The United Breweries Group is going through times with its Kingfisher Airlines fighting for survival and these difficulties could also effect its sports properties and investments. With the season of resigning players and transfers upon us these problems could now effect the sponsorship amount paid by the UB Group to the Kolkata giants East Bengal Club and Mohun Bagan AC.
And not many are giving this issue any serious thought, but they forget that last October Kingfisher sold 42,5% of its stake in the Force India Formula 1 team to Sahara India Pariwar for USD 100 Million. This was an investment into the future of the F1 team then otherwise industry insiders say that Sahara Force India F1 could have faced financial problems this season.
The UB Group through United Breweries is a 50% stakeholder in Kingfisher East Bengal, while its United Spirits division is a 50% stakeholder in McDowell's Mohun Bagan. In the ongoing season both the clubs have received Rs 100 Million (10 crores) in sponsorship with other co-sponsors making-up the additional amount to fund their costly squads. Both clubs are hoping to get a 25 to 30% increase in the sponsorship money, which has grown substantially over the last few years.
Normally around this time of the year the sponsorship amount is finalised, so the clubs can go out and recruit the best possible talent. Now there are different versions making the rounds what will happen.
Version one is that the amount will not be increased, another one says it will be increased but not as much as the club would like to see, a horror scenario is that the amount could actually be reduced. In connection to that the UB Group could sell some of its stake or its complete 50% in both clubs to new investors to exit a non-core business.
The last option isn't surely what the two clubs would want, but if the situation surrounding Kingfisher Airlines does not improve then the UB Group will need to focus on saving the airlines rather then sports investments.
On the other side East Bengal and Mohun Bagan are such big properties surely new investors and sponsors can be found to fund their costly squads with their respective budgets this summer could exceed Rs 150 Million (15 crores) for the 2012/13 season.
Sadly no one from the UB Group wanted to comment on this developing situation which could be harmful for not only Kolkata but Indian football.