Vijay Mallya plans to combine sports interests into single entity

Ashish Khurana - Televisionpoint.com | Mumbai
Vijay Mallya, chairman, United Breweries (UB) Group, plans to combine his sports interests into a single entity and explore a possible listing on the stock exchanges.

The proposed entity will combine assets like the Force India Formula-1 team, Royal Challengers Indian Premier League (IPL) team and ownership of football clubs East Bengal and Mohun Bagan.

Currently, these assets are spread across the group and some, like Force India, are parked outside the beer-to-airline conglomerate. The move, still at early stages, assumes significance, as it could well be the first publicly-held sports company and the only Indian corporate with assets across major sporting fields.

Mallya, however, refrained from getting into any specifics, including the possible valuation of his sports assets, stating that it was too premature. Mallya's remarks come weeks after Force India clinched its podium finish at Brussels and Royal Challengers figured in the title clash in this year's IPL season.

While Force India is an international company owned by Mallya in his personal capacity, Mohan Bagan and Royal Challengers operate under United Spirits and the East Bengal team is held by United Breweries.

Royal Challengers Sports Private, which had posted break even last season, could post profits this year. "We will make profits this season, but are still in the process of taking into account the impact of Champions League on revenues and cost," says, Amrit Thomas, executive vice-president, marketing, United Spirits.

Analysts said while IPL could be an immediate money-spinner, others including Force India would be more futuristic in their potential. Being a global property, F1 could turn into a larger revenue engine for UB with global advertising revenues now increasing and sponsorships being at a premium.

UB's interests in football are a long haul. Notwithstanding the growing popularity of English Premier League in the country, the sport has not evolved as a revenue generator in India yet. Much of this is based on the fact that gate collections are negligible and there are hardly any broadcast revenues or licensed merchandise.