Coronavirus lockdown: JSW Sports, owners of IPL and PKL teams, see 30% impact on business in 2020

The impact of not having IPL this year will be big as the league is a massive P&L (profit and loss statement) for the company, said the JSW Sports CEO

There is no sign of the Indian Premier League (IPL) happening this year and it looks like the Pro-Kabaddi League (PKL) will also be delayed due to the coronavirus lockdown.

This is why JSW Sports, the company which owns IPL’s Delhi Capitals team, PKL’s Haryana Steelers and Bengaluru FC in the Indian Super League (ISL) is estimating an impact on its revenues.

“We are expecting revenues to be taking some hit during the course of this year. While it is still early to quantify an exact impact on business, we are bracing for a 25-30 percent impact on our numbers this year,” Mustafa Ghouse, CEO of JSW Sports, told Moneycontrol.

While 2020 is filled with uncertainties, 2019 was a good year for the company, especially when it comes to cricket.

“Delhi Capitals’ performance on the pitch was strong, so were the revenues. Because of the performance, sponsor bonuses kicked in and we earned more. Then there was play-off bonuses for taking the third place in the league,” he said.

The team in the top spot gets an additional revenue of around Rs 39 crore and the payouts drop by Rs 5 crore for every subsequent rank.

With the additional payout, IPL rights revenue, ticketing and sponsorship revenue, an IPL team’s revenue stands in the range of Rs 120 crore to Rs 140 crore.

This is why Ghouse said the impact of not having IPL this year will be big as the league is a massive P&L (profit and loss statement) for the company.

Coming to PKL, which is usually scheduled during the July-August period, may also get delayed due to the pandemic.

“One challenge with PKL is that it is a contact sport. So, other guidelines and measures will be required. But the good thing is that aligning schedules with other country's players is not required,” said Ghouse.

However, he thinks that sponsorship will take a bit of a hit.

“Ticket sales is not such a big part of revenue because the stadiums in Haryana, that we play in, are not very big. It is 2,000-3,000 capacity venue. Plus, ticket pricing is not high. Hence, sponsorship becomes one of the major sources of revenue," he said.

According to a GroupM report, central sponsorship of PKL in 2018 saw brands contributing to the tune of Rs 90 crore.

While there is no certainty regarding IPL or PKL, the leagues have not been called off yet because there is a lot riding on these sporting events.

Hence, many are suggesting to let these leagues happen behind closed doors. Although ticketing revenue will be a lost opportunity, broadcast and sponsorship revenues can still be saved.

Along with many sporting leagues, coronavirus has led to the delay of this year’s Olympics, which has been pushed to 2021. This means a year-long wait for the athletes.

JSW Sports, that also has an Olympic training academy called Inspire Institute of Sport, has athletes from different sport disciplines including boxing, wrestling, judo, athletics and swimming.

“Dealing with the athletes was the trickiest. First, there was a lot uncertainty around Olympics and during that time there was anxiety, frustration. When there was clarity around Olympics, those who had qualified were at ease because they know what they are heading for. But the ones who were in the process of qualifying are the ones who are still in a delicate position,” he said.

He added that the company is helping the athletes with sessions with psychologists and coaches. “Lot of them are stuck in their hometowns with limited technical training. So, it is challenging. Everyone is trying to find a bit of rhythm.”

Talking about the new normal for sports, Ghouse said, “For the time being, it (sports) will be played behind closed doors and the stadiums will remain empty. Players and coaches will be seen with their masks on and everyone would be watching sports on TV.”

He also added, "There will be a lot of questions on leagues that excessively need travelling. Such leagues will take a lot more time to get back on track. Domestic leagues will find a way back with some revenue losses.”

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