Amid mounting losses, Kolkata’s storied Mohun Bagan Athletic Club is looking to bring in actor Shah Rukh Khan as an equity partner in its football team, snapping ties with liquor baron Vijay Mallya.
Mohun Bagan, one of India’s oldest sporting clubs, wants its team to take part in the Indian Super League (ISL), and so wants to shore up its financial strength, according to two key club officials, who asked not to be named.
Talks are on with at least two potential partners including Khan, they said, adding the actor wants control of the football team, but the 127-year-old club is only willing to sell a minority stake.
Mohun Bagan’s general secretary Anjan Mitra said the club is exploring various options for its football team—which is a privately held company—and that things were likely to materialize only on conclusion of the ongoing I-League football tournament.
“Till then, I cannot discuss specifics,” he added.
Venky Mysore, chief executive officer of Khan’s Red Chillies Entertainments Pvt. Ltd, did not answer calls or reply to text messages.
Mallya wasn’t immediately available for comments.
Khan is already deeply invested in Kolkata: he is not only West Bengal’s brand ambassador, he is also the promoter of the Kolkata Knight Riders cricket team.
Back in 1998, Mohun Bagan spun off its football team into a separate joint venture with Mallya, who currently owns 49.99% of United Mohun Bagan Football Team Pvt. Ltd. The club continues to remain a registered society.
The arrangement was aimed at securing long-term financial support from Mallya’s UB Group. United Spirits Ltd (USL) was its principal sponsor, until the company decided to stop backing Mohun Bagan in November 2014.
By then, Mallya had ceded control of the maker of McDowell’s whisky to Diageo Plc. USL didn’t have any direct interest in Mohun Bagan’s football team—Mallya had bought stake in it through one of his private firms—and in November 2014, USL’s shareholders voted in support of a resolution to stop sponsoring the football team.
By then, USL had already scaled back funding and things had started to tumble downhill.
In fiscal 2016, the Mohun Bagan football team’s loss widened to Rs1.12 crore—perhaps the worst ever—from Rs24.52 lakh in the previous year as revenue dipped from Rs12 crore to Rs10.87 crore, according to regulatory filings.
To stay afloat, the team has taken unsecured loans of Rs3 crore from one of its directors, and Rs2.21 crore from the Mohun Bagan club.
In January 2015, after USL severed ties with Mohun Bagan, the club’s top officials—Mitra, Debashis Dutta and Swapan Sadhan Bose—stepped down from the management, making way for a new team to take over.
It came to light at that time that the club didn’t directly own shares in its football team, and that four people—Bose, his son Srinjoy Bose, Mitra and Dutta—privately held 12.5% each of the Rs1 lakh paid-up share capital.
If Mallya refuses to transfer his shares in this company, it may be wound up or mothballed, according to Mohun Bagan officials.
Mitra had in January 2015 said that he and others would transfer their shares in the football team to the successors at the club, but Mitra and Bose, who has been the club’s president since 1995, were not allowed to quit.
In every financial crisis, it was the president who stepped in to rescue the club and its football team, said the two unnamed officials cited earlier.
But ISL is a different league altogether, and if Mohun Bagan is to build a team strong enough to compete in the IMG-Reliance Industries Ltd-backed tournament, it needs to sort out its finances immediately, they added.
There’s also a possibility that the All India Football Federation could eventually merge the two leagues, ISL and I-League. The next edition of the ISL is due in October.
Mohun Bagan has already done most of the spadework to join ISL. It only needs a strong sponsor, the club officials said.
Because ISL allows only one team to be fielded from one city and Kolkata already has its Atletico de Kolkata, Mohun Bagan could represent West Bengal’s Durgapur town, they added.