Boardroom V. Battleground: How Indian Sports Leagues Can Structure Franchise Agreements to Avoid Future Disputes

INTRODUCTION: WHERE THE REAL GAME BEGINS

In India’s booming sports ecosystem—where cricket isn’t the only game in town anymore—leagues are sprouting up across kabaddi, wrestling, football, and even emerging formats like franchise-based esports and athletics. Big money is flowing in, team valuations are skyrocketing, and media rights deals are becoming more lucrative than ever. But behind the glitz of opening ceremonies and team unveilings, the real drama often plays out in the boardroom.

Franchise owners being abruptly terminated. Payments withheld. Brand assets misused. Legal notices flying days before a season launch. If you’ve been a part of a league—whether as an organizer, franchisee, sponsor, or investor—you’ve either seen or experienced the fallout of a poorly structured franchise agreement.

The problem isn’t ambition—it’s alignment. Most Indian sports leagues are being built on excitement, not on enforceable contracts. And as leagues scale, vague or one-sided agreements quickly become powder kegs. Deals struck over calls or WhatsApp often miss the nuance required to handle real-world complications—IP rights, non-performance, investor exits, or media obligations.

In a space where season timelines are tight and public perception is everything, even a single contractual misstep can derail years of goodwill. And when the boardroom turns into a battleground, no one really wins—not the league, not the teams, not the fans.

Because if the boardroom isn’t aligned, the battleground will always be messy—on and off the field.

WHY FRANCHISE AGREEMENTS ARE THE SOUL OF ANY LEAGUE

No matter how flashy the launch event, how passionate the fanbase, or how well-packaged the broadcast looks—if the franchise agreement is weak, the league is sitting on a ticking time bomb.

In India, too many sports leagues are launched with a lot of vision but very little legal clarity. Franchise owners often sign hurriedly-drafted MOUs, term sheets, or one-sided contracts without a real understanding of their rights, obligations, or exit paths. On the other side, league promoters sometimes assume that once a franchise has paid the entry fee, everything else will fall into place. This disconnect is what leads to disputes, mistrust, and in many cases—litigation that stalls the league’s growth.

A well-drafted franchise agreement isn’t just legal paperwork. It’s the operational backbone of the league. It defines the DNA of the relationship between the league and its teams—covering everything from branding and media rights to payment structures, participation terms, territorial exclusivity, and dispute resolution mechanisms. When done right, it becomes the single most important document protecting both the league’s integrity and the franchise’s investment.

Take some examples: A franchise gets terminated for non-participation—but the contract doesn’t specify a penalty clause. A team starts selling merchandise using the league’s name—but there’s no IP usage protocol in place. Or a league wants to onboard a new franchise in the same city—but the old franchise has a vague exclusivity claim. These are not hypothetical issues—they’ve already played out across multiple Indian leagues.

Whether you're a league founder planning your first season or an investor evaluating a team buy-in, the franchise agreement is what will ultimately safeguard your commercial interests and protect the league’s long-term sustainability. If it’s unclear, biased, or incomplete, it won’t take long before the cracks start to show—publicly.

In short, strong franchise agreements don’t just prevent disputes—they build trust, professionalism, and a legally enforceable ecosystem where every stakeholder knows where they stand.

ANATOMY OF A STRONG FRANCHISE AGREEMENT: KEY CLAUSES TO GET RIGHT

Building a league without a solid franchise agreement is like building a stadium without a foundation—it may look good at the start, but it won't survive pressure. For Indian sports leagues aiming to scale and attract serious investment, it’s time to move beyond generic templates and WhatsApp-approved drafts.

Whether you're a league founder, team owner, investor, or sports consultant, here are the key clauses that make or break a franchise agreement in today’s competitive landscape:

• Tenure and Renewal Terms

Don’t leave it open-ended. Define exactly how long the franchise rights are valid—3 years, 5 years, or season-to-season. More importantly, include clear renewal criteria—performance metrics, compliance, payment history. This prevents disputes around automatic renewals or unfair terminations.

• Entry Fee, Annual Commitments & Payment Schedules

Structure your commercials clearly—entry fee, annual fee, revenue share, penalties for late payments. Add escalation clauses for non-compliance and grace periods to avoid abrupt fallout. This protects the league’s cash flow and helps franchises plan long-term.

• Territorial Rights and Exclusivity

Franchise owners must know what they’re getting—exclusive rights to a city, state, or zone? Can a new franchise be added nearby in the future? Ambiguity here leads to messy legal disputes and trust erosion. Define geographic boundaries and limitations in black and white.

• Branding, IP, and Merchandising Rights

This is where most Indian leagues slip up. Who owns the team name? Can the franchise use the league logo in ads? What about jersey sponsors, digital content, or merchandise? Nail down the intellectual property ownership and define permitted use cases to avoid public IPR battles.

• Player Access and Participation Rights

Clarify how players will be made available to the franchise—through drafts, auctions, direct signings. Define what happens if a team refuses to participate in a season or doesn’t meet minimum roster requirements. Participation clauses protect the league's credibility and scheduling.

• Media Rights and Commercial Usage

One of the biggest revenue areas—and most common conflict zones. Who controls broadcast,

digital, and social media rights? Can a team do a documentary or player-focused campaign? Define media usage rights and revenue shares to avoid clashes with broadcasters or sponsors.

• Audit, Reporting, and Compliance

Add reporting obligations—sponsorship disclosures, financial transparency, brand usage audits. Especially in leagues involving central revenue pooling, transparency becomes key to trust.

• Exit, Termination, and Buy-Back Clauses

Not every franchise will stick around forever. Clearly spell out how and when a franchise can exit—and under what terms the league can terminate them. Include exit valuation methods, asset handovers, brand transfer rights, and a cooling-off mechanism to reduce legal friction.

• Dispute Resolution

Avoid public mudslinging. Include a multi-tiered dispute resolution mechanism—starting with internal mediation, then arbitration (preferably under a specific institution), and confidentiality obligations during proceedings. It keeps things efficient, professional, and out of the headlines.

LEARNING FROM REAL DISPUTES

Let’s look at some real-world case studies that offer strong lessons for league organizers, franchise owners, investors, and even broadcasters:

 I-League vs. ISL Turf War – The Importance of Clear League Hierarchy

The confusion between the All India Football Federation (AIFF)’s I-League and the Indian Super League (ISL) on who is the "top tier" of Indian football led to legal, operational, and reputational chaos. Franchises from I-League cried foul as ISL gained top-tier status without a transparent transition framework.

League structure and franchise status must be clearly defined from Day 1. Franchise agreements should clarify league hierarchy, promotion/relegation (if any), and what happens if formats evolve.

Chennai City FC’s Exit from I-League – Missing Exit Framework

Chennai City FC, after being crowned I-League champions in 2018-19, faced disqualification in 2021 due to licensing issues and infrastructure shortcomings. The AIFF revoked their participation rights—but the lack of a well-defined exit and recourse framework led to an abrupt fallout.

Every franchise agreement must contain exit clauses, minimum compliance standards, and cure periods. Otherwise, sudden exclusions damage the league’s reputation and franchise morale.

Bengaluru Bulls vs. Mashal Sports – IP & Ownership Tussles

In the early seasons of the Pro Kabaddi League, there were reported concerns about brand control and revenue sharing between team owners and Mashal Sports (the league promoter). While never fully litigated, the behind-the-scenes tension around who owns team identities and content rights was palpable.

Define IP ownership (logos, team names, content), merchandising rights, and usage permissions early. Don’t let brand value turn into a battleground.

Premier Futsal’s Quiet Fade – No Long-Term Protection for Stakeholders

Premier Futsal launched with global fanfare—Ronaldinho, Ryan Giggs, and Virat Kohli’s backing. But the franchises had little clarity on continuity, player access, or monetization rights. With no long-term structure, the league fizzled out despite a blockbuster start.

Glamour cannot replace structure. Without solid franchise rights, season-wise commitment clauses, and defined ROI timelines, even big names can’t keep stakeholders engaged.

X1 Racing League – Ambition Without Contractual Depth

India’s X1 Racing League attracted attention with global partnerships and big names. But reports emerged of unpaid dues, disgruntled franchise owners, and logistical misalignment. The lack of solid contractual obligations for team deliverables, league support, and recourse led to early burnout.

High ambition must be matched by detailed franchise contracts—covering everything from revenue streams to operational support to fallback mechanisms.

WAY FORWARD: A LEGAL PLAYBOOK FOR SUSTAINABLE LEAGUE GOVERNANCE

If Indian sports leagues want to go beyond two-season wonders and become decade-long institutions, the work doesn’t start with player drafts or launch events—it starts with robust legal architecture. A well-drafted franchise agreement isn’t just about dispute prevention. It’s about aligning incentives, building trust, and enabling growth.

Here’s a playbook that league founders, investors, franchise owners, and governing bodies must refer to if they want to build something that lasts:

• Start with a Term Sheet

Don’t rush into full agreements. Begin with a well-structured term sheet that sets expectations around ownership, revenue sharing, deliverables, exclusivity, and exit rights. This ensures both sides are on the same page before lawyers step in.

• Build a Balanced Franchise Agreement:

Avoid one-sided contracts. Franchises are stakeholders, not just participants.

• Establish a Dispute Resolution Protocol:

Decide how you’ll fight before you actually do. Mediation, arbitration, governing council escalation—lay it all out. And make sure disputes are resolved fast, especially during active seasons.

• Tiered Ownership and Legacy Rights:

Include clauses that reward longevity—such as valuation-linked exit rights, priority in media deals, or tiered voting on league matters. This incentivizes long-term commitment, not short-term opportunism.

• Governance and Transparency Mechanisms:

Introduce basic corporate governance into league management—transparent financial reporting, regular franchise meetings, and a shared operating charter. Franchises must feel involved, not dictated to.

• Don’t Ignore IP and Branding:

Whether it’s team logos, jersey designs, or player content, clear IP ownership and licensing terms prevent conflicts down the road. Draft like your brand depends on it—because it does.

CONCLUSION: BUILD THE LEAGUE IN THE PAPERWORK, NOT JUST ON THE FIELD

In Indian sports, passion is never in short supply—but paperwork often is. And that’s where promising leagues stumble.

Franchise agreements aren’t boring legal formalities. They are the engine room of league sustainability, the insurance policy against chaos, and the roadmap to stakeholder trust. If you want big sponsors, long-term franchises, committed broadcasters, and serious investors—show them the depth of your legal preparation, not just your vision deck.

Because the truth is simple: You don’t just build the league on turf or TV—you build it in the contract.