Stay with the chicken. British affinity to consuming this hapless avian is the only logic I can find (after much scratching of the head in vain) to explain the take over of Blackburn Rovers , a Premier League football team, by Venky's - an obscure chicken farming company from India.
Firstly the facts. Blackburn Rovers is a struggling middling football side in England. Its been bought out by Sri Venkateswara Hatcheries for £ 53 m , an Indian family firm, run by Anuradha Desai and her brothers. The takeover was completed yesterday and the team's home grounds are henceforth to be known as Venky's Ewood Park !
Foreigners taking over English clubs is not something new. It is mostly rich tycoons doing it for vanity - witness Roman Abramovic and Chelsea. They lose pots of money, but they don't care, for it barely makes a dent in their fortune. Owning a football club is like digging a hole and pouring money into it endlessly. Its the biggest dud when it comes to a business investment. Even Manchester United the most famous and richest of them all is financially in ruins. Nobody makes money except the players - its the only field where you can make outrageous salaries (think of a salary of £35000, ie Rs 25 lakhs per day) whether you perform or not.
Anuradha Desai does not fall in that boat. She is no playboy. She isn't a household name, even in India. She is known for prudently growing the company that her more illustrious father built. If she had a passion for football, it has thus far been well hidden. Beyond the usual blah blah that is made after any acquisition - we will grow together, we see a bright future, and such other rubbish, she displayed her ignorance of football by saying she is not going to pour money in to buy players. The economically challenged rabid English fan wants his favourite club to be owned by a zillionarie who'll write a blank cheque to buy every player on earth. He doesn't want to see prudent business principles.
There is zero brand value for this investment - can't imagine Venky's Chicken Tikka Masala in the menu. Sitting in the owner's box and watching Blackburn lose on a miserable cold and windy winter's day cannot be her idea of happiness. Back home in India, seeing handsome hulks sporting the Venky's logo on their football shirts is not going to make Rajalakshmi eat chicken.
Of all the bewildering acquisitions that happen in the business world, this must surely take the cake.
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16 comments:
a business post on sunday - but it could well fit into the light reading category as well - thats the magic of ramesh :-)
i recommend you should write a book on all these absurd business decisions. it would be an interesting read coz all writers write on what businesses should do. i have never read anything which says what one should not do.
Ramesh - that is something interesting. Perfectly agree with Sandhya. Wondering how Venky's will serve Chicken Tikka Masala when the ground is going to run on prudent business principles. Heard this news first from you... still scratching my head to understand - how can it be!
Is this a business post or Sunday post?
BTW see every body is saying you should write book(s)
On second thoughts, I think the acquisition did help in a little bit of branding![If getting popular could be called as branding]
If venky's never acquired a foot ball club, would we ever be aware of Anuradha Desai?[who looks more like a Rajalakshmi! at least to me]The blog post and the subsequent discussions and the press coverage that ensued after the news definitely added some popularity to them.
If there wasn't an acquisition, Could Venky's seriously consider any relatively small ad placing in UK?
BTW they have also diversified in to nutritional health products, pet food and health-care products!
@sandhya - That's a thought - writing on what a business should not do, rather than what it should. Nice idea.
@Sandhya - Imagine the average Blackburn fan - he must be scratching his head even more in bewilderment.
@zeno - Have to justify this blog being a business one; having tailed off regular posting. Paying 53m pounds for this little bit of publicity is a tad too much; don't you think ??
How quickly you forget the basic mantra of a family owned Indian business.
You do something like this for two reasons:
1) To launder money
2) To create a tax shelter when you sell the club at a deep discount.
Occam's razor...
I was wondering at your headline before I read through (Why did a proclaimed vegetarian be interested in CTM, after all having seen more diversity @ China :-))
Publicity, maybe as a starter for doing something very different? Could be a visibility front for getting into Europe via UK for their biological products, vaccines et al, as zeno states. I don't think they may be in the league of the IPL launderers, though.
Still an odd decision, however.
they wl outsource the entire contingent with indian players :) tht way the cost wl come down and wl score brownie/blackie points with indian public too. Already the team is losing..so if they lose some more..who wl care :)
Ahh! 'Venky's Chicken' is a part of Pune's culture. They are one of the well known business groups and family in Pune. Although nothing close to the Kirloskar legacy, but Bala's New Year Parties (one of the brothers) are the best; the invites are begged, borrowed or stolen!
The lady Anuradha, like you pointed out, indeed has no other interests in life apart from looking after father's business; the brothers on the other hand are quite flamboyant and like to live it up. For once I thought, this could be the brothers being a little indulgent, but Ravi's explanation is where I'd vehemently nod my head and say- "Oh yes"! There definitely is a lot of controversial cash flowing around that household.
Interesting!! I think we can scratch our heads till all cows (or chickens) come home but will not be able to find out why she acquired blackburn?
Possibly, it's an emotional move. Seeing blackburn cloaked in Venky's logo, Ms. Desai may hallucinate her endeard chicks enjoying their lifetime in the field (running wild) before being sheared. May be her father's wish =)
Where do you find your news items!! Perfect combo of business and sports :) I was curious to see Rajalakshmi oops Anuradha Desai's pictures after Zeno's comments and came across her interview in which she justfies the acquisition as follows: "Our core business is the production of wholesome and nutritious food: Nutrition and good health are closely associated with sports and have a natural, symbiotic relationship with each other." Sounds so contrived...
But maybe there is a potential for a soccer equivalent of IPL in India and they want to be well positioned when it happens. But more realistically I think Ravi is on to something.
@Ravi - If that was the motivation, why do it in the UK. Much better to d in India where such things can be managed. Far more difficult to pull it of under Her Majesty's nose.
@RamMmm - Yeah, its a bit hypocritical, considering that I have never tasted CTM :):)
@Anon - Now, that's a brilliant idea.
@Deepa - I can understand living it up, but why on earth would anybody want to do that in Blackburn of all places !!!
@KC - Ha Ha.
@J - Can you believe the garbage that the PR machine puts out ? True drivel.
@Ramesh- The boys aren't prodigal, the sister must have said motherly, "You can't get Man-U this time. Take Blackburn now and keep quite."
I did some research with young soccor fans, and got two responses.
First response was "For the same reason a pie salesman or a Russian Oil Ticoon buy teams"
Second response is nice "If you earn $30,000 you buy FIFA 2008 on your playstation, if you earn $30,000,000 you buy a team. Unfortunately, FIFA 2008 is not tax deductable."
So we need to remember that this is not big money for the ultra-rich and does not need a lot of justification or logic to spend.
@Deepa - Is the fair lady that matronly ?? :)
@Anon - Very true for the ultra ultra rich, but I doubt if this group has that sort of money . Witness the goings on in Man U and Liverpool - the investors are in such real trouble.
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