In sports, you must be gutsy enough to lose money before you make money: Ronnie Screwvala
The upGrad founder and sports investor on how the domestic sports ecosystem has shaped up since his first investment, in the Pro Kabaddi league in 2014
Kathakali Chanda
BY KATHAKALI CHANDA, Forbes India Staff
In sports, you must be gutsy enough to lose money before you make money: Ronnie Screwvala
Ronnie Screwvala, founder, upGrad, and sports entrepreneur Image: Mexy Xavier
Almost 10 years as a sports entrepreneur, what are your key observations about India’s sports leagues landscape?
India doesn’t need to be a sport-loving country as much as it needs to be a sport-participating country, because only if you play it do you start loving the sport. The reason why football is popular in Europe and the UK is because you always see a parent dropping their kids to football practice on Saturdays and Sundays. Not in India. We are not a sport-playing country, nor do we think it’s aspirational to have a career in sports. Now we are celebrating many of our sports people because they’re going out and doing that, but we don’t invest time and effort into it. That’s what the leagues do, they help make a career in sport by bringing attention to the sport.
Unfortunately, it also brings a sense of herd mentality, because if two leagues do well, several others come up. I love panja, but I’m not quite sure how that sport can become a league. But having said that, these akhadas have a massive following—thousands of people come to watch a match from a long way off. There is huge passion for that, and a league helps platform that passion. So, a league, essentially, gives platform to a sport.
When you first invested in sports, in a kabaddi franchise back in 2014, it wasn’t a top-of-the-mind sport. What convinced you to put your money?
For me, kabaddi was a disruptive idea because it was an underdog sport. It’s always challenging to back an underdog sport, and that’s the interesting part. When I understood the tweaks that were being made to these kabaddi games, it was fun for me to go out there and say let’s push it. In the IPL, the exhilaration comes from the fact that you are always down to the last over—most matches go down to the wire. Same with Pro Kabaddi. If we had done what happens to the sport at the Asian level, it would be very boring, and it wouldn’t work. We put kabaddi on the mat, we did a do-or-die round, which means after every two rounds you have to score. These changes glamourised kabaddi and made it a thrilling sport to watch. Of course, in those early years, it was a risk, but so was the IPL, where the franchises started making good money only after the first 10 years or so.
With 15-plus leagues, there are now scores of sports entrepreneurs. As someone who took to sports entrepreneurship in the early days, what are your big learnings?
Some people invest in sports teams because it’s a valuable proposition, for some others, it’s glamour. It’s also a bit of vanity to own a sports team, and I mean it in a good way because you need to be connected to a sport enough to be excited about owning a team. And, one fine day, it’ll create value. The next part is getting involved, and strategising to build a team. Finally, it comes to promoting the ecosystem. Like, the Pro Kabaddi league is just three months, how do you hold people’s attention for the other nine months? So, some have set up schools, teams are going out to host other kabaddi teams, organising mini tournaments so that you get quality new players for the higher levels. So, it moves from that initial excitement and glamour to strategising to build teams to building ecosystems.
The big challenge for most is you have to be gutsy enough because you are going to lose money before you make money.
Kabaddi was the rare exception to this, but then Star India, the broadcasters, bought equity stake in Mashal Sports, the league organisers, and screwed up the economics. Today, to me, kabaddi is a suppressed sport, primarily because Star owns it. To its credit, Star promoted the sport very well for the first five years and gave it a lovely platform. To their debit, a broadcaster owning a league just caps its value.
You have invested in three sports—kabaddi, table tennis and chess. What brings you bigger returns on investment?
Right now, kabaddi is the one that I’ve experienced the most, it’s a longer tournament, you get deeply involved. While you are not getting on the mat yourself, there is a lot of deep participation during the one month of camp. Table tennis, for me, was interesting enough when I got in there because it’s a fast sport, and then India’s pecking order changed on the global scale, lifting the profile of the league.
I chose chess with the upGrad hat on—at upGrad, an edtech upskilling platform, we are training everyone in strategy, teamwork etc, and it’s what you do in chess. The brand association for upGrad to the chess franchise was very clear, hence we called the team the upGrad Mumba Masters. There was a three-week window to decide if I wanted a chess franchise and if I hadn’t made the upGrad connect, I may not have gone for it.
We pretty much broke even in kabaddi right in the first year, and we carried on through Covid in a bubble, so the continuation helped us. Table tennis is only in its second year and we haven’t found enough sponsors yet. But in chess we have found a higher level of commercial interests and more sponsors, and the demand to own a team in chess is very high.
While chess is a very different sport from cricket, given the demand for the league that you are citing, do you think the Global Chess League can turn into an IPL-style success?
If you mean IPL, the multi-billion-dollar league, maybe not because the tenure with which you do a 12-day sports versus a two-month tournament is very different. Kabaddi, though, has the opportunity to be as big as the IPL. If it wasn’t for Star, it would have had three times the value of what it is today. Right now, every single rating for kabaddi is 40-45 percent of cricket; no other sport comes anywhere closer to that in terms of viewership. That’s why I call it a suppressed sport. If we can uncap its full value, it will be the closest to the IPL.
Chess is a solitary sport really. How do you turn it into a team sport in a league?
A lot of the credit for this goes to our CEO Suhail Chandhok, who also happens to be my son-in-law. If you watch their interviews, even our franchise members said they couldn’t believe chess could be turned into a team sport. For the first five days of the tournament, everyone was in their own rooms. And chess players are wired differently—you can high-five kabaddi players half an hour before the match; chess players are into a completely different zone two hours before their match, they will look through you. Chandhok actually managed to get them out of their rooms and get them to lunch and dinner tables, and take them to play cricket on break days. And this brings them to the point when they begin to play for the team. Like, look at the scoreboard and think, “Should I draw my game, since the team is already leading? I might push to win, but if I lose in that case, the team loses. If I draw, we’ve won already.” That’s teamwork.
Have you ever considered investing in cricket?
I did consider in the beginning, but now it’s too pricey a situation. I don’t think I am the kind of guy who would bid a billion dollars for the rights to own a cricket franchise. My fun with kabaddi was it was an underdog sport, and I wasn’t just one more person backing the sport. It feels like I’ve participated in its growth. Same in chess and table tennis. In cricket, you’ll always be at the background because there’s so much innovation happening at so many levels.
Q.How is scaling up upGrad similar or different to scaling up your sports franchises?
The market is very different. You have to monetise a business, but you don’t have to monetise a team—that’s only about advertising and popularity. These are two very different contexts. When you are looking at the space of learning and skilling, the market is 100x of even the IPL. It’s a very, very large space. You are not a team player or a part of an ecosystem—you are the ecosystem. In upGrad, I am market-making in every single segment; in sports, I’m as good as the league, and the league has a specific timetable. Once it’s over, everyone goes back and starts from scratch the next year. So, both have a different DNA.
But, in terms of similarities, strategy, thinking big and market-making. Like, with kabaddi, we feel we’ve made the market for it.
The Times of India