India On the Verge of Soccer Boom

April 25, 2014
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On the TV, among the usual sports dross about betting, steroids, who wants more money, who’s taking HGH, who wants a transfer, etc. is a piece about the looming Indian Super League football tournament launched by Rupert Murdoch’s Star India television network and Mukesh Ambani’s Reliance Industries. Eight winners, described by an S.I. reporter as “Bollywood movie stars and industrial heavyweights” have bid as much as $200m to set up their own teams.

This tournament, two months in length, marks another attempt to popularize the world’s most-watched sport, football, a/k/a soccer. As in the United States of America, where other sports like NFL football and baseball have the lion’s share of revenue, India’s sporting world is dominated by cricket. Yet, with its population of 1,210,193,422, it is, clearly, the largest untapped market or spectator sports anywhere.

India On the Verge of Soccer Boom

The ISL’s organizers includes a sports management group IMG Worldwide, and they’ve arranged things so that the cricket stars Sachin Tendulkar and Sourav Ganguly, and big, Bollywood box-office acting presences like Shah Rukh Khan and Salman Khan will head franchises when the first game is played in September.

The bidding winners will form teams to be supported by the country’s most vital businesses, including media network Sun Group, which won the franchise for the Bangalore area alongside cable provider Den Networks and industrial conglomerate Videocon, which will own franchises and start new teams in New Delhi and the western state of Goa.

If cricket is the game of the father, soccer is the game of the sons. Mike Dolan, the ambitious, aggressive chairman of IMG, praised investors and fans, assuring shareholders that the event will be expanding aggressively, auctioning as many as a dozen new football franchises soon, according to the Financial Times.

Soccer earns roughly $28bn in annual global revenues, but has struggled to take hold in cricket-crazy India. Indeed, the ISL has chosen not to publish the amounts paid by each team rather than face the music from a hostile press a year from now. Nevertheless, according to newspaper Amar Ujali the minimum each franchisee has put in is  $20m for a 10-year franchise. Yet this total of $200m is clearly chump-change in comparison to the roughly $725m bid for the first eight IPL cricket franchises in 2008.

India On the Verge of Soccer Boom

Indeed, according to Amar Ujali, many of the larger industrial Indian concerns who initially expressed interest in the league were not named among the winners, including arguably the world’s wealthiest man, steel billionaire Sajjan Jindal and ally G M Rao of infrastructure group GMR. Both had demanded a flow of instantaneous revenue for franchise owners from advertisers.  As the model demanded that the first three years of revenue went toward establishing more new franchises, some of the oligarchs backed out.

More likely Messrs, Murdoch, Dolan and Ambani, told Jindal and Rao that they would not be allowed to buy more than three or four of what are labeled ‘franchise players’ for their teams. Foreign “marquee” players such as the two former Arsenal stars, France’s World Cup Winner, Robert Pires and Swedish veteran Freddy Ljungberg are already established in the league. They were hired to attract the 131m Indians who watch football on television each year from England’s Premier League and  Italy’s Calcio.

“There is no reason why India could not support a soccer league with 20 or more franchises,” Mr Dolan said “We’d expect the value of our original eight franchises to grow from $200m to well over $400m in a few years’ time,” A bigger format with twice as many teams, means football in India could ultimately pull in $1bn annually. Yet football’s lack of progress in India is frustrating to those seeking expansion. Sepp Blatter, president of the sport’s governing body Fifa, describes India as the game’s “sleeping giant.”

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