Decoding the I-League and Indian Super League merger

Owners of not just Goan but all I-League clubs have every right to feel hard done by.

Updated: Aug 20, 2016, 00:21 AM IST
Decoding the I-League and Indian Super League merger

October 2005. Autumn was just setting in and the rains in Goa were bidding farewell. The trees shed their leaves, birds remade their nests for winter, the tourist season just kicked in with shacks springing up on the beaches and the temperatures cooled - perfect conditions for an intense game of football. It was also a time when Indian football made its first major leap since the formation of the National Football League back in 1996. The AIFF had just signed a whopping broadcast deal with Essel Group (Zee Sports) for a ten-year-period, ending their association with Doordarshan. 

Indian football moved from getting around 10 cr annually from the national broadcaster to approximately 274 cr from Zee over 10 years. With this deal, all telecast rights of Indian football for the next ten years would be owned by Zee, with the channel telecasting more than 70 live matches per year. It was also in charge of roping in sponsors for Indian football. 

The first tournament to be broadcasted as a part of that deal was to be the 2005 Federation Cup, one of the better-organized tournaments Indian football has seen till date. Goa's Fatorda stadium was spruced up, the lights came on, the grass cut in European-esque style, cheerleaders called ZEEbra girls made their way to the ground and a certain Mayanti Langer, now a household name, made her first foray into Indian football.

The battle on the pitch too came alive. Vasco Sports Club, power house of Goan football at the time, riding on a huge support of 12000-odd people stunned the mighty East Bengal, featuring the likes of Alvito D’Cunha, Renedy Singh, Suley Musa among others,  in the quarterfinals via a penalty shootout. Stadium for the final between Sporting Clube de Goa and Mahindra United was jam packed more than an hour before kick off.  Supporters in open jeeps with flags and trumpets sporting the Dutch orange made their way to Margao. The Edeh Chidi- Dudu Omaghbhemi combine, that was one of the most fearful strike partnerships Indian football had ever seen, had captured the imagination of the Goan faithful. 

Dudu would eventually leave Sporting the following year for Polish club Wisla Krakow and also go on in the Champions League with Hungarian club Debreceni. That game had everything - a lethal Dudu-Chidi strike force in one half and a deadly Barreto-Yakubu canon on the red side. Together, at that time, these four had scored more than 300 goals on Indian soil. Then there was another matter of seeing a rare Indian defensive pairing of Mahesh Gawli and Deepak Mondal thwarting every attack of the Flaming Oranje, Steven Dias crossing in balls with deadly accuracy, Shanmugham Venkatesh threading passes through the eye of a needle, Surkumar Singh making bone-crunching tackles at one moment and then making marauding runs down the right flank in the next second and Joseph Pereira dribbling past defenders to cross with the left foot (a rarity now considering Nicolai Adam can’t find a single left-footed player for India’s U-17 World Cup team). 

The signs were truly encouraging with quality foreign players, improving Indian players, a packed house, electrifying atmosphere, cheerleaders and quality broadcast with foreign commentary. Anybody watching that could not be faulted for assuming that Indian football was on the rise. Ten years later, in what would have been the logical end of the contract with Zee Sports, these very teams that played an emotional, energy-sapping contest no longer exist. India has slipped to a nadir in the FIFA rankings and football’s soul in the country seems in a perilous position.

The IMG Reliance-AIFF deal

In late 2010, prompted by a five-year review clause in the contract, Zee and AIFF parted ways. At a time when the coffers of Indian football's apex body was empty and needed a grant of 25 cr from BCCI to prepare the team for the 2011 Asian Cup (where India had qualified after a gap of 24 years), IMG Reliance stepped in and pledged 700 cr over 15 years for all commercial rights to football in India, including sponsorship, advertising, broadcasting, merchandising, film, video and data, intellectual property, franchising and the right to start a new league. Many in AIFF viewed this as a bailout that had to be accepted. The new league - Indian Super League - was given birth in 2015 with special permission from FIFA on the condition that there had to be a merger within the next four years with the country's premier league.

Analyzing the merger roadmap presented by IMG Reliance and AIFF

At a meeting of all stakeholders of the I-League on May 17, 2016, AIFF officials presented the new roadmap for Indian football. In what was claimed to be a 'merger' between the two leagues turned out to be a plan that was thrust down the throats of the I-League teams. The ISL would be the premier league in the country with no relegation while the I-League and second division I-League would be rechristened as League One and League Two. While there would be promotion for League Two teams to League One, there would be no promotion for League One teams to the ISL, much to the chagrin of many I-League club owners.

Progress from 2012 to 2016

Since IMG Reliance bought over the football rights in the country, there has been a downslide in the fortunes of Indian football. The National team has seen its lowest ranking of 173 (March 2015) compared to the 94 (February 1996), when the NFL was formed and 127 (October 2005) when Zee bought the rights for Indian football. Famed Dutch coaches like Wim Koevermans and Technical Director Rob Baan (who was rumored to be earning 1 lakh per day) were brought and huge amounts of money spent in a bid to improve the sport in India. While most of this money came from the IMG Reliance deal, it failed to have a positive impact on the game. 

In fact, Baan’s master plan –Lakshya- is not even being implemented by AIFF and its commercial partners. As many as six I-League teams have shut down since IMG Reliance entered the Indian market in 2011 and another five have been asked to close down by AIFF for failing to meet its stringent club licensing criteria. Three AIFF run academies too have shut down due to lack of funds, youth development policies have been reduced to a shambles, the Indian team has been beaten by lowly Guam and an over dependence on Sunil Chhetri to bang in the goals has never been higher in the absence of quality talent coming through.

All this in a mere five years is enough to send alarm bells ringing. Mohun Bagan and Bengaluru FC’s progress to the round of 16 and quarterfinals respectively of the AFC Cup, Asia’s equivalent to the Europa League has been the only silver lining in the dark horizon.

The national team

At the presentation delivered at the merger meeting in May, AIFF targeted a rank of 120 for the Indian National team by 2017, an overambitious projection. For starters, India hardly plays any friendlies on the FIFA Match Dates which would enable them to garner points and move up the rankings. India played just one friendly against Nepal in 2015, although they played eight World Cup qualifiers and also the SAFF Cup. Though India would be playing the AFC Asian Cup 2019 qualifiers this year where out of a total of 24 teams, 12 would eventually make it to the tournament in UAE, it remains to be seen whether the Blue Tigers would be among the top 12 teams in the qualifying tournament which has the likes of Bahrain, Oman, Guam, Jordan, Lebanon and North Korea besides others. 

Failure to qualify for the Asian Cup would most certainly dash hopes of India reaching the top 120 FIFA rankings in the world. There are a total of 16 friendly matches that can be played on FIFA match days from now on up till the end of 2017, but considering that majority of the match days would be occupied by the AFC Asian Cup qualification, the number of friendlies that India could pay will be reduced considerably. Failure to put up a good show in the qualifiers would certainly put an end to India's hopes of moving to the top 120. The bright spark however has been the proposed rebirth of the Nehru Cup which would bring a smile on the faces of Indian football fans.

Aping the A-League

The major bone of contention has been the re-structuring of club football. At the presentation, the AIFF officials proposed a three-tier format for club football in India. However, the fact that the Indian Super League would be devoid of relegation and the League One devoid of promotion seems to be the major cause of disagreement among the stakeholders of Indian football. It is apparent that the AIFF and IMG Reliance officials have followed the Australian League (A-League) model. In Australia, the A-League is a closed league devoid of relegation while there exists several state leagues that have a two-tier system, where there is relegation within the state but no promotion to the A-League. The Football Federation of Australia (FFA) Cup is held among teams belonging to the A-League and the State Leagues, similar to what is being envisaged in India with the AIFF Super Cup. 

What happened in Australia?

The AIFF cites the participation agreement signed between ISL franchises and IMG Reliance as the reason for being helpless in implementing relegation - the ISL franchises were told they would be exempted from relegation for ten years in the participation agreement. Another theory floating around was that franchises needed to have the assurance of stability for ten years since they would be investing a lot of money. All valid points one may agree. However what happened in Australia paints a very bitter picture.

Since the inception of the A-League in 2004 as many as three teams, New Zealand Knights, North Queensland Fury and Gold Coast United have all shut shop, highlighting the volatile nature of the league. At present, out of eleven teams, ten teams appear to be in the red, suffering huge losses. Brisbane Roar and the Central Coast have had their fair share of problems, while the Newcastle Jets are in FFA’s hands after its ex-owner Nathan Tinkler pulled the plug on finances last season. According to reports, among the A-League teams, only Melbourne Victory had profits in 2015 after being backed by almost 50 investors, cutting down losses.

Melbourne Hearts (now renamed Melbourne City) who were in huge debts before being taken over by Manchester City, could now make considerable profits in the future after becoming part of the City Football Group owing to the fact that they are able to share considerable resources like shirt sponsors (Etihad Airways), players (David Villa, who was loaned from New York City to Melbourne City for the first ten games of the A-League since the MLS began later) and the brand image of Manchester City. The long-term future of the lone team from New Zealand, Wellington Phoenix, too looks to be in doubt, as FFA believes it is not an attractive enough franchise for television revenue.

It could happen to ISL teams too

Apart from two countries in the world (Australia and the USA), none of the rest operates with a closed league. The A-League was initially made a closed league as the franchises invested a lot of money when it was formed and needed immunity from relegation in the near future in order for them to stabilize. However even 16 years after inception, teams like Newcastle Jets and Brisbane Roar have struggled to keep sponsors for consecutive seasons. In 2007, New Zealand Knights were replaced due to poor attendance, financial instability, lack of domestically developed players and poor attendance.

In 2012, Gold Coast United were shut down by the A-League after its average attendance averaged only 5500 and 3500 for two successive seasons. The same was the case with Northern Queensland Fury. In contrast, some of the National Premier League teams in Australia attract nearly 11,000 spectators on an average. Compare them with the ISL clubs now and there is a huge reason to be alarmed. Pune City FC, the highest spending franchise in the ISL, attracts the least crowd for its matches, struggling to fill a 7500 odd seater stadium even after doling out free tickets. Delhi Dynamos too have failed to attract substantial crowd for their matches - this despite the hullabaloo of the ISL, grandiose marketing and presence of superstars like David Trezeguet, Florent Malouda, Roberto Carlos and John Arne Riise. 

In contrast, Salgaocar FC regularly attracted 5000-plus fans to their I-League games despite having little or no marketing and no presence of stars etc., while tickets at the Rajiv Gandhi stadium in Aizawl, home to Aizawl FC, was often sold out a week before the match. According to reports, Pune City FC suffered losses to the tune of 55 cr in the first season of the ISL, while Delhi Dynamos are desperately looking for an investor. The bottom line is that having a closed league like Australia doesn’t guarantee that the clubs would become stable. Currently there are no means of financial fair play being enforced in the league.

Unlike the J-League (Japan) model, where clubs could spend proportionately based on the income they were generating, in the ISL, clubs are free to spend with salary caps being the only restrictions imposed.

Revenue sharing and financial stability: A myth or a reality?

As per the AIFF-IMG proposal, there would be a minimum guarantee of central revenue shared amongst all clubs across the League One and League Two, while IMG-Reliance would also share the central revenue with the ISL franchises. Whether that actually happens though, remains to be seen.

Across the globe, sports teams generate revenues through the television rights and media rights, sponsorship, ticket sales, prize money and other small match day revenue streams like stall rentals etc.

Broadcast and central revenue

With the advent of digital media, television rights have now become the major source of revenue across all sports properties. Take IPL, for instance where the media rights account for nearly 70% of the total revenue earned. In Indian football however, the scenario looks extremely grim. In 2014, IMG-Reliance floated Football Sports Development Limited, a joint venture between IMG-Reliance and Star India, a company that would own and operate the Indian Super League. Star Sports bought a 35% stake in Football Sports Development Limited for approximately 2000 cr. However, after the initial honeymoon in its inaugural season where the ISL was the second most watched sports league in India, reality soon dawned on the media conglomerate. 

According to media reports, the Pro Kabaddi League overtook ISL to become the second most watched sports league in India. With the TRP’s down, it looks very unlikely that Star would break even on their massive investment in the ISL, which would strengthen the argument that broadcast money could never trickle down to the franchises or clubs for the next ten seasons.

Last year, the league generated about 100 cr revenue from sponsors. A sum of approximately 6 cr each was distributed among the franchises and the rest used to organize the league. Assuming the central revenues increase by even 50% to 150 cr this season, it would mean an amount of just 9-10 cr for the franchises that are spending in the range of 40-45 cr. Mind you, if a minimum guarantee amount is proposed to the League One clubs, then this could go down even further. In the highly unlikely event that ISL does manage to earmark around 70 cr as broadcast revenue (double of what Zee paid to AIFF and almost the same as emerging Asian leagues) together with approximately 130 cr as sponsorship revenue, it would make a total kitty of 200 cr to be distributed among the 10 ISL franchises, 10 League One clubs and 10 League Two clubs as proposed in the format. This would leave each club and franchise with just 6.6 cr in sponsorship and broadcast revenue if divided equally which probably would never be the case, considering the ISL franchises would fight for a majority of the pie. Also, with so many properties in its portfolio, it remains to be seen whether Star Sports would actually broadcast League One matches as claimed in the proposal.

The football calendar and format

Under the proposed format, the ISL would run parallel to the ISL, the League One and League Two. Each league would be constituted with around 10 teams each, with the AIFF hoping to have thirty teams in each of the divisions as well as constituting a League 3 played on zonal basis by 2020. This would mean that from now on current I-League teams would have to start signing players and technical staff on yearlong contracts, burning an even bigger hole in the club owners' pockets.

The advantages of loaning players to the ISL and saving wages would be history now. The clubs budgets would increase by a minimum of 50% in a league that is already poorly marketed and financially unstable. The ISL franchises too, could take a severe beating. Players would now have to be signed on yearlong contracts leading to increased spending on player wages. The salary cap of 5 cr for domestic and 20 cr for international players would be grossly inadequate to attract better quality and younger foreign players to the League. The operating expenditure for an ISL franchise could now touch 70-80 cr a year with increased salaries, stadium rents, logistics etc. What is worse however could be the fact that while the ISL franchises would still continue employing ten foreign players per team. That number would have to be reduced to 4 in March since the Super Cup would be played under AFC guidelines of 3 foreigners plus one Asian. The rest of the six foreigners would have to be paid two months for doing nothing. 

However, the second division clubs could take the worst beating. The third tier league would commence in September with a qualifying round initially followed by a final round, where the top three to four teams in each group would play the final phase. The biggest glitch in this scenario is the fact that teams now who do not qualify for the final phase would have to sign the players till March to play in the newly-constituted Super Cup. The owners of the second division clubs could take a major financial hit because of the new format. Already this year, second division clubs were given no travel subsidy by the AIFF and had to make their own travel arrangements. This year, with teams from Kashmir, Sikkim, Guwahati, Chandigarh, Goa and Manipur, travel was an extremely expensive proposition. Lastly, with all three leagues running simultaneously, it would be interesting to see how the AIFF manages the infrastructure, referees, broadcast and what the crowd attendance for a League One and League Two match would be. 

To put it in a nutshell, running more than 12 matches a week could stretch the already fragile interest for the game - in a country where football is not the number one sport and there exists no sporting culture and tradition. So, the big question is - where does Indian football go from here? Many would argue that the IMG Reliance investment came at a critical juncture when the AIFF was severely cash strapped and might not have had funds to run the I-League or have the India team train abroad in preparation for the 2011 Asian Cup. Still, some would feel that the Indian Super League has brought back crowds to the stadium at a time when attendance for some I-League matches barely touched 100.

However, there are truths that the AIFF cannot ignore. The ISL was played at prime time in the evening under the lights; while I-League matches were played under the scorching sun on weekdays in conditions even retired citizens could attend. The ISL had 12 cameras with world class broadcast, while the I-league had a two-camera set up and frames shown on television where fans had to strain their eyes to spot the ball. The ISL had glitz and glamour, spruced up stadiums and well-maintained pitches, while the I-League had matches sometimes on dust bowls and in stadiums where dressing rooms had no water and electricity. The ISL had ads in newspapers, television, billboards and hoardings,, while the I-League had the last piece of space on the newspaper, extremely little presence on social media and a drought of information. 

August 2016. With the monsoon setting in, it's 'off-season' in Goa. The coconut palms are dancing to the tunes of the winds, with a green carpet covering the mountains. Enjoying a game of football in the rains is a famous local tradition. Sadly for Goa's football lovers, there is not much to look forward once the season starts. Owners of Salgaocar and Sporting met with AIFF officials and held firm on their demand for changes in the proposed league merger. With Dempo joining them in the near future, and FC Goa fighting many off-field battles, the football landscape has been drastically altered.

Owners of not just Goan but all I-League clubs have every right to feel hard done by. Some of them have nurtured Indian football with little support over the years. Now that the big boys have walked into the room, the country's football officials have conveniently sidelined them and moved on to yet another ambitious project. Therein lies the reason why eleven clubs have closed down since 2011.

(Jonathan de Sousa is an avid follower of Indian football. His views do not represent that of the organization)