*Written by Arnav Joshi
Introduction
Since the Indian Super League’s inception in 2013, India had been the only country in the world operating two top tier football leagues parallelly. However, from the 2019-20 season, the Asian Football Confederation (AFC) working with All India Football Federation (AIFF) and Football Sports Development Limited (FDSL) announced a merger between the Indian Super League (ISL) and the I-League. (1) The implication was that the ISL will attain the status as the top tier football league in the country and I-League demoted as the second tier. AFC has also planned a pathway between the ISL and I-League by introducing a process of promotion and relegation between the two leagues. This roadway to reform domestic football in India looks identical to the structure followed in some of the world’s most successful leagues. Among these is the English Premier League (EPL) which is the most widely followed football league worldwide and hailed as the strongest league both on and off the field. While ISL seems similar to the EPL with regards to its ambitious aims, there are still gaping differences between the two leagues concerning governance, league structure and day to day operation. This article attempts to draw a comparative analysis between the Indian Super League with the English Premier League by exploring the following key characteristics of the two leagues which are distinctive:
Broadcasting Revenue
Governance Model
Open/Closed League Structure
Income Inequalities among Clubs
Broadcasting Revenue
One of the primary sources of revenue generation for any football club in the world is through selling broadcasting rights for its matches. In fact, broadcast revenue is one of the first ways in which sports has been commercialized resulting in the multi-billion-dollar industry which it is today. The Premier League since breaking away in 1992 has set the benchmark in generating broadcasting revenue and implementing an aggressive re-distribution policy for this income. Along with this, policies such as “no single buyer,” “equal distribution of income” and the collective sale of TV rights by the league are some of the factors which contribute to a strong central revenue pool for the league. (2) In India however, the situation is completely the opposite. STAR India being one of the co-founders and owners of the league, does not have to pay any fee for television rights. This lack of income capitalization does not do justice to the ISL being the fourth most-watched league in the world.(3) The absence of any kind of broadcasting income means that clubs have are dependent on matchday income along, individual sponsorship agreements and a share of the central revenue pool. Serious questions have been raised with respect to the league’s sustainability as a result. So while Premier League clubs receive 46% to 88% of their total income through Television and broadcasting rights,(4) Indian Super League teams have to operate without this revenue even though their broadcaster Star India reported earnings of around Rs.200 crore in ad revenue from the ISL in 2018. (5)
Governance Model
The governance structure of top tier leagues of their respective football pyramids is starkly contrasting. The ISL is operated by a Reliance subsidiary company named Football Sports Development Limited (FDSL). On the other hand, the Premier League itself operates as a corporation and is owned by its 20 member clubs. (6) While both governing structures represent a “Separate Entity Model”, the decision making power lies with different bodies. (7) In the Premier League, each of 20 club shareholders gets to vote on each issue concerning regulation changes and contracts. In this type of model, the association is usually less involved in the day to day operations of the league. The clubs are vested with greater power to control the league. For example for the 2020-21 season majority of premier league clubs voted against the proposal of having 5 substitutions in one game. (8) 10 of the comparatively smaller clubs voted against granting 5 subs which only goes to show the power vested with every team of the league regardless of its size. However, all member clubs have to act within the boundaries specified in the Premier League Handbook. (9) But, the FDSL is the only entity in power with respect to drafting/amending rules and regulations of the league. Stakeholders in this case get very limited power to represent their interests.
Although there have not been any agency problems in the ISL yet, there are certain chances of potential conflict of interest. This may happen when FDSL’s objectives and target may not align with that of a club(s). Chances of these disputes arising in the Premier League model is very restricted as clubs themselves are responsible for the operations and have appropriate representation to further their interests.
Open/Closed League Structure
Open league structure lays emphasis on “Equality in opportunity” in the sense that every local football club in the country has a chance to compete in the top tier league through a system of relegation and promotion with lower divisions in the pyramid. European countries generally choose to implement an open league structure as opposed to a closed league which is found in North American and Australian Sports. A closed league structure prioritises maintaining the competitive balance between every team by not allowing a system of promotion and relegation and grant new teams admission through bidding. The entry requirements to enter the league in such cases lies only in the hands of the governing body. There has been a long-standing debate as to which type of league model is better or more enjoyable to watch from an audience perspective. The Indian Super League is a closed league in which the number of teams is specified and entry of new teams is restricted. On the other hand, the Premier League is an open competition in which theoretically an amateur club may rise to the top tier by the system of promotion and relegation. Whilst, the ISL in the process of implementing a promotion and relegation structure, there is still sporting merit and national licensing criteria set out by the AIFF which clubs being promoted are subject to. (10) This means that the ISL might completely shift completely to an open league structure by the end of the merger, but it would be interesting to see whether any teams are prevented from being promoted due to any factors. A study published in the Journal of Industry, Competition and Trade concludes measure that open football leagues of Europe are dynamically less balanced than closed leagues in the United States. (11) By all means, this does not render any one of these league models to be inferior to the other but just lays down the difference in objectives to the other. The question of whether to implement a closed or an open league structure is an important one and hence all important stakeholders involved should be consulted in the process.
Income Inequalities Among Clubs
The English Premier League is renowned for its matchday uncertainty of outcome and is hailed as the most difficult football league in the world where “anyone can beat anyone.” The most important reason which enables the Premier League to conserve the competitive nature of the league is by using an aggressive redistribution policy for its central revenue pool to every side in the league. In the 2018/2019 season, league winners Manchester City earned only about 1.5 times more than the bottom-most placed side Huddersfield Town. (12) These numbers illustrate how equality is promoted among teams by giving them similar spending capacity. In the ISL on the other hand, there is a substantial income inequality among clubs. Clubs promoted from the I-League to the ISL in the future will not have to pay a franchise fee but will also not be entitled to a share from the league’s central revenue stream. (13) This could cause a severe imbalance and would disfavour the newly promoted clubs to the ISL. The fact that Bengaluru FC doubled their operating costs in the year they were promoted to the top tier indicates potential sustainability issues for smaller clubs who get the opportunity to grace the top tier of Indian football. A club with stronger financial resources, in this case, will undoubtedly have an extra edge over the others to finish up the ladder.
Conclusion
It is clear that there exist huge differences between the two leagues in terms of structure, governance, and competitive imbalance. The English Premier League is considered the best football league in the world owing to the key policy decisions it chooses to implement since its formation in 1992. The Indian Super League is comparatively very recently established and could certainly do better analysing some of the factors which are proven to work in leagues around the world. Financial sustainability is an issue raised by many experts and the recent merger with I-league only raises the question marks. FDSL has a crucial responsibility in ensuring that in the coming years, the ISL holds discussion with all stakeholders involved and take imperative actions to improve the quality along with off the field economic conditions of all the clubs.
*The author is a law scholar from Jindal Global Law School, Sonipat and an Associate Editor with Global Sports Policy Review.
(The image used here is for representational purposes only)
References
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