Interview with CEO, Wadhawan Holdings
Wadhawan Holdings, a leading business house with interests in real estate, financial services, retail, hospitality, infrastructure and education, recently forayed into Sri Lanka, acquiring Wayamba United, the North Western Province franchise in the Sri Lanka Premier League (SLPL). Gaurav Laghate interviewed Gaurav Modwel, chief executive of Wadhawan Holdings, about the group’s interests in SLPL. Edited excerpts:
What made you acquire an SLPL team?
We are interested in expanding our businesses. The Sri Lankan economy is looking up. When we heard of SLPL, we thought of expanding our hospitality and financial services business into that country.
Unlike the Indian Premier League (IPL), SLPL is not very costly affair. But cricket affinity is equally big in Sri Lanka. So, we decided to acquire a franchise. And, this is not the first time we have been associated with sports. Our group is one of the main sponsors of the Mumbai Indians (IPL’s Mumbai franchise). We have also sponsored Australian team Victoria Bush Rangers and the New Zealand cricket team. The idea is to build our brand equity by way of sports and launch other businesses.
Your team Wayamba United played well in the tournament. What is your total investment and when do you expect to break even?
We acquired the team for $5.02 million for seven years, the highest for any franchise in the competition. There is also an additional operating cost of about $2.5 million per year. We did not recover money from media rights, etc. But we expect to make money in three years. This year, we didn’t have much time to prepare, as we had a very short notice.
We are excited because our team did very well in the inaugural SLPL edition. We topped the table, winning five of the six league matches. We also qualified for the semi-finals. Though we couldn’t make it to the finals, our average was the highest. Mahela Jayawardene, the captain of the team, is also the icon player. We have a good balance of young and experienced players, including seven international players.
Even after five years, IPL franchise owners aren’t making money. What makes you think SLPL would have better prospects?
Though SLPL is very similar to IPL, its size is a fiftieth of IPL’s size. Also, it has seven teams and the total number of matches is just 21. Moreover, here, we don’t have an auction of players, as is the case with IPL. We have a draft base system, which keeps costs under control.
IPL is struggling commercially because only the league owners are benefiting. All the league owners should understand any league would only grow when the franchise owners also make some money.
What is the primary challenge for SLPL and your team?
First, we have to increase the seven-year contract to a 15-year one. Whoever comes and invests money, should look at a larger horizon and remain interested in investing. Seven years is too less for that.
You also got good support from fans.
It was amazing. Typically, when our team played, 8,000-10,000 fans came to watch; they accounted for about 80 per cent of the crowd in the stadium. If we weren’t playing, the stadiums were deserted. The main reason was we focused our energies on building a fan base for Wayamba United at the grassroot level.
We partnered local colleges and organisations and connected with the under-14 and under-16 cricket teams. We would fund local teams to nurture talent. Our message is simple — we are there for our fans. Eventually, this would help build the Wadhawan brand in Sri Lanka and help us grow other businesses in the country.
But there are challenges on the viewership and player fronts.
See, the population of Sri Lanka is very small. So, viewership has to be created in a nation like India. The financial model has not been cracked yet. Moreover, not just talent, getting international players and crowd is also a big challenge.
Now, when similar league models are being explored in other countries, including the US, would you be interested in acquiring teams there?
We will definitely explore the US Premier League and other such leagues being planned in New Zealand, West Indies and Pakistan.
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