Long-term deals: Transfer fee hike signals change in approach to Indian football

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In the 2019-20 Indian Super League season, clubs spent Rs 1.4 crore on transfer fees. This number rose to Rs 9.5 crore in the 2020-21 ISL season.

By Shashank Nair

In the 2019-2020 Indian Super League season, clubs spent 1.4 crore on transfer fees. This number increased to 9.5 crores in the 2020-21 ISL season. Amid the ongoing Indian Premier League auction, those numbers pale in comparison. But the rise in transfer fees is indicative of a change in approach to Indian football, and in particular clubs who are now trying to create a business model based on the European football market.

Take the case of Mumbai City FC. The club was recently bought by City Football Group, owners of English Premier League champions Manchester City. In their first transfer season, Mumbai City spent Rs 1.76 crore to acquire the services of French-Moroccan midfielder Hugo Boumous from FC Goa. A season later, Boumous was sold to ATK Mohun Bagan for Rs 2 crore and reportedly signed a deal worth Rs 12.5 crore spread over five years to stay at Kolkata.

There are two noteworthy incidents that have happened in the past two years in this particular transfer. Firstly, instead of the norm of one or two year contracts, most Indian Premier League clubs are now considering tying players to longer contracts. Earlier Indian clubs would sign a player on a one-year contract and were only in the market for free agent signings.

Second, it opened up the idea of ​​player resales becoming a real revenue generator for already cash-strapped Indian football clubs. In an ecosystem where there is no incentive to create quality football players and where more and more clubs are under the weight of financial constraints, the idea that these football clubs are selling the best assets or buying the best another club’s assets to maintain a healthy cash flow has long been wrong, but welcome now.

One of the main ways clubs are currently working in the transfer market is to sign young players with potential for long-term deals. Once again, Mumbai City FC have taken the lead in this, signing 21-year-old Apuia Ralte from NorthEast United FC for a fee of 2 crore for a five-year term in the 2021-22 season and recently signing winger Lallianzuala Chhangte. to a six-month loan that becomes a three-year contract. They paid an undisclosed sum for a player who had just six months left on his contract, rather than risk the parent club convincing the player otherwise.

While a flow of money between clubs could be a possible boost to Indian football’s economy, it needs to be built on a base of quality footballers – players who have largely escaped India’s system. In 2020, the All-India Football Federation came up with a new structure which went under the radar.

This concerned the notion of training allowance and solidarity payment. Take the case of NorthEast United FC. They invested in training and playing time for Ralte, who then made a big money move to Mumbai City FC. If Mumbai makes further inroads and sells the player at a higher price, the concept of training compensation and solidarity payment would mean that a percentage of Ralte’s future transfer fee would go to NorthEast United FC, who discovered the player and provided training and exposure.

This incentivizes a club like NEUFC, which struggles financially among giants like Mumbai in the league, to invest in young players and good coaches for junior levels and build a different business model in the league – that of a feeder club. .

In the 2020-21 season, revenue from the sale of players increased from Rs 1.6 crore to Rs 2.6 crore. Incentivizing clubs to produce quality players not only tries to improve the level of Indian football – a huge problem that exists in the country and continues to plague it internationally – but helps clubs not only at league level but also at the state level to start a business.

Why has the concept of long-term contracts, coupled with a system of buying and selling, never been the norm? Indeed, most club sponsorship deals were structured on an annual basis and the financial stability of clubs relied solely on their ability to bring in these sponsors.

Many ISL clubs today have diversified their sources of income. Non-fungible token (NFT) partners, game partners, and various other types of sponsorships are routinely tied into long-term agreements. Instead of working on a yearly basis, the idea of ​​starting a business with multiple sources of income is slowly starting to take hold in the league. Although it is still not enough, it is a start in trying to solve the problem of running a football club in India. This latest iteration of the average ISL club’s attempt to create an acceptable business model has come at some cost. Delhi Dynamos had to relocate to Odisha where they were renamed Odisha FC and came under the Odisha government. Mumbai were a cash-strapped side until City Football Group came along. FC Pune City was shut down and Hyderabad FC came in its place. Both East Bengal FC and Mohun Bagan joined ISL from the I-League, but Bagan had to be merged with existing ATK club Kolkata ISL, while East Bengal continue to struggle in their attempts to find a long-term main sponsor.

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