The entity that came into existence as a CSR initiative for the $13 billion conglomerate to promote sports in the country is a serious enterprise in the business of sports. The on field success story reflects in the Bengaluru FC’s emergence as the Indian Super League champions. The Delhi Capitals, who languished at the bottom of the IPL points table last year when JSW had little say in the affairs, are placed atop the points table.
The company’s State-of-the-art centre of excellence in Bengaluru, the Inspire Institute of Sport is on par with the best sports facilities in Asia.
The company, that aims to maximize India’s sporting potential and play a crucial role in making the nation a global sporting powerhouse, also means business in true commercial terms where investments are evaluated and ascertained by the potential returns, and where commercial gains are as much important as a team’s success on the field.
However, the first of the JSW Sports teams to achieve the league title, Bengaluru FC might well take the longest in terms of being profitable. While cricket is the quickest, kabaddi is placed next in terms of commercial profitability.
Here are the excerpts:
InsideSport: How has Delhi Capitals changed as a business entity from the Delhi Daredevils days?
Mustafa Ghouse: It’s been a very positive change. We have taken a little time for everyone to warm-up to the efforts put in for the last six months in terms of rebranding, new strategies for team’s social media, marketing and reconnecting with the Delhi fans. Stadium can be seen warming up to these efforts.
The game at home against Mumbai Indians (on April 18) has seen the highest gate collection that the team has ever made. Sales numbers have also been very positive despite the fact that we have inherited a number of the deals which were already in place. There was nothing much we could include in terms of initial sponsorships numbers. We are optimistic about a bigger jump after this season.
IS: What were the priorities after taking over the reign of the Delhi IPL team management?
MG: Every department was analyzed and individual targets were set within the team. On the game’s front, we brought in Sourav Ganguly as the Team Advisor to help Head Coach Ricky Ponting, Assistant Coach Mohammad Kaif and the rest of the coaching staff. There were long discussions with Ricky Ponting to fill the gaps in the squad. The strategy had started with the auction. The team performance is the most important aspect. If the team does well everything else falls in place.
Performance on the pitch was a priority.
IS: What is JSW’s business philosophy for Delhi Capitals?
MG: The important aspect of our business philosophy was to reconnect with our fans. A market research prior to the season has revealed that everyone was very frustrated or disappointed that the team has not done well enough to match its potential. The fans were disappointed that the team didn’t do well in spite of having good players. Instilling that confidence in the fans was the first step.
There has been a lot of chopping and changing in the marketing strategies in the past. There was no continuity. An initiative was made to establish that continuity so that the fans can connect with the brand and keep coming to the stadium. Fans during the previous years would only come for one or two games during the season to experience the IPL fever. They were not turning up regularly to support the team. However, this season we have seen better turnouts and this is something we target to achieve over the course of time.
IS: Parth Jindal in one of his interviews has stated that JSW Sports is interested in absolute ownership of the Delhi Capitals. Have there been any serious discussions in this regard?MG: Nothing at the moment. We are only focused on the season. There is no talk about any change in the ownership percentages right now.
IS: Bengaluru FC is excelling on the field. How is it performing as a business entity?
MG: It is improving. Our sales numbers have grown year on year. All our partnerships and associations have been long-term and everyone is really happy about it. The league is doing better and better. The results on ground are there for all to see. We are doing our bit to make sure that our sales numbers are improving.
IS: With everything going your way, how long can it take for Bengaluru FC to become profitable?
MG: With football, it is going to take a little longer. It can be another five to seven years before we can really think about it. Everyone will have to work really hard on that.
IS: From IPL and ISL to the parent company JSW Sports, which has emerged as one of India’s leading sports business entities. For JSW, what is the strategy and the vision for sports?
MG: JSW Sports was initiated to promote sports in India with the Group’s CSR programme. As the confidence grew with the progress, we have taken up more opportunities that have come our way. In a short span of six years, we now have three teams ineach of the three premier leagues in the country and we have an Olympics training facility which is compared with some of the best in Asia to prepare athletes for the Olympic Games. We are now also looking to further consolidate this.
IS: So do you agree that the JSW Sports, which has started as a CSR initiative, is a full-fledged commercial venture now?
MG: Yes. It is a full-fledged business. We moved to ISL to make it commercially viable. Kabaddi is also a great opportunity for us and in cricket the numbers are there for everyone to see. The intent is to succeed as a business entity and do a number of CSR activities to support sports in the country.
IS: In the business of sports there is cricket at one end and then there are other sports. You are managing both the ends of professional sports. How distinct these two ends are?
MG: In every sport, there are different challenges and different strategies. With football, the initial challenge was more about the awareness of the sport. Everyone watches football. But that’s more from the global perspective. Football fans are well aware about what is happening in the European leagues, but they are unaware about our domestic football. As we got into football, it was more about educating the fans that Indian football also exists and then building a brand around it. I think, we have done that very successfully with Bengaluru FC.
In kabaddi, there is a different set of challenges. Owning a team from Haryana meant that we did not have to educate the fan base about the sport. But there were challenges like making it more urban and have more fans to support the team from different parts of the country and maximize the potential for the sport.
For cricket, it is a different ball game that supersedes everything else. Yet, from our individual team’s perspective, we really needed to build our fan base and brand, and establish the fact that Delhi has a formidable cricket team in the IPL.
IS: An average fan would say cricket is a religion, but from your perspective can the sport be called an industry now?
MG: The type of investments are made around the IPL can be compared to top sporting leagues in the world. If you just talk about the type of combined revenue IPL generates for all the eight teams, the numbers will be bigger than most small industries in the country.
IS: Moving on to the JSW Inspire Institute of Sport. What all disciplines do you have and how many kids are training?
MG: We have athletics, boxing, wrestling and judo as of now. We will be adding swimming very shortly. At present, we have around 120 kids training at our centre in the age group ranging from 11 to 18 years. The talent has been scouted from across the country and this completely is a CSR venture.
However, there have been requests by some professional teams to train at the JSW Sports centre facilities. In those instances, there is a nominal fee to cover the expenses incurred on the services.
IS: Does JSW Sports centre also have some kind of an affiliation with the governing bodies, national federations for these sport disciplines?
MG: We are already a Khelo India accredited centre. So all athletes who get Khelo India support have the opportunity to pick the centre as their training base. With regard to the other associations, boxing association has had their training camps at the centre. Judo has shown interest to have their national training centre.
IS: Parth Jindal is personally involved with all JSW Sports ventures. How big is the sports pie for him?
MG: Parth is very involved with all aspects of the sports businesses. He is very hands on and keeps track of everything on real time basis. Even Mr Sajjan Jindal is personally involved and keeps track of what is going on and how things are progressing. They both are extremely passionate about sports.
IS: Does Jindals’ involvement go beyond the passionate sports lovers level?. Do they seriously get involved with sports business number crunching?
MG: Passion is just the starting point. On the business side, everything is discussed in terms of numbers. Each of our ventures must make commercial sense for us. We have been approached by multiple leagues, but we make sure to set a right balance.
IS: How long should it take for a sports entrepreneur to break even in an economy like India?
MG: It varies from sport to sport. For example, kabaddi might break even sooner and football can take longer. Even in the Indian Premier League, a majority of the teams have taken up to ten years to really become profitable.
Technically speaking, for instance, Dream11 is a sports business and they have a billion dollar evaluation in a short span.
It is difficult to say how long a sport can take to become profitable. But, now there are many avenues around sports that entrepreneurs can explore. The industry is growing for sure.
IS: Kabaddi as a league has progressed better than one could have expected. But it’s faced with the issues like a rival league and uncertainty in the federation. Mr Ronnie Screwvala had raised the conflict of interest issue with official broadcaster Star India owning the major stake in the league. Are the Pro Kabaddi League franchisees really concerned about these issues?
MG: Pro Kabaddi as a platform is very solid. I don’t see a reason to worry about the other league. It is only a matter of time and we just have to wait and watch. We need to be concerned only about our bit. There are challenges about having a stable federation, which I believe will be settled. That will allow everyone to focus on the sport and take it to the next level.
IS: What about the conflict of interest issue raised by Mr Screwvala. Was it ever discussed among the franchisees or was that his individual opinion?
MG: We (the franchisees) have had a few conversations and we are confident that we will find a good solution to it.
IS: Star India’s PKL ownership was a known fact for all the franchisees even when they entered the league. So, what is the concern now?
MG: The question is about finding the right value. Considering the fact that Star already owned the league, I think, there was a mechanism in place that was negotiated by the previous eight owners before we came into the scene. Star has done a brilliant job in making the league popular, but it is a question about ensuring that the mechanism is followed and a value is created.