Pandemic queers the pitch for pro sports

The pandemic has left Indian professional sports in a tough spot. In Europe, however, many professional sports have tentatively restarted without spectators in stadiums, and after making Covid-19-related tweaks — top tier football matches are now played in quarters not halves to enable players to refresh themselves from personal bottles, for example. Formula 1 also held its first race on Sunday without spectators, while England is gearing up to play Tests against West Indies in a self-contained “bubble”. Indian sports, though, continue to be in lockdown. Despite initial criticism, football leagues in Europe have been compelled to restart due to T V contracts that levy hefty financial penalties on teams if the stipulated number of matches are not played.

In India, the sporting season will likely start with the resumption of the Indian Premier League (IPL) in October-november as the International Cricket Council (ICC) is likely to cancel the T20 World Cup slated for that period. An added advantage: Unlike other pro leagues like football, kabaddi or badminton, the Board of Control for Cricket in India’s (BCCI’S) flagship T20 tournament is not beholden to how well India is able to control the pandemic spread in the next few months — international venues like the UAE or Sri Lanka are better potential alternatives, given that they reduce team logistics to short roadtrips between venues.

For the BCCI, while the payoffs for hosting the IPL this year are huge, the pandemic and then the border tension with China have complicated the issue. Star TV pays ~3,269 crore annually to BCCI for the rights to broadcast the matches. Then there is a Chinese phone brand, which pays ~440 crore every year for the privilege of branding the tournament Vivo IPL. Until last year, the Indian team jersey was held by another Chinese phone maker, Oppo.

The IPL likely won’t get bounced out by the economic slowdown. While advertising rates for TV spots will fall, many fast moving consumer goods and other consumer brands will be lured into sponsorships and advertising in the IPL, given its significant TV audience and broad national appeal. What is more worrying for the sports i ndustry, however, is the absence of many big advertisers and sponsors from the sporting arena.

With focus turned from growth to survival, companies are looking at every rupee saved. As firms cut back on advertising costs due to diminished demand for their products and focus on retaining cash for business security, sports sponsorships are unlikely to leap back in 2020. It is only when consumers go back to their business-as-usual lifestyles that key pre- Covid advertisers like automobile makers, smartphone brands, tyre companies and digital start-ups will resume spending on team sports.

With sponsors hard to come by for the next 1218 months before the economy picks up momentum and consumer demand rises again, most Indian sports bodies are hoping that no further bans follow the ones announced on 59 Chinese apps. Many banned apps were native to some Chinese phone brands and simply based on usability, this may impact future demand for these products. These firms may have no option but to reevaluate new phone launches and stop further brand investments, given the policy uncertainties.

Other fledgling leagues like the Indian Soccer League or the Pro Kabaddi League have bigger problems as their smaller, niche audiences in some regional clusters do not generate enough excitement among brands to come aboard as long-term sponsors — of course other than the obligatory Chinese brands — and therefore have greater financial dependence on revenue sources like pooled TV revenues. This year, financial support from corporate promoters already facing strong economic headwinds in their core businesses are likely to be less forthcoming. Other sports like volleyball, tennis, wrestling leagues have already bitten the dust this year, while a new league for kho-kho has been pushed to 2021.

Sporting events like marathons and other races that see mass participation have been similarly hit. Unfortunately, like most other stories in the pandemic, this one too ultimately ends at the door of testing for the virus. Countries like the United States, which are not able to ramp up testing resources sufficiently have been unable to restart key sporting leagues, unlike their European counterparts, or had to cancel key events like the NYC Marathon. In India, too, sports will be able to resume, even without spectators once the country is able to test rapidly — and often all those in closecontact environments like sports. Until that is available, it will be difficult to manage bringing in foreign players and coaches safely as well as finding a safe operating model for the teams.