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Bollywood star Ranbir Kapoor not to dilute stake in Mumbai City FC
Mumbai: Bollywood star Ranbir Kapoor is not looking to dilute stake in Mumbai City FC, an Indian Super League (ISL) franchise.
While there have been offers, Kapoor has made it clear that a stake in the team will not be sold, Mumbai City FC CEO Indranil Das Blah told TelevisionPost.
“When Kapoor got the team he knew that it would not be financially profitable for a few years. Also, he isn’t involved to just be the face of the team. He is as involved as an owner can or should be. He is in it for the long run,” Blah said.
Mumbai City FC expects to achieve profitability in the ninth year and year-on-year breakeven in the fifth year.
Blah said, “We are in the ISL for the long haul. At the end of five years, we should be in a position to be close to breakeven for that particular year. In the ninth or tenth year, the franchise will be profitable. But there are variables. If the league does really well, then we could achieve breakeven earlier. But if the league does not sustain itself, then obviously losses will mount. A realistic goal would be start breaking even per season from the fifth year.”
Revenue split: The franchise is looking at a 20 per cent revenue growth. Interestingly, 80 per cent of its revenue comes from local sponsorship and ticketing. 70 per cent of the local revenue comes from sponsorship. Only 20 per cent of overall revenue comes from the central pool. A big reason for this is that the franchise does not get broadcasting rights revenue from the central pool.
“The ISL has gone out in the market and sold sponsorship centrally. Not having broadcast revenue from the central pool is not ideal. Having said that, the amount that Star spends on production values for the event is of EPL (English Premier League) quality level and their investment in marketing balances things out. We do not get broadcasting revenue, but we have a big conglomerate like Star completely invested in the ISL. Hence, I am not too worried about broadcast revenue because what you get in return is the pure might and reach of the Star network.”
Local sponsorship: The game plan in this area is to put quality over quantity. “We have set certain benchmarks in terms of pricing. It has been better this year as brands are aware of the ISL and how well it did last year. However, brands tend to wait till the last moment and point out that we have a slot free and they want it at a lower price. We would rather keep that slot free than devalue our brand. Most of our sponsor slots are filled in. We have one or two to fill, but we are willing to let that go if the market is not willing to pay accordingly,” Blah explains.
The franchise has eight sponsors—some are on the jersey while others are either licensing deals or partnerships. The Ace Group is the title sponsor. It has also tied up with a jewellery company which will create customised jewellery for the franchise members, both men and women.
“We are clear that companies have to give a fee and a media commitment. It could be either traditional or media. Luckily, our sponsors are active and have realised the need of leveraging the opportunity. They committed to investing two times of the fee in activation and marketing. This is important for value in the deal to come through. It is important for people notice that we are doing interesting stuff. There needs to be a direct engagement with audiences of both the clubs and the sponsors,” he added.
Blah also noted that activation for a real estate major will be different from what a car company does. “We do not want to limit our sponsors’ and partners’ activation to just a TVC or an ad shoot. We want to look at innovative ways to leverage the relationship. Once we have decided on the sponsorship amount, our marketing and creative team sits down with theirs to figure how best to excite the audience and what is best for both parties. It is not just about taking the clients’ money.”
Giving the example of work done with IDBI last year, he said that the bank has a huge network. Tickets were sold at various branches. There was branding done at those branches. Tickets were discounted or given away as prizes for contests. “Nevertheless, last year things were done at the last moment. We couldn’t activate well. This time planning started well in advance. A premium watch brand might not want too much activation. It might want to be in the VVIP area. The Ace Group wants to reach out to a certain audience,” he added.
Short-term deals: Deals are for one or two years. “All the deals are for either one or two years. As a franchise we are not comfortable with a three-year deal as there are many variables. The league might become bigger than anticipated and then you don’t want to be in a situation where you have undersold.” From next year though, the franchise might look at doing three-year deals.
Noting that the ISL is in an aspirational sport, Blah said, “It is a metro-centric sport. But in the first year, a large chunk of viewership came from smaller towns. That is because you have Bollywood and entertainment entities involved in the ISL. The good thing is that the ISL is not as cluttered as the IPL in terms of the number of brands that are on it.”
He is clear that the franchise does not want to associate with brands that do not share the brand values that co-owner Ranbir Kapoor stands for. “The team stands for the spirit of Mumbai. Ranbir Kapoor stands for cool, the youth of India. We will not associate with a fairness cream brand, though we have received offers from that category. Kapoor will never endorse them and neither will the club. Alcohol is as of now a no. We are also not interested in companies that one has not heard of or that don’t have a good reputation.”
More categories: He also said that his franchise and the ISL are broadening the categories that use sport. “We will have partners and sponsors who have never been into sports. You will not think that there is a direct connect in sports for them. But we have worked innovatively.
“We are tying up with a cab company to have a shuttle service to the stadium. We are also doing innovative stuff through Western Railways. The idea is to make sure that we are visible and attract eyeballs. We need to shock the audiences in a nice kind of way. Sticking to traditional media like outdoor and print will only give you so much visibility.”
The franchise did not fare well last year. Blah, however, noted that the performance did not make it a challenge for the franchise to get sponsors and advertisers. “They were smart enough to know that the league stage was close. Besides, irrespective of the team’s performance, Mumbai is such a strong and important market for all advertisers and brands.”
Ticketing and hospitality: He is happy about the strategy that was followed in this area last year. The franchise’s aim was to keep ticket prices as low as possible so that more fans could experience matches in the stadium. “The lowest price is still Rs 125. We want younger people to come in. We are offering bulk discounts for schools and colleges. Ticketing will be similar to last year. For hospitality also, we will follow the same template as last year.”
Licensing and merchandising: He also expects licensing and merchandising to become a serious revenue-earner in the fifth year. A range of products have been created like caps, key chains, etc. Puma will sell the franchise’s jersey. But at the moment they serve a marketing purpose. “Last year, the revenue from this area was miniscule. This year, the area will see 100–200 per cent growth, but it will still be small compared to other areas.”
The big challenge: For him, the biggest challenge is that in the first year there was a novelty factor. “People wanted to know what the ISL was. They wanted to know why Saurav Ganguly and film stars were associated with the event. This year, there is no novelty. Everybody knows what to expect. So sustaining the interest of the audiences and getting at least similar TRPs to last year would be the main focus. In the second year, the product on the field is what it will be judged on.
He is confident of seeing better play on the field this year. In the last edition, big names were needed as it was the first year. This time around, the franchises have realised that it is better to get younger, active players who will improve the quality of football.
“I know that the quality of football will be significantly better this time. The marketing by all the clubs and Star has improved drastically. The proof will lie in the pudding.”
Marketing: The franchise has done a lot of grassroots initiatives in the lead up to the second edition of the ISL. “We have reached out to over 200,000 kids. We have done festivals, coaching clinics. We are sponsoring six leagues with various associations. We have also been active in various launches.”
The franchise has also been active on the digital front through Instagram and Facebook.
No need for two seasons: Recently a decision was taken to have two seasons of the Pro Kabaddi League (PKL). But Blah feels that the ISL does not need it. “Football is very different from kabaddi. The league is much longer at three months. It is physically exhausting for players to play a match every three days. It is not feasible to have two ISL seasons in a year.”
The other question is whether it is feasible to merge the I-league with the ISL. Blah is in favour of having one professional football league in the country. “My opinion is that sooner the country has one professional league the better it will be. Everywhere in the world there is one league. You can have feeder leagues and different divisions but you shouldn’t have two competing leagues as they will cannibalise and kill each other.”