Can Sanjiv Goenka unlock Mohun Bagan's commercial potential?

The late R.P Goenka was known as the take-over specialist and now with the latest decision to merge ATK with Mohun Bagan, Sanjiv Goenka has followed in the footsteps of his father.

Sanjiv Goenka like his father has also mastered the art of turning around moribund companies - whether it was HMV, CESC or Spencer’s Retail. All these companies were sick and ailing when he took charge. Over the past decade through various initiatives, all these businesses have flourished and become profitable ventures.

Though Mohun Bagan has struggled financially in recent times, it is still a much-loved brand and has a huge potential value that can be unlocked by the right strategic investor. It has a huge fan base spread across the globe and is an iconic brand in the Bengali cultural landscape.

Despite being the most successful football club in India, commercial success has eluded the club. Therefore, apart from sporting success, commercial development of the iconic brand is the biggest challenge for Goenka.

Within the commercial revenue sector, Goenka can hope to monetise the Mohun Bagan brand via three revenue streams - gate receipts, sponsorship, merchandising and apparel.

In fact, financial success and success on the pitch go together. Having realised that, Goenka has invested heavily in building a team capable of challenging for top honours. The arrival of marquee names such as Roy Krishna and David Williams from the A-League is a statement of intent from the Goenka regime.

If we consider the relationship between revenues and performance, a much clearer picture emerges. In fact, there is a systematic relationship between the two. As the performance of the club improves, revenues grow as a result of increased attendance, higher ticket prices, as well as increased sponsorship and merchandising.

Bengaluru FC's commercial success has been dazzling

The commercial success of Bengaluru FC is therefore worth studying. Bengaluru FC have risen to the top of the rich list because of their ability to do commercial contracts that are comfortably in excess of their peers. While other ISL teams are struggling with selling their sponsorship inventory, Bengaluru FC has 15 brands on its sponsorship roster. The club’s landmark 4-year sponsorship deal with Korean automobile manufacturer Kia Motors believed to be in the region of $ 7 million is a significant first for any Indian football club.

Ultimately, other clubs can use Bengaluru FC as the precedent. There is a market for success. At the margin, fans and sponsors are attracted by success. Success on the pitch has contributed to Bengaluru’s phenomenal commercial growth.

On the other hand, what makes Mohun Bagan’s commercial failure an interesting case study from a business perspective is that it hasn’t managed to make money despite being such an iconic brand. Perhaps, it needed a canny businessperson like Sanjiv Goenka to unlock the true commercial potential of the brand.