The IMG-Reliance deal
Good or bad for Indian football? You decide.
Under a deal struck this week, IMG Reliance is to secure “all commercial rights” of football tournaments organized by the All India Football Federation (AIFF), the apex football body, for 15 years.
AIFF, which organizes annual tournaments such as the I-League, the Durand Cup and the Federation Cup, expects to earn around Rs 700 crore from the deal, its general secretary Kushal Das said. The amount is to be paid over 15 years as the fee payable to AIFF increases every year for the first five years and then gets fixed according to a formula.
Zee News’s version adds an interesting tidbit:
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.
It is reliably learnt that for the first five years of the deal when the new partners attempt to bring about a change, the AIFF will pocket a sum of around Rs.30 crores and in the following 10 years, payments will be made with the total amounting to Rs.750 crores or so.
However the deal is so structured that it doesn’t leave much for the clubs and so the “sustainable” aspect is automatically taken out of the picture. IMG-Reliance have to pay ‘x’ amount of money to the AIFF, who then have to manage all their activities within that sum, each year and if at all any sponsorship comes in, it will be taken away by the commercial partners.
So tomorrow if the I-League rights are sold to a major broadcast player at a regional, national, continental and global level, the profit would go to IMG-Reliance while the clubs are left empty-handed. And mind you, the maximum revenue the clubs across the world earn are from broadcast rights but there is no scope for the same in India, at least on paper.
IMG Reliance pays around 33-35 crores each season to the AIFF out of which the governing body for football in India uses 16-17 crore to conduct the I-League. Coca-Cola also repays the AIFF in actual expenditure for the conduct of the U-16 Coca-Cola Mir Iqbal Hussein Trophy. The rest of the 16 odd crores given by IMG is used by AIFF to conduct their other tournaments like the Federation Cup, the Santosh Trophy and is also used on the national team.
Last season, IMG-Reliance sold the television rights of the I-League to News Time Bangla and News Time Assam for an estimated 17 crore rupees and to Ten Action for an undisclosed amount. But all this revenue went to IMG Reliance thanks to the deal with AIFF. So, in effect IMG got back their investment on the I-League through the broadcast revenue while the clubs were left with nothing out of the 17 crores.
“You are telling me as a club that ‘I know you are spending ‘x’ amount of money every year, some crores are going into this. But that’s how it is; so continue and it’s not my problem that you have no way of recovering your investment. It’s not my problem that the I-League is not marketed well, it’s not my problem that the game is not growing. It’s not my problem.’ It’s not the AIFF’s problem. It is somebody’s problem and no one knows whose problem it is,” he added with a touch of sarcasm.
He here is Rajeev Piramal, co-owner of the former Pune FC.
Now, remember the cash strapped coffers of the AIFF? The deal involved AIFF breaking up its broadcasting deal with Zee. This was done by paying Rs. 70 crore to Zee. This was publicly announced.
“IMG-RIL has also given a buyout amount of Rs 70 crore to Zee Sports to exit from the agreement five years before expiry,” the AIFF president said.
Where the hell did AIFF get the money from?
To add to the irony, there is a strategic plan budget of the AIFF available on the internet; according to it, the AIFF will earn a total annual income of anywhere between Rs. 51 to 62 crores, in the years from 2014-17. The sum paid was more than their income estimates.
Has IMG-Reliance helped the game develop?
An AIFF Elite Academy in Goa has been set up for developing players; there were others in the pieline which didn’t happen, but fine. And the Reliance Foundation has, admittedly, helped in setting up matches where school children from Kolkata and Kochi can fight out the final amongst themselves, in a match in Mumbai; just think of the possibilities, if school kids can play out like this. But then there were promises. A national academy was to be built in Baroda; no news on that. And while they have taken up football initiatives at the grassroots, almost all are branded with the ISL logo.