The owner Bengaluru FC, one of country’s most successful football clubs of the last decade, in a letter to Nita Ambani, the Founder Chairperson of the Indian Super League (ISL), said they are incurring losses in excess of Rs 25 crore every season and raised concern about the ‘fragile financial condition’ of the country’s premier league.
Bengaluru FC owner Parth Jindal wrote the ‘losses increased dramatically’ during the Covid-19 pandemic because of lack of ticketing revenue, losing sponsorship and the additional cost of maintaining the bubble. Reliance Foundation suspending the youth subsidy (of up to Rs 2 crore) to teams has been a ‘severe blow’, according to Jindal.
The 2021 season of the ISL started on November 20 and is being played in a biosecure bubble in Goa.
As it was becoming ‘very difficult for Bengaluru FC and JSW Sports to justify and sustain the losses being incurred,’ Jindal has sought Ambani’s ‘counsel and guidance on this matter’.
Ambani launched the ISL in 2014, in partnership with Star Sports. The league was granted the status of being India’s premier football league by the Asian Football Council in 2019. ISL’s 11 teams are owned by corporates, movie stars and even cricketers, including former and current India captain, MS Dhoni (Chennaiyin) and Virat Kohli (FC Goa) respectively.
Jindal’s team played in the erstwhile top division I-League before moving to the ISL in 2017.
“Not having ticket revenue, losing out on sponsorships as well as the additional costs due to maintaining the COVID bubble have resulted in losses increasing dramatically. Since we have joint (sic) the ISL we have been losing in excess of Rs 25 crores every season and this season the numbers are even worse,” Jindal wrote.
Bengaluru FC is not the only club to feel the burden of the financial strain. In 2019, Pune City shut shop due to financial problems and in the same year, the Delhi team shifted its base to Odisha to cut its losses.
An ISL team’s major expenses are on player salaries. This season, the league has one of the finest ensembles of foreign players ever, with footballers having experience of playing in Europe and Australia flocking to India as the clubs offered better wages.
But while the main source of income for football clubs around the world is from the revenue generated by selling television rights of the league, that has not been the case in India since the broadcaster is also the league’s co-owner. In absence of TV revenue, there are few sources of income for the teams.
The ISL has measures like a salary cap (Rs 16.5 crore) to keep a check on clubs’ spending and provide a subsidy of up to Rs 2 crore to incentivise youth development. Jindal, though, felt it wasn’t proving enough.
He wrote: “Moreover, the already fragile financial health of the ISL has been worsened by the suspension of the youth subsidy usually granted by Reliance Foundation to qualifying teams and inadequate sanctions being imposed on teams flouting player salary cap rules using one loophole or another. Investing in youth is the only way Indian football is going to grow and stopping the youth subsidy is a severe blow to clubs like ours that are spending on this front.”
Bengaluru has been a trailblazer of sorts in Indian football. The team, which has in its ranks several national team players, including captain Sunil Chhetri, has won the erstwhile I-League twice and lifted the ISL trophy in their debut season in 2017-18.
Jindal added ‘it might be prudent’ for franchise owners and league organisers to ‘chart out the future path to commercial sustainability’. “Today, I am not aware how franchises like BFC will become profitable or even break even and would love to deliberate and understand along with the other team owners what the future holds,” Jindal wrote.
The ISL spokesperson didn’t respond to calls and text messages from The Indian Express.