SUNBURNT TERRACE: Sports18 can be key to the transformation of ISL and Indian football

THE RELIANCE GROUP IS taking the next step in sports broadcasting with the launch of the network Sports18, and the move may have unlocked a windfall for Indian football clubs.

No, that's not an exaggeration or clickbait. What we're looking at is a medium to long term prospect; not something that will happen overnight. But a confluence of events - in terms of sports, corporate moves and evolving technology - are shaping up in a way that may turn one of the wekanesses of Indian football into one of its strengths.

Here's what we know: The Viacom18 group, where Reliance are majority shareholders, are going to launch the Sports18 network which may eventually have multiple TV channels. The launch is expected to be around mid-April. They have reportedly already got the FIFA World Cup 2022. FSDL also have the rights to AFC events like the Asian Cup, AFC Champions League and AFC Cup, which may end up here since Star Sports have not been very enthusiastic about them in the past. Viacom18, meanwhile, have the likes of La Liga and Ligue1 which may also find a home in this network.

That's just on the football front. They are also going to become a major contender for the rights to lucrative cricket events like Indian Premier League and ICC tournaments.

But the emergence of Sports18 has some special significance for Indian football. And that has to do with the concepts of 'vertical integration' and 'targeted marketing', coupled with the Reliance ecosystem and the recent structural changes initiated in Indian football.

For as far back as memory goes, Indian football has suffered from a 'pocket problem.' That is, football and especially domestic football is very popular in certain parts of the country (Like West Bengal, Goa, Kerala, Mizoram etc) but it does not yet have a national appeal the way cricket has. This has created problems ever since the National Football League was launched in 1996.

Unlike shorter, single-venue tournaments like Durand Cup or Federation Cup, a national level league is a huge undertaking for a broadcasting network. It runs for months and crews have to be sent all around the country to produce the matches. At a time when sports channels were monolithic national-level entities, they needed to attract nationwide viewership and national level sponsors which was not happening with Indian football.

And not only that, there was also a stark difference between football and the current number one popular sport cricket when it came to advertising. While a 50-over cricket match could show hundreds of advertisements through its course, football only had room for a couple dozen. So, when seen through the lens of national television, football just was not an attractive option. Pair this with Indian football having rampant mismanagement, poor scheduling and unreliable broadcasters like DD Sports (Poor quality, unreliable telecast) and Zee Sports / Ten Action (Low reach, bad priorities like ICL) and the domestic sport was stuck in a place where it could find no growth.

It wasn't until the DTH companies popped up that sports channels became interested in more niche properties. Because now, they could envision a business model that depended less on advertising revenue and more on subscription fees. And with time, as streaming platforms came into the picture, it further reinforced this model.

The game for sports broadcasting was changing. Now it wasn't just about selling the maximum number of ads during a live event. It was also about having attractive live events all around the year so that people stay subscribed. This transformation is what gave birth to the gigantic Star Sports network (And its OTT extension in Hotstar) that we see today, with a diverse portfolio of exclusive domestic leagues.

Not everyone could be an IPL. But they could be a complementary feature for when cricket wasn't on.

And for Indian football, this new model also solved a different massive issue that hindered its commercial attractiveness: the demographic paradox in TV ratings.

In the pockets where Indian football was popular, it had some really fantatic core fanbases that brought in large numbers of eyeballs. But the problem was, this viewership was seldom reflected in the ratings. Because there was an inherent flaw in the methods that ratings providers used to measure viewership. Their boxers were installed more in the metros and otherwise "mainstream" areas that big advertisers liked to target as their prime demographic. Places like rural Goa, Kerala, Bengal, Jammu & Kashmir etc got little or no weightage.

For example, when Aizawl FC were on their iconic I-League title run, the whole state of Mizoram was stopping on their tracks and watching the matches. But that didn't move the ratings needle by much. Because a small state with a populace that had very different spending habits than the Bollywood-watching, cricket-loving mainland Indian middle class got largely ignored by the ratings system.

But in the online world, this flaw does not exist. In fact it gets turned upside down. Hotstar is very popular in the North-Eastern states because they're full of football fans who watch the Premier League. And states like Goa and Kerala, who have always had their own cultural beats that differ significantly from the Hindi belt, have a young, educated population who love football and live online.

So, all of a sudden, these small states with tremendous passion for football have become significant assets for broadcasters, due to the equal playing field they got for the first time thanks to the internet. And Indian football's "wrong demographic" problem is suddenly a strength, because the sport now holds the key to reach these rising, trendy groups that lead the country in online content consumption.

Now, pair that with the possibility of targeted advertising during live sports events.

When sports channels were all catering to a national audience, the advertisers were also appealing to the same scale of consumers. So there was no way with the existing technology for a company to target a smaller audience in a particular region.

But with online streaming, that's very much possible now. Advertisers can not only target by region but seek out their audience directly by their watching preference, and for much cheaper. So, targeted advertising has now opened the market to smaller advertisers.

That means, more advertisers will enter the market and as more viewers move from TV to the internet, the broadcasters can play the volume game and make a killing.

Add to that the fact that Indian football isn't even close to reaching peak popularity. So, broadcasters looking to go beyond cricket see football as one of the best bets.

And that, PR aside, is why FSDL entered Indian football in 2010 and the Indian Super League was established in 2014, not before.

But how does Sports18 fit into this picture? And how will they be any different from the current ISL broadcasters Star Sports, who also happen to be minority stakeholders in FSDL which organizes ISL?

Well, that's a more complex question. But let's take a crack at it anyway.

One of the theories that have been popular with sports broadcasters is "vertical integration." What this is, is basically, the owners/organizers having a fully streamlined control over their content: from the venue, to scheduling, to producing the broadcast for TV/internet all the way to the distribution of the content directly to the consumer.

A popular example of this can be found with the Mixed Martial Arts promotion Ultimate Fighting Championship. The UFC have built a system where they own the venue for their events (UFC Apex), the production crew, broadcasting system as well as the distribution platform (UFC Fight Pass). They do deals with other broadcasters for reach and revenue, but their own vertical system works as an insurance and long term security for their product. If they lose everyone else, they'll still have a way to reach their audience all by themselves. Elements of this came in handy during the COVID-19 pandemic. When sports around the world had to shut down, they kept holding events and raked in record revenue.

Even in ISL, we can see a version of this system with Star Sports, co-owners of FSDL, broadcasting the league. This helped ISL launch with a bang, attracting a lot of investment due to the guarantee of multilingual prime time telecast on Star Sports for 10 years.

But, now that ISL is an established brand with clubs that commit to the sport long term, certain flaws in the existing financial model have become apparent.

To put it bluntly, neither the clubs nor the organizers are making money. And keeping the ISL broadcasting rights away from the market is not helping the cause. The price for the rights to IPL, Pro Kabaddi etc are skyrocketing. Domestic sport properties in India are on a crazy bull run as more companies like Amazon etc enter the broadcast market. But ISL is stuck in a situation where they are not benefiting from the ongoing gold rush, and their clubs are not getting any share of the TV revenue.

So, the theory is, when the ISL rights go up for sale in 2025, Sports18 will swoop in, outbid others (Including Star Sports if they are still in play) and bag the property.

Which raises the question, why? Why would the FSDL's majority shareholders try to take over the ISL rights from their own minority shareholders?

The answer, perhaps, may lie in the structural transformations that are taking place in Indian football.

The ISL of today is nothing like the ISL of 2014. It's the top division league now. And from next season it will start implementing the promotion-relegation system which will connect it to the rest of Indian club football, all the way down to state level.

The top clubs from the second tier league (Named I-League, League One or whatever re-branding AIFF/FSDL come up with) will get promoted to ISL and the bottom clubs will get relegated to the second tier. But, relegation is a scary prospect for some of the club owners in ISL, who may consider shutting down if they go down to the lower tier. So, for the first time, FSDL have an incentive to make the second tier league an exciting, well-promoted and commercially viable product, to make sure the relegated clubs stay committed to the sport.

But, this is not a task that Star Sports have been keen about. Their interest in Indian football is pretty-much ISL-centric. In the past, they picked up the I-League broadcast rights but that didn't go well. They reserved the evening prime time slots for ISL and stuck the I-League in Star Sports 3, their new channel that had very low reach at that time. This led to the I-League clubs demanding a different broadcaster and Star was more than okay with that.

So, as things stand, FSDL are already having to look beyond Star Sports to fulfill their duties as the commercial partners of the AIFF. They have brought in 1Sports for I-League, which is more of an interim solution. A number of the national team's matches are going to other networks, too, like EuroSport who recently showed the SAFF Championship.

This means Sports18 are the perfect solution to their existing problems, as this network, along with its online streaming platform (Voot and/or Jio TV), can beome a larger broadcasting partner that plays a wider role in the whole Indian football ecosystem. They can be the reason clubs land lucrative 5 year shirt sponsorships because even if they get out of ISL, they'll still be live at prime time on the same network. This system will work as a parachute for current ISL clubs and a platform for building up future ISL clubs. And this role, this "vertical integration" across all of Indian club football, works best if Sports18 have the rights to ISL.

But this is not just a one-sided beneficial move for Indian football. It's also beneficial for FSDL, Sports18 and the majority stakeholders of both: the Reliance group.

Why? How? Well, this is a speculation on my part but, what if Reliance want to take the idea of "vertical integration" to the next level? What if they want to become the league organizers, the TV producers, the broadcasters, the consumer connection providers (Through Jio internet and DTH services)... as well as the advertisers?

Think about it, with Reliance's large bouquet of products that target big and small customer bases across all regions of India, don't they stand to benefit the most from 'targeted advertisement'? And if they are to get into that, wouldn't they want to own the platform so that they have full control over customer data and the algorhithm as well?

They will still be open to all potential advertisers. But few can utilise Indian football to sell products like Reliance. In fact, if they control the whole broadcast ecosystem, they can even sell their products through local leagues; which can be produced with a much smaller budget and customized to reach a more niche market, which is a perfect environment for targeted marketing through a streaming platform.

This is not a far-fetched idea. Many around the world have theorised this ultimate organizer-broadcaster-advertiser synergy. But few can actually pull it off and Reliance is one such conglomerate.

Will it happen for sure? A lot of things need to fall into place. The AIFF, for example, will need to renew their commercial partnership with FSDL first. If that doesn't happen, all of this falls apart.

Luckily we have some positive signals on that matter. In the AFC-FIFA roadmap report on restructuring Indian football, the continental body praised FSDL's role in Indian football and fully recommended an extension of their deal with AIFF. And then they themselves entered a partnership with FSDL. So, FSDL staying involved in Indian football is as certain as it gets.

But are there other ways we can know that FSDL and Reliance are moving in this direction? This is another speculation, but I believe a great indication of Sports18's future prominence in Indian football would be FSDL's interest in local leagues or state associations. In fact, if I had to make a prediction, I'd say that FSDL will become the commercial partners for one or more prominent state leagues in Indian football before 2025. And the matches will end up being broadcast on a Reliance-owned platform, whether TV or streaming.

This can be the best possible commercial booster for Indian football across all levels. It's rare, in the absence of a unicorn league like IPL, to find a solution that suits everyone in a complex ecosystem with hundreds of stakeholders like Indian football. But this, in theory, is one system that can work.

And if it preserves the meritocratic competitive spirit across all divisions, and the clubs make a bit more money from it and get more confidence to stay and invest in the system, that's the happiest outcome one can hope for after the prolonged period of turmoil that Indian football has gone through.

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