Last week I travelled with my father and brother for a family/business trip to India. During this trip we had some free time where we had the opportunity to book some meetings with companies outside of the scope of our family business. A few of them included meetings with football and sports representatives in the Indian sports sector. This gave me a clear and broad view on the Indian football market which I will try to summarise in short.

The Indian football market is divided into two leagues, the ISL and the I-League.

First and foremost, it is important to note that the Indian football market is divided into two leagues, the ISL and the I-League. These are both the top-tiers of Indian football. The ISL was created 5 years ago and is the more commercial league where players like Nicolas Anelka and Tim Cahill have showcased their skills. It was founded in partnership with IMG and it is considered as the knock-out competition (knock-out is for example Copa Del Rey or FA Cup) in the Indian football system by the Asian Football Confederation. While the I-League is considered the normal competition by the AFC. The I-league is the older league that is running since 1996 and since 2007 under the current name. This league is known for its loyal fans and a great fan experience while the ISL is having difficulties to attract those supporters. Currently the teams of both leagues are losing money and it is an unsustainable format to keep two top-tier levels.

Why the clubs are losing money on a yearly basis is mainly due to three reasons. The three classic revenue streams for football clubs are not big enough to sustain the expenses of those clubs; ticketing, merchandising and media rights do not provide the clubs with enough financial in-flow. Firstly, not enough tickets are being sold. Secondly, merchandising is not profitable enough as clubs are not popular enough and good replicas can be bought for less than a euro easily on the streets. Lastly, the media rights, which are typically the biggest source of income for any club, are almost non-existent.

Media rights, which are typically the biggest source of income for any club, are almost non-existent.

This is because owners with a 33% stake are Fox Sports 2, former Star Sports, so directly the media rights are already owned by a broadcasting channel leaving the income from media rights almost to zero. The only income football clubs do have are sponsorships, but those alone are impossible to base your entire revenue model on.

The chance of success for an Indian football club currently is extremely low due to the current structure of the Indian football system and the lack of sustainable revenue streams. This will not change as long as these two factors remain the way they are.

Wondering what your thoughts are on the subject; what are your ideas about football in developing countries in Asia like India, China or Japan? Will they become the next Champions League or will it always be a competition where older players will move to for financial reasons?