UB Group had ended their association with Mohun Bagan in 2016 and East Bengal in 2018…
Back in 1998, Vijay Mallya owned United Breweries (UB) Group penned a historic sponsorship deal with Kolkata giants Mohun Bagan and East Bengal.
The two historic clubs ushered in a new era shrugging off their sentiments by entering into a Joint Venture (JV) with a corporate. The two traditional giants were averse to a company promoting alcohol-based products using the club’s name. Also, there was the issue of ceding some control on the club’s board to a corporate entity.
Before the UB deal, Tata Tea and Khadim’s used to sponsor Mohun Bagan and East Bengal respectively but these companies never entered into a partnership with the club.
The UB Group formed a company with East Bengal named Kingfisher East Bengal Football Team Private Limited of which 50 per cent was owned by each party. United Spirits Limited (USL), a subsidiary of UB, formed a JV entity with Mohun Bagan named United Mohun Bagan Private Limited with a similar ownership structure.
The Kolkata clubs enjoyed success during the liquor baron’s association with the clubs as they were amongst the top spenders in Indian football.
Back in 2000, after just two years of their association, UB Group had decided to slash the team budgets of both clubs by more than INR 1 Crore. While East Bengal’s poor on-field performances prompted UB to slash their budget, Mohun Bagan’s off the field issues and ongoing court cases at that time did not go down well with the liquor firm.
Unfortunately, things went further south in the last decade after the UB Group decided to curtail their investments. UB’s airline company Kingfisher Airlines ran into massive losses and was closed in 2012. After the debacle, the company started to cut their costs on all fronts and they even proposed to slash the budget of both the clubs back in 2012.
In 2013, though, UB Group entered into a fresh agreement with the clubs under which the company decided to provide INR 80 crores over a 10-year period.
Mohun Bagan was the first among the two clubs to face a major financial brunt in 2014 when British multinational beverages company Diageo PLC took majority stakes (54.8 per cent) in UB Group’s USL.
Diageo Group was reportedly reluctant to continue the association with the Green and Maroons and allegedly stopped their funding by November 2014. Even though Bagan bagged the I-League title in the 2014-15 season, they were facing immense financial constraint with no cash flow from their erstwhile sponsors.
The club officials decided to drag their chief sponsors to court on November 2015 after a year without a penny of sponsorship money as promised back in 2013. The club refused to wear the McDowell’s logo on their shirt during the 2015-16 I-League season.
The deal finally saw a premature end in 2016 when it was agreed that USL would give up their 50 per cent in the JV and returned their shares.
After four seasons without a major title sponsor, Bagan finally entered into a merger with ISL champions ATK and will take part in the top tier league in the upcoming season.
East Bengal did not face many financial difficulties in 2014 as the parent company continued their association with the club despite Heineken becoming the principal owner of UB Group in 2015 with 42.1 per cent share. Vijay Mallya, one of the directors of the club at that point, had only 37.5 per cent stakes.
The relationship suddenly took a dip after the conclusion of the 2017-18 season. In May 2018 during a meeting with the club officials, UB Group announced that they would slash the sponsorship money to a mere INR 1.5 crores which was less than half of what East Bengal were getting until then.
The Red and Golds quite expectedly did not agree to UB’s terms and decided to end the partnership. UB group did not hesitate to return their 50 per cent stake in JV and the sporting rights to field a team in a recognised tournament (which was held by the JV).
Thereafter, East Bengal entered into a fresh JV with Bengaluru-based Business service providing company Quess Corp. The new venture was named Quess Bengal FC Private Limited whose 70 per cent stake was with Quess and 30 per cent with the club.
UB Group wanted to remain as a co-sponsor at East Bengal but the offer was rejected by the club and their new investors in 2018. Quess’ association with East Bengal though did not last long as after just two seasons, the company decided to terminate their agreement with the club and end the JV.
Currently, without a title sponsor or an investor, East Bengal are reportedly in talks with several parties in order to attract investment into the club.
It has to be noted that although UB’s sponsorship deals of Mohun Bagan and East Bengal had ended in 2016 and 2018 respectively, the companies which were formed back in 1998 remained active for a longer time.
The last balance sheets of United Mohun Bagan Private Limited and Kingfisher East Bengal Football Team Private Limited was last filed on March 31, 2018 and 2019 respectively.
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