Mohit Burman, co-owner of Indian Premier League’s Kings XI Punjab franchisee, saw a roller-coaster ride of his team since 2008, the year when he along with Bollywood actress Preity Zinta and other partners won the bid for the Mohali-based team. In 2010, the Board of Control for Cricket in India (BCCI), that owns the IPL, scrapped KXIP alleging the franchisee changed its shareholding without informing the BCCI. However, Bombay High Court subsequently stayed it, allowing KXIP to play in the 2011 IPL edition. After the row, the franchisee went through a difficult time to build a new team and attract sponsors. Burman talks to Rasul Bailay about his plans to turn the franchisee profitable. Excerpts:

How is the business side of the franchisee performing?

The focus is on turning it profitable. We are in the fifth year and I don’t see it happen this year either but it may happen next year.

What is taking so long for Kings XI Punjab to turn profitable? Some franchisees like Kolkata Knight Riders are already making profits…

KKR makes money because of Shah Rukh Khan. The kind of sponsors KKR gets are type of all his sponsors. This year should be good for us. We should be close to breakeven. Our central revenue has gone up. We should be getting upwards of Rs 50 crore from the central revenue (that BCCI pays franchisees annually). Central revenue is for everyone and is split exactly between all the franchisees. Last year, we received Rs 47 crore and Rs 45 crore the year before and it has been going up a little bit every year.

What about the other revenue streams?

There are basically three revenue streams. The central revenue from whatever the BCCI does like broadcast rights with Set Max and Indiatimes. The second revenue is what you get from sponsorships ? what I sell on my team’s jersey and others. The third is the gate receipts. Although, Mohali is one of the best stadiums, unfortunately, we have not been successful in selling high-end corporate boxes. All the companies are based in Delhi or Mumbai. If they want to entertain their clients they will obviously go to Delhi and Mumbai. You won’t spend money to travel and watch matches in Mohali.

What about the expenses?

We have done a lot of cost-cutting so our operational costs have come down. My sponsorship revenue is more or less static as it has been and the franchisee fees that I pay BCCI is same. So my central revenue that I get from BCCI has gone up, operational costs have come down. So things are looking better.

What cost-cutting exercise did you undertake?

In the first two-three years we were not sure how to run the business, so we hired an expensive top management. The CEO was an expatriate. For the last two years we are running without them. Now we have a COO who is an Indian. For the first two years, there was other marketing expenses like we made music videos and those are one-time costs and we have been using those. So the costs have come down this year. But my players fees have gone up.

Also, in the last two years we had some extraordinary expenses like we had the legal fees for the arbitration and the court cases against the BCCI and the bank guarantee fees for the Rs 400 crore that we had to furnish. I would have broken even or maybe the year before, just because of these we were not able to.

Are you looking at selling any stake?

We are not selling any stake and no outside investors.

What do you think would be the team’s valuation even if you are not selling right now?

I don’t think there is any valuation for these teams. Where is the valuation? I have not seen any transaction taking place. Except for Rajasthan Royals and Raj Kundra there hasn’t been any transaction. Hyderabad used some investment banks, but nothing has happened. So what is the valuation I don’t know.

What would be the valuation of the team judging by the Sahara’s high bid for the Pune franchisee?

Now that is a different story. Judging by that even Kochi team was high but they themselves went bankrupt because those valuations were not sustainable.