Business head, ESP Properties
ESP Properties, the sports and entertainment arm of GroupM and SportzPower (sports business news publication), released the 2018 report on sports sponsorship yesterday (March 21, 2018). Titled 'Sporting Nation in the Making-V' the report analyses the entire sports ecosystem.
Key take-outs of the report:
• Overall sports sponsorship grew by 14 per cent in 2017. Media investments contributed to the largest portion of the pie (55 per cent of overall spends), followed by ground sponsorships
• On-Ground sponsorship in Cricket crossed the magic $100 million mark for the first time
• Football showed a momentous 64 per cent increase in On-Ground sponsorship
• Team sponsorship was up by 17 per cent in 2017 - from Rs 700 crore to Rs 819 crore
• Cricket endorsement has grown by 15 per cent
• Virat Kohli is leading from the front with 19 brands and INR 150+ crore worth of endorsement value
• Media Spends on Sports grew by 16 per cent from Rs 3,511 crore to Rs 4,065 crore
• Media spends driven even more strongly in 2017 by Television, which grew an incredible 43 per cent from Rs 2,367 crore to Rs 3,379 crore
We spoke to the business head, ESP Properties, Vinit Karnik on the sidelines of the event in Mumbai and here is what he had to say...
Let's start with football's 64 per cent growth which is an encouraging sign, but that's primarily on the back of the FIFA U17-World Cup; do you see Football growing at a similar rate this year too?
I think football will continue to grow, the media rights will be up for renewal. ISL has just had its longer season, so there is now a benchmark for the longer season. There are multiple factors which make me feel that football will continue to grow.
PV Sindhu's endorsement deals went up from Rs 12 crore to Rs 30+ crore; did brands take money out of Sachin and Dhoni perhaps and invest on Sindhu?
No, it is not that the brands have taken money away from Sachin or Dhoni and given it to Sindhu. It's different money that has come in. Also, the way the bigger players are playing the endorsement game with the big guys has changed. Now, most of them are revenue-sharing deals. Earlier we would say - Virat Kohli is signing a Rs 8 crore (amount is just an example) deal with brand X. Now the Rs 8 crores a day means something different when it is an equity partnership. It possibly means that Rs 8 crore is the value of which Rs 5 crore is cash and 3 crore is equity. That is a reason why we have not counted Sachin's partnership with Smaaash and Smartron as endorsement deals in the report as he has a business interest in the brands.
Do you see equity partnerships between brands and celebrities as the way ahead?
The big three will continue to have more and more equity partnerships. Take Rs 4 crores for a day type of business that will also happen, but we will see more and more equity partnerships with the big guys.
Sindhu's endorsement number is a very encouraging one; are deals involving other female talents also growing?
Yes, we are seeing good interest in Mithali Raj. What we are witnessing is that brands are engaging with female talent to build internal values from a women empowerment and women in sports point of view. So, it may not be endorsements where she is holding a product to sell, but it is the women's talents that are going and speaking at various internal activities of a brand. Such deals involving women athletes are evolving in India.
What is the aspect that appeals most to you the most when you look back at the entire report?
The kind of interest and potential of the emerging sports, vis-à-vis cricket, was the aspect that appealed to me most, this year. Normally, what we always discuss is that cricket is growing exponentially, but nothing else is happening in the sports circuit. But when I saw all the numbers in one consolidated sheet, we saw that the perception that nothing else is happening is not true. While cricket is the big story indeed, the story of emerging sports is a very encouraging one too.
Why are you so upbeat about other sports?
The number for other sports is Rs 250 crore-plus and it is a great story and in a year or two from now, I think we will get two more sports which, on their own, will be big enough to actually feature on a report like this. At this stage, there are 10-plus sports which constitute the other sports category including those like Lawn Tennis, Table Tennis, Golf, Wrestling and the rate at which all of them are growing and the amount of content that is available is really an encouraging story. There are so many leagues, so many teams and so many inventories available today - the logo on the shirt, media, on-ground... there is enough supply in the market today, to raise the demand.
Which of the other sports do you think has the maximum potential?
Badminton and Golf, I believe, will become big enough to single themselves out of the other-sports cluster. Golf is a niche sport, but the numbers that are there are encouraging because it's a premium sport. There are a lot of premium luxury brands which do professional golf - there is a Mercedes golf event that happens in India as well as a Vodafone golf event.
While there are many encouraging aspects in the report, where do you think the sports ecosystem needs work?
The reason why Kabaddi and the ISL are so popular in India today is because there is a great amount of synergy between the Federation and the private player investing in the sport. That PPP has resulted in more focus on the sport at the grassroots and marketing levels. Kabaddi and the ISL are marketed well to the mass today and at the same time, there is a continuous focus at the grassroots level. We need to have more of such partnerships and I believe more sports will emerge. Basketball for example; there is a basketball court in every second school, but people play tennis-ball cricket on it and that's because there is no focus at the grassroots level. Volleyball also has a lot of potential.
'Sporting Nation in the Making' is a comprehensive report on the sports ecosystem of the country; is there something which you would have liked to have added to the report?
I would have loved to have the e-sport emergence in the report; we could not do it because the number is not big enough in India yet. There are a lot of people playing e-sports, but the numbers are not as encouraging from the advertiser's shell-point. Another thing that I would have loved to have in the report is gate revenue; it is a significant number globally. In India, it is a little tricky because the numbers lie with the aggregators who do not share the data, but we have found a way out, we are sampling the data this year and hopefully next year, we will have it in the report.