Chennai Super Kings: The Business Behind The Sports And Entertainment

CSK's revenue & profit are lower this year due to a Rs 54 crore lower payout from BCCI in FY20.
RK Damani, founder of DMart, increased his stake by 0.55% in this financial year.
The company also contributed Rs 20 crore to Electoral Bonds.

In the IPL season 2019, Chennai Super Kings finished runner-up against Mumbai Indians. However, this is not the story of their sporting season but that of their business world. A reading of CSK's FY20 annual report throws light on some interesting facts.

Hit by lower payout from BCCI

The company reported a 15 percent drop in revenues at Rs 350 crore versus Rs 410 crore in FY19. This decline was largely on account of the reduction of income from the grant of central rights from the BCCI (Board of Control for Cricket in India).

The Income from Grant of Central Rights was down from Rs 294 crore to Rs 240 crore. This Rs 54 crore drop reflected in the company’s other parameters as well. The franchise’s operating profit declined 57 percent to Rs 68 crore and the net profit dropped from Rs 111 crore to Rs 50 crore.

Brand CSK continued to garner higher sponsorship revenue though. The cricket franchise’s sponsorship income increased 24 percent to Rs 68 crore. Payouts to the BCCI and players increased as remuneration to team players at Rs 130.3 crore, increased from Rs 128.6 crore. CSK paid Rs 7 crore more to the BCCI in franchise fees at Rs 75 core vs Rs 68 crore.

Land bought worth Rs 129 crore

CSK bought land worth Rs 129 crore and additionally buildings worth Rs 11.9 crore. As of March 2020, the long term debt on CSK’s books stands at Rs 65 crore while the cash has reduced from Rs 146 crore to Rs 89 crore, probably due to lower net profit and land acquisition.

Shareholding pattern

Probably, the most interesting takeaway from the Annual Report was the changes in CSK’s shareholding pattern. India Cements owned Chennai Super Kings doesn’t classify any shareholder as a promoter. India Cements is the largest shareholder with a 30.08 percent stake in the company. The other entities holding more than 5 percent stake are Sri Saradha Logistics Private Limited at 6.88 percent and LIC at 6.04 percent.

Ace investor ups his stake

Founder of DMart and market veteran, Radhakishan Damani holds 20.4 percent stake in India Cements. He also increased his shareholding in Chennai Super Kings by 19 lakh shares during the year from 73.7 lakh shares to 90.6 lakh shares. Radhakishan Damani’s shareholding in Chennai Super Kings has increased marginally from 2.39 percent to 2.94 percent as of March 2020.

Contribution to Electoral Bonds

Another interesting takeaway from Chennai Super Kings’ annual report was its contribution towards Electoral Bonds. CSK Contributed Rs 20 crore towards Electoral Bonds in 2019, from NIL in the year-ago. This could perhaps be on account of the 2019 Lok Sabha Elections, and non-recurring, but interesting nevertheless.

After a skim through of the annual report, all eyes are back on the television screen, awaiting Thala Dhoni and his men in yellow to rock UAE while fans go “Whistle Podu” through their masks.

Sandip Ginodia , CEO

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