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?
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