Behind Punit Balan's serial sports team ownership strategy
Within a short span of four years, Punit Balan has made heads turn with a spree of sports franchise acquisitions. Balan owns as many as eight sports teams across varied leagues in tennis, handball, table tennis, kho kho, badminton, cricket, arm wrestling, and, most recently, chess. Valued at a whopping INR 3500 crores, the Punit Balan Group is active in diverse sectors such as film production, real estate, cyber security, automotive design, and philanthropy.
A sports enthusiast since his school days, Punit Balan is now converting his passion into a viable business. His vision and mission is simple: to elevate the stature of non-cricketing sports in India and to inspire confidence in other entrepreneurs to invest their money in sports.
Our exclusive interview with Punit Balan
A committed long-term investor, Punit Balan understands that any return on investment in sports takes time. That said, he is extremely bullish about the Indian sporting landscape, so much so that he believes the country’s professional leagues are evolving at a much faster rate than was the case even in North America from a century ago – when many of its iconic leagues such as NFL, MLB, and NBA were conceptualized.
For Punit Balan, the pre-condition for buying a franchise in any league is whether the relevant sports association is on board. “We have not signed any Leagues where the association is not there. For example, volleyball,” Balan tells Sportskeeda Business of Sports in this exclusive interaction.
Are valuations tied to on-court performance?
Recently, Michael Jordan’s sale of his majority stake in NBA team Charlotte Hornets made headlines – because he reportedly made $3 billion on an initial $275 million investment. This is despite the fact that the Hornets have consistently underperformed during the entire duration of Jordan’s ownership. Nevertheless, Balan feels there is a direct correlation between on-field performance and the valuation of a sporting franchise.
Explaining how valuations of Indian sporting teams are closely linked to their on-field performance, Punit Balan says:
“I will tell you the example of a recent league…Maharashtra Premier League cricket. Our on-field performance is we are runners-up. We got the [Kolhupur Tuskers] team at 11 crores for three years, but today I am getting an offer from many people as well as corporates where they are ready to invest close to 20-22 crores for only 50% stake.”
Punit Balan on celebrity co-owners
Such attractive offers notwithstanding, Balan is clear on wanting to retain 100% ownership in all his teams as he doesn’t want interference in decision-making. That said, he made exceptions in two cases – by on-boarding celebrities Sonali Bendre and Badshah as co-owners of Pune Jaguars (tennis) and Mumbai Khiladis (kho kho), respectively.
Popular opinion suggests that celebrities can immediately raise the profile of the leagues they are associated with. But Balan busted this myth, saying:
“When you see the following or traction of the [social media] posts [of all our teams], it’s the same whether it’s owned with a celeb or it’s not owned.”
In both Bendre and Badshah’s cases, it was their emotional connection with the sport that convinced Balan to carve out exceptions to his 100% ownership rule. (While Bendre hails from Pune and her son is an aspiring tennis player, Badshah’s mother used to be a kho kho player herself.)
New acquisitions planned
Looking ahead, Balan has already lined up three or four new teams for acquisition. Having already purchased franchises in virtually every Indian league outside of the IPL and PKL, Balan is also evaluating options in foreign leagues. Interestingly, he has no thoughts of investing directly in league ownership, calling it a “headache.”
Naturally, with his original claim to fame as a film producer, Balan is looking to make sports documentaries for his teams, similar to Netflix’s Drive to Survive.
All things considered, it’s safe to say that the Punit Balan Group will continue to stay invested in Indian sports for the foreseeable future.