every season. Or, the number of teams going down. The federations need to understand what a team owner puts into creating the league and the league owner needs to understand how franchisees can sustain. Leagues are certainly not about the operators eyeing revenue from franchisee sales, sponsorships and media rights and the franchisees hoping to make money from sponsorships and prize money pool. These are all about about integrated growth.

“A league is created with a long-term vision. The league operator needs to have patience and commitment to invest and take the other stake holders along on this path to success. A league business cannot be a month- or fortnight-long affair. The brand has to be kept alive and relevant throughout the year by various activations. The league operators and franchisees have a role to play in that. PKL is one good example,” says Ashish Chadha, Chief Executive, Sporty Solutionz, who had launched the first non-cricket professional franchisee-base sports league – Indian Badminton League – in the country.

“If the federation looks at it as a golden goose, the operator will be killed and if the operator takes it as an opportunity to make quick bucks franchisees are doomed. Then other stake holders lose confidence.”

There have been reports  and instances when the operators have become the victims of the “greed” of people running the federation; and then there have been reports and instances when the operators have been accused of defaults.

The external factors then include unrealistic statutory compliances, administrative bottle necks and unrealistic costs for hiring the present infrastructure for a commercial sports event. How can sports intellectual properties grow as an industry when these are not treated as an industry in the country remains a moot question.

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