East Bengal, which sold 76 percent of its stake to Shree Cement, is now owned by the cement maker and power producer.
A few days before his birthday, a top official of East Bengal Club wrote to members and anyone he could think of, anyone who had the cash and power to help the Kolkata-based club drop its current owner.
The appeal from club general secretary Kalyan Majumdar was sent on a sweltering late summer afternoon this week.
East Bengal, which sold 76 percent of its stake to Shree Cement, is now owned by the cement maker and power producer. Shree Cement is a listed company owned by the Bangur family who originally hail from Rajasthan.
The letter, a copy of which is with this reporter, has gone viral, indicating a grave sense of helplessness that had gripped the 100 year plus-old club, whose supporters fondly tag it as India’s Real Madrid.
It does not mean East Bengal is India’s best soccer club. Its performance has floundered for the last two years. And the club has a huge crisis going on with its owners.
A series of troubles
Knots within knots have gripped the club, synonymous with its boisterous fans across the world and red and yellow jerseys that always look very bright. The club has over 45 million fans, the highest in Asia.
East Bengal management is now saying it does not endorse the term sheet agreement it signed with Shree Cement and handed over 76 percent ownership of the club to the cement and power maker. Majumdar has not made the term sheet agreement public. He and others in the club have said they are not agreeable to a host of issues listed by Shree Cement.
In the corporate world, refusal to sign a term sheet agreement after a legitimate sale is considered sacrilegious.
The corporate giant has already invested Rs 55 crore for the club in the first season last year. Shree Cement officials say the investment got virtually nothing in return because Indian Super League (ISL) matches were played before barren stadiums to suit COVID-19 protocol. In short, it means no gate money. If the crowds were there, the owners could have picked up a decent Rs 10 crore through ticket sales from 10 home matches.
But it did not happen.
Prestige vs Cash
Now officials, who run the club and have been associated with it for ages, have turned around to say prestige is more important than cash and they are not liking what they claim is a stepmotherly treatment from Shree Cement. They have even gone ahead to say they - actually - do not need Shree Cement. It is almost like selling a company and yet, refusing to vacate the building.
“I want help from anyone and everyone, we are being pushed to the wall by our owner who is demanding the moon,” Majumdar, who wrote the letter, told MoneyControl.
Majumdar said Shree Cement has put a lot of conditions which are unacceptable to the club management. Shree Cement has the club’s sporting rights as well as all of its assets and properties.
The club management has not signed a final, binding agreement. If the signature does not happen, Shree Cement could walk away. A previous partnership of the club with Quess Corp, a listed company, also ended up in a mess.
And if Shree Cement leaves East Bengal, it would demand its cash back. East Bengal, clearly in financial doldrums, does not know what has hit them.
Emotions are running high in Kolkata. Some officials of East Bengal sought an audience with Chief Minister Mamata Banerjee but she refused to intervene. Many in the city claim it was Banerjee who helped East Bengal get a big company which would take over the club.
“The company is - actually - telling us to leave the club and walk away. We will not. We will raise cash and run the club,” Debabrata Sarkar, a top official of the club, told MoneyControl. He did not say how.
Sarkar said the club’s prestige can never be bought with peanuts. “If East Bengal club is up for sale, then the tender paper would be worth Rs 2,000 crore. East Bengal has not pawned its prestige. The club is not for carpetbaggers.”
The current slugfest - claim insiders - over the term sheet agreement is around a clause that says trespassers into the club could be prosecuted. And that the club will hand over all its properties including the club tent, players' locker rooms, cafeteria, and souvenir shops. Some of the club officials are worried about what will happen if the new management calls them trespassers and gets them arrested.
There are other issues. Shree Cement wants to change the name of the club to SC East Bengal. On paper, it looks normal. After all, Mohun Bagan AC has also changed its name to ATK Mohun Bagan. And then, East Bengal was once Kingfisher East Bengal, then Quess East Bengal. So what is the issue with SC East Bengal?
“With SC East Bengal, the club’s character will change. We will not allow that. There are high chances that Shree Cement people can have us arrested. They are saying we need to vacate everything and walk out. We will not, the club is our mother,” says Sarkar, the club secretary. But it holds little water against a watertight term sheet agreement signed by the club and Shree Cement.
Sarkar said the club officials will not sign the final agreement, further deepening the ongoing crisis over transferring of sporting rights. Sarkar said he was aware that the move could jeopardise their participation in the top-tier ISL.
“If we sign the agreement, members will lose their fundamental rights, where the club will be permanently handed over and we will lose the right over ground, logo, tent,” said Sarkar.
But without cash, East Bengal is a car without fuel. Worse, Quess walking away and Shree getting into a logjam with the club management is not good news for future investors.
Shree Cements, incorporated in 1979, is not a pushover company. It is one of India’s top cement manufacturers in northern India and has a market cap of over Rs 100,000 crore. It is also in the power business.
So shafting Shree Cement would not be easy for East Bengal. The logjam has caused anguish to millions of supporters, and also current and former players.
“Can we stop this routine bickering and get back to football. The game must go on, I really do not know what is there in the agreement that is causing such a crisis,” wrote former East Bengal defender Manoranjan Bhattacharya in Sangbad Pratidin, a top Bengali language daily.
The slugfest is a big blow to the prestige of East Bengal players and supporters. In a recent WhatsApp message, a fan asked the club president what it takes to run the club. The president replied: Cash. The supporter retorted: If there is no football, will cash help. All our emotions will die. We want the game to start.
Many gave Mazumdar the example of how Mohun Bagan owners sold their stake to the Kolkata-based RPG Sanjiv Goenka Group and Atlético Madrid, a La Liga club, and how the club was functioning without any crisis. In fact, Mohun Bagan was placed second in the latest edition of ISL which had to be stopped because of the raging pandemic.
Many say unlike Mohun Bagan, office bearers of East Bengal do not want to hand over the club to the new owners. For years, football clubs in Kolkata have been funded by wealthy Bengali families, not anymore. Then came the ponzi scheme companies which funded the club but paid through cash in gunny bags. When the CBI and ED started probing the ponzi scams, two top football officials were put to judicial custody.
Veteran lensman and seasoned author Srenik Sett, who represents Shree Cement in meetings at East Bengal club, says he is just exasperated. “The club officials need to know the difference between investors and sponsors. Sentiments do not make a team, hard cash does. We got Robbie Fowler, a legend, to coach the club but these bickerings just do not stop. And now the club officials are saying they won’t sign the final term agreement. What does this mean? So what do they expect me to do?” Sett told MoneyControl.
Those who have had the experience of dealing with Kolkata football clubs say it is easier to slay a multi-headed Hydra than handling officials of football clubs in Kolkata.
A pressing dilemma
Former Adidas marketing person Amurto Basu Ray said he once entered into an agreement with East Bengal but the colours of the jerseys produced by Adidas and those used by East Bengal players did not match to perfection. “I admit there was an error but it was very, very minor. We immediately made a fresh order but the sarcastic remarks at the football ground were very difficult to handle. It was nothing but humiliation,” said Basu Ray.
Basu Ray said he would often hear club officials being castigated by fans for “selling the club to foreigners”. “Sentiments of East Bengal fans, even club officials, are very difficult to handle. They would listen to nothing and ride high on emotions. They are often, very, very unreasonable. They have a my way or the highway attitude. It does not work when top companies are coming to tie up with the club,” Basu Ray told MoneyControl.
Sett agrees. He says investment into a football club is a long-drawn process which, eventually, must generate revenues for the company. “And we both need to work towards it. It seemed to me the club wanted the cash, not us. Isn’t it wrong, totally unreasonable?”
Sett says Shree Cement has pushed in a professional format into the club by hiring Fowler and a host of foreigners. Fowler, said Sett, was a prized catch and the company is paying him a hefty salary. “There are no matches, Fowler has returned home. We will call him when the season starts.”
The pressure is mounting on East Bengal, whose biggest moment of pride is a 1975 Kolkata League 5-0 victory over rival Mohun Bagan, a feat that remains unparalleled till date. But that was nearly four and a half decades ago. Many veteran members and supporters told MoneyControl that the club cannot live on emotional vapour for long.
There are other issues. East Bengal, once the pride of India, was criticised and fined in June 2021 by FIFA, the game’s controlling body across the world, for not paying salaries to players and coaching staff.
Club officials have been trying hard to get a bigtime sponsor but everyone wants majority control. ATK had also negotiated with East Bengal, but wanted an 80-20 shareholding pattern takeover. East Bengal officials, then reeling under the 70-30 shareholding pattern with Quess, backed out.
Now Majumdar and Sarkar are sending messages as a last resort. If Shree walks away, East Bengal must return the cash. And there are fears that the club will fall apart, cease to exist entirely.
For all intentions of playing hardball, East Bengal officials know they do not have a choice. And then, they cannot risk disappointing a fan base still reeling from some bad performances in recent times. In modern soccer, a club must have on-field success and its off-field wealth. But East Bengal has none. For the last couple of years, the club has been living on the edge, a consequence of impulsive management, rash decisions and weaker negotiating position.
East Bengal’s scale of damage is vast. Stuck in the middle is Rs 55 crore amount a corporate giant spent on the club. If troubles continue, Shree Cement could leave. But not without their cash.
And then comes the million-dollar question: Who will pay?