I always turn to the sports pages
first. The sports page records people's accomplishments; the front page usually
records nothing, but man's failures.
Earl Warren
The above quote quite succinctly
sums up what is perhaps the biggest draw that the Sports Industry has. We, as
humans revel in the achievements of our teams, sports personalities and also
sporting events. The high is probably matched only by achieving such successes
ourselves. Sports and games have been around for ages and they will continue to
do so because of the very same reason.
Estimating the size of the Sports
Industry is a very complicated task. There are too many revenue channels like
broadcast, merchandise, attendance fees, advertisements, sports management
agencies and a host of others. A report by Plunkett research puts the estimate
of the Sports Industry in USA at a whopping $435 Billion.To put this in
perspective, the automotive manufacturing in USA is valued at $203 Billion, the
entire movie & entertainment industry is a paltry $29.6 Billion. Even in
India, where sports is still a fledgling industry (other than cricket) the
opportunities are estimated at $20 Billion dollars because of the tremendous
infrastructure spending which is required.
Comparative Chart
|
Industry
|
Estimated Size ( Revenue is Bn USD )
|
|
Sports Industry ( USA)
|
435
|
|
Media & Entertainment
Industry ( USA)
|
45
|
|
Media & Entertainment Industry ( India )
|
17.3
|
|
Automobile Industry ( USA)
|
203
|
|
Automobile Industry (India)
|
71
|
|
Sports ( India)
|
6.1 ( Estimated)
|
The chart quite clearly
illustrates the mismatch of the Indian sporting industry’s size compared to the
USA. Apart from the Indian Premier League and premier cricketing properties
like the World Cup most of the sporting events are adequately monetised. The
inadequate commercialisation could be pointed out as being one of the reasons
for India’s below par, and sometimes downright ridiculous results in many
sports.
A Vicious Cycle
The sporting industry is in quite
a peculiar situation due to the lack of wealth creation in Indian sports. The fact that there isn’t enough money in
sports, has for the most part kept out the private sector. This has led to a
situation where most of the sports bodies/ teams and myriad associations right
from Hockey, Wrestling, Cricket, Football are managed and governed by either
ex- sporting personalities or politicos who are honorary presidents of such
bodies. To a large extent, an ex-sporting personality fails to have a commercial
and business mindset and has more of a sporting mindset. This is good for the
sport as an administrator, but bad for the profits. We need more businessmen in
the Sports Industry so that the bodies are woken out of slumber and are made to
unlock the immense potential within them.
A direct example would be the IPL
and how it has been commercialised. The IPL was conceptualised by Lalit Modi –
who is a businessman ( KK Modi Group , Godfrey Philips India) through and
through. Chirayu Amin, the current commissioner of the IPL is again a business
man ( CMD of Alembic Ltd. , a 104 year old Pharma company, more popularly known
as the makers of Glycodin ) . All the teams in the IPL are owned by Corporate
giants and managed by men who run it like a business and not just Sports.
The result of treating Sports as
a business as in the case of IPL has been quite evident. It is currently the
most watched event on Indian television spanning a massive 45 days plus. The
IPL brand and some of the team brands are among the world’s valued brands in
sports today, commanding valuations equivalent to NBA teams and some of the EPL
teams which have been around for decades. It has also strengthened the BCCI’s
coffers by humongous amounts (it remains to be seen how it is put to use
though) and helped the game uncover talents from hitherto unknown locations in
India. Cricket viewership had taken a strong beating in the early part of the
2000s in India owing to a waning interest in ODIs , the IPL not only reversed
this trend but got a lot more viewership from some sections of the audience
which had otherwise given up watching cricket. IPL has also generated a
significant amount of employment directly and in terms of spill off - domestic players earn more money, all the franchises
hire an extensive support staff and the indirect opportunities for people
involved in merchandise, stadium management, sponsorships management and what
not.
The IPL has also had its fair
share of controversies and allegations right from the teams to the players. It
has also given rise to this new term ‘cricket purists’ – vaguely defined as
people who enjoy test cricket only. I find the term quite wrong in the sense
that the purists view test cricket as being superior to ODI or T20
cricket. The different formats are for
different audience . For eg. I would choose watching a good day of Test cricket
over the IPL or T20 cricket any day, but my mom , for instance, would have much
more fun watching the IPL . That is a preference of the audience and I don’t
think that makes any one form superior over the others.
What does Indian Sports need?
I’ve already emphasised the need
for business managers to manage Sporting Bodies in India. Sports has to be
looked at as a full time job for those managing it, and not as a honorary post.
We need a lot of professionals to manage sport. The administration has been too lax and had a
huge negative impact on a lot of sports – cases in point being the suspension
of the Indian Olympics Association, the fracas in 2008 at the Hockey
associations.
Another approach to ensure better
management and create monies in Sports would be to give it an industry status.
This will enable a systematic entry of private players into Indian Sports and
also help them with their funding requirements, overseas borrowing and tax
benefits. The FICCI is already lobbying with the Government to this effect.
Creation of more marketable
properties akin to the IPL and the
Hockey India League. Sports needs to be marketed very well – which might happen
if the private sector plays an active part in creating properties. Two recent
examples are the Hockey India League and the Toyota University Cricket
Championship (TUCC) . The Hockey India League has created a lot of visibility
for hockey and met with an enthusiastic response from international bodies as
well the fans. The TUCC conceptualised and co created by NDTV and Toyota along
with their partners provides a great platform for budding cricket talent which
earlier went unnoticed. It has also garnered a decent enough viewership backed
by the marketing might of its Sponsors and the Brand Ambassador SRK. There is a
lot of potential in India for such platforms in other sports too.
Seeing Sports through a business
lens should hopefully ensure that there is a trickle down into development of
sports academies at the grass root levels. This will happen gradually and over
time. In the USA, there have been instances where in some of the states College
Basketball (NCAA) has garnered higher
viewership than the NBA. Instances like
these are surely possible in India too, and have already happened in the IPL,
where IPL has beaten TV ratings of International matches.
The business of Sports can surely
prove to be a powerful industry for India’s future economy, because Sports
captures one’s hopes – hopes of seeing the impossible happen and hope is a very
powerful thing.
