How India's fund starved football clubs make ends meet

Millions of Indians watch the Euro Cup, the English League, Spanish La Liga and Copa America on TV. Millions of teenagers follow the fortunes of premier clubs in Europe like Manchester United, Liverpool, Barcelona or Bayern Munich. They go to sleep late and wake up early so as not to miss watching the matches. But while their passion for the beautiful game is evident, football clubs in India continue to languish.

In Goa, where football is a religion, industrialists continue to patronize and promote football clubs. But they admit it has been a losing proposition. Running a football club in India has never been easy. Investments have always exceeded the returns. Far from making any profit, top Indian football clubs or any I-League or ISL club doesn’t even break-even at any point in a calendar year. In the past one decade, many clubs have either shut shop or scaled down their operations considerably.

“Running our football club is not a profitable business venture. My father, Churchill Alemao, and our family members have been running the club since the last three decades but only because of the sheer passion they have for the beautiful game. Our main aim is to see India play in the FIFA World Cup,” says, Valanka Alemao, CEO of Churchill Brothers and daughter of Churchill Alemao, ex-Chief Minister of Goa.

Over the years, the club’s patron Churchill Alemao, who happens to be the current President of Goa Football Association, has weathered every storm that has confronted the club and has ensured that football never died, despite no major returns gained in spite of crores of rupees being spent annually on running the club.

According to Valanka, Churchill Brothers spends 75 percent of its budget on the team, 15 per cent on youth development and the remaining 10 percent on marketing and PR activities. The few sponsors the club had over the years like Zee, Coca Cola, Musli Power, Nivea have been the club’s main source of revenue generation.

I n 2016, however, Dempos, the most successful I-League club with five titles pulled out of I-League considering the high cost of fielding and maintaining a team in the I-League and also due to AIFF’S decision to restructure Indian domestic football which made Indian Super League (ISL) a top-tier league and relegated I-League to the second division. Now, Dempos plays only in Goa Professional League. With Dempos pulling out, other prominent Goan clubs – Salgaocars and Sporting Club de Goa – followed.

The top football clubs in India spend anywhere between Rs. 10-15 crores annually. Salaries of foreign and domestic players, which form major part of their budget, have shot up considerably over the years. However, revenue from ticket sales, merchandise sales and other promotional activities contribute in minuscule proportion to the clubs’ coffers. Even prize money of all the domestic tournaments in India, if combined together, cannot compensate the huge amount spent by these clubs.

The grim reality is that I-League clubs do not get a single penny from broadcast deals. The television revenue goes directly to the All India Football Federation (AIFF) instead of the clubs, unlike in all other major global leagues where the revenue generated from broadcast deals is shared with the clubs and is second only to sponsorship when it comes to income for a club. In fact, majority of clubs in the I-league rely on main sponsors to fund their team throughout the entire season.

Since the I-league began in 2007, 34 clubs have played in the league but five of those clubs have closed down their operations - JCT, Mahindra United, Chirag United Kerala, Bharat FC and Mumbai FC – due to financial instability.

When JCT closed down its head of operations, Samir Thapar stated that the lack of any credible exposure and money as a major reason for JCT disbanding. It is not just I-League clubs which are suffering, even the top clubs in the high-profile Indian Super League (ISL), are facing financial strain.

Earlier this year, in a letter to Nita Ambani, the Founder Chairperson of the Indian Super League (ISL), the owner of Bengaluru FC, one of India’s most successful football clubs of the last decade, 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 football tournament i.e. Indian Super League.

“Losses increased dramatically during 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 was also a severe blow. Since we have joined the ISL, we have been losing in excess of Rs. 25 crores every season and this season the numbers are even worse’, wrote Bengaluru FC owner Parth Jindal.

Bengaluru FC is not the only club to feel the burden of financial strain. In 2019, Pune City shut down due to financial instability and in the same year, Delhi team shifted its base to Odisha to cut down its losses and has now rebranded itself as Odisha FC from Delhi Dynamos. At present, almost all the ISL teams are incurring losses to the tune of crores of rupees every season. The only major source of income for them is the revenue from the central pool, which is around Rs. 13 crore each, but that is almost evened out by the annual franchise fee of Rs. 12 crore to Rs 16 crore they pay each year, depending on their base.

Since, the league is co-owned by the broadcaster itself, the revenue generated by selling television rights of Indian Super League goes to the broadcaster and not shared with the ISL teams. In absence of TV revenue, there are few sources of income for ISL teams like sponsorship, ticket sales, merchandise sales and prize money which does not compensate the huge amount of money being spent in running the club.