Be­yond the Game: The Busi­ness of Sports

Is the sport­ing in­dus­try the next big thing for the In­dian econ­omy? Sports in In­dia is at that stage in the game, where it's time to bat a thou­sand. Will it make the cut?

FICCI Business Digest - - News -

Pas­sion, en­gage­ment and rev­enue – if you want to find all th­ese com­po­nents to­gether, look no fur­ther be­yond the sports in­dus­try. Sports is one com­mon fac­tor that binds one and all, en­sur­ing not only en­ter­tain­ment, but also health, growth and a sus­tain­able fu­ture.

As a busi­ness, the sports sec­tor presents a wide range of op­por­tu­ni­ties across sev­eral seg­ments: sports events, sports in­fras­truc­ture, and train­ings. The sec­tor also in­cludes seg­ments such as sports tourism, sport­ing goods (in man­u­fac­tur­ing and re­tail), sport­ing gar­ments, and the avail­able op­por­tu­ni­ties in sport­ing man­age­ment and spon­sor­ship where the in­dus­try can flour­ish.

As a con­se­quence, the busi­ness of sports has a much deeper im­pact on the global econ­omy ow­ing to its close as­so­ci­a­tion with ed­u­ca­tion, real es­tate, tourism, health­care, and other sec­tors. In fact, even sports tourism is wit­ness­ing 10-12 per cent growth as In­di­ans are show­ing more en­thu­si­asm for vis­it­ing a coun­try to at­tend sports event.

Sports in In­dia: Trans­for­ma­tion un­der­way The In­dian sports sec­tor is cur­rently ex­pe­ri­enc­ing a sea change with the gov­ern­ment and pri­vate sec­tor tak­ing ac­tive in­ter­est in it. The ad­vent of sev­eral league-based events in­clud­ing cricket, wrestling, ten­nis, hockey and foot­ball has helped the sec­tor take gi­ant strides. Some of the leagues have be­come a block­buster with ro­bust view­er­ship and spon­sor­ship. In 2016, the sports spon­sor­ship mar­ket in In­dia was es­ti­mated to be valued at INR61-65 bil­lion with cricket at­tract­ing the max­i­mum spon­sor­ship – over 72 per cent of the to­tal share. Within me­dia, the tele­vi­sion ac­counted for the largest share of spon­sor­ship at ap­prox­i­mately 37 per cent.

The gov­ern­ment, too, is proac­tive and in­creas­ingly fo­cus­ing on im­prov­ing sports in­fras­truc­ture, poli­cies and gov­er­nance across the coun­try. In 2016, the gov­ern­ment ac­corded 'in­dus­try' sta­tus to sports in­fras­truc­ture, which is ex­pected to en­cour­age pri­vate in­vest­ment and en­able eas­ier ac­cess to fi­nanc­ing for the devel­op­ment of sports sta­dia and academies for train­ing/re­search in sports and sports-re­lated ac­tiv­i­ties. The po­ten­tial mar­ket op­por­tu­nity pro­vided by sports in­fras­truc­ture in In­dia is cur­rently es­ti­mated at INR800 bil­lion.

The ecosys­tem of sports in In­dia is chang­ing with the view­ers, broad­cast­ers, spon­sors, ad­ver­tis­ers, leagues, fran­chises and tech­nol­ogy com­pa­nies play­ing a key role in it.

Rise of leagues in In­dia

In­dian Premier League (IPL) took off in 2008 and since then 11 leagues have been es­tab­lished and the in­dus­try is not look­ing back. Ap­prox­i­mately, 9 leagues were launched dur­ing 2013-16 and league cul­ture has given the in­dus­try a big push to­wards a greater in­volve­ment of the pri­vate sec­tor into the sports.

With leagues come the big purse and it opens up ar­eas of em­ploy­ment, academies and bet­ter in­fras­truc­ture for the ath­letes to train and get bet­ter at their game.

Ask Sid­dhartha Upad­hyay, FICCI Co-Chair and Gen­eral Sec­re­tary, STAIRS (So­ci­ety for Trans­for­ma­tion, In­clu­sion and Recog­ni­tion through Sports) and he would tell you that leagues have played a ma­jor role in cre­at­ing a right sports struc­ture in the coun­try. 'The pur­pose of any busi­ness is to gen­er­ate wealth. To some ex­tent, th­ese leagues have been able to do that. I see them as an apt foun­da­tion to­wards cre­at­ing right sports struc­ture in the coun­try,' says Upad­hyay.

Hav­ing said that, cricket con­tin­ues to dom­i­nate and the most-pre­ferred place to in­vest amongst the pri­vate play­ers. It com­mands 51 per cent share in both on-ground spon­sor­ship, 61 per cent in team spon­sor­ship and 64 per cent in endorsements. Leagues such as In­dian Soc­cer League (ISL) and Pro Kabaddi League (PKL) have shown prom­ise and the on-ground spon­sor­ship in 2015 in­creased by a note­wor­thy 300 per cent in kabaddi, 91.6 per cent in foot­ball, 53.5 per cent in marathons and 32 per cent in ten­nis.

lSL (In­dian Super League) was able to dou­ble its cen­tral spon­sor­ship pool from the first sea­son in 2014 to the sec­ond in 2015 – earn­ing ap­prox­i­mately INR1 bil­lion. PKL (Pro Kabaddi League) also gen­er­ated spon­sor­ship rev­enue of INR450 mil­lion in 2015, for its broad­caster and in­vestor Star In­dia.

Glitz and glam­our add to its appeal

With IPL paving the way for the fu­sion of sports and en­ter­tain­ment in 2008, the coun­try has come a long way to ac­com­mo­date mul­ti­ple sports and fa­mous per­son­al­i­ties in the ecosys­tem. Other leagues, in­clud­ing ISL, PKL, HIL (Hockey In­dia League) and WKl (World Kabaddi League) have at­tracted many Bol­ly­wood celebrities, for­mer sports per­sons and renowned per­son­al­i­ties from the busi­ness com­mu­nity to own and sup­port their teams, apart from pro­mot­ing sports across the coun­try,

While the in­volve­ment of ac­tors, in­clud­ing Shah Rukh Khan, Pre­ity Zinta and Shilpa Shetty, helped en­hance the glam­our quo­tient of IPL and po­si­tioned it as an en­ter­tain­ment event, the par­tic­i­pa­tion of the busi­ness com­mu­nity brought money and man­age­rial ex­per­tise to sus­tain the league.

For­mer crick­eters – Sachin Ten­dulkar and Sourav Gan­guly – co-own ISL teams Ker­ala Blasters and Atletico de Kolkata, re­spec­tively.

The gov­ern­ment is all for bet­ter fa­cil­i­ties in sports. We are ready to pro­vide the land, we need more pri­vate play­ers to come in and man­age the fa­cil­i­ties on CSR ba­sis. Col. Ra­jyavard­han Rathore Min­is­ter of State for Youth Af­fairs and Sports

L to R: PV Sindhu, Pul­lela Gopic­hand, Saina Ne­hwal

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