Anirban Roy Choudhury
Marketing

What makes Indian sports so attractive to marketers?

Over to the experts.

In 2009 came a Tamil film Vennila Kabaddi Kuzhu (White Moon Kabaddi Crew), whose plot revolved around the sport. After its success at the box office, the movie was remade in Telugu in 2010 and in Hindi (Badlapur Boys) in 2014.

Although the movie, in its various iterations, did not achieve the stratospheric levels of success that Aamir Khan's Dangal (wrestling) and Chak De India (hockey) did, the fact that kabaddi is spoken of today in the same breath as the big daddy of sport i.e. cricket, says a lot for the Pro Kabaddi League (PKL) that has become a spectacular success. Football made its mark as the Indian Super League (ISL) established itself. This season, kabaddi raked in over Rs 130 crore for Star; ISL crossed the Rs 100- crore mark last year; and IPL's (Indian Premier League) season 10 (2017) helped Sony generate ad revenue worth Rs 1,300 crore. Four leagues - PKL, IPL, the Premier Badminton League and ISL - will have one thing in common this year: Star India as the broadcaster.

What makes Indian sports so attractive to marketers?

PKL is a distant second in terms of media sponsorships, but the country's biggest cricket extravaganza, IPL, also had its doubters when it began in 2007. Back then, British newspapers refused to consider the IPL a force in cricketing world. This year, after the media rights auction of IPL, London's Telegraph newspaper carried a story about how IPL's £65.7 million (m) per week sponsorship is just £1m less than the media rights cost per week of Premier League Football. That is acknowledgement of India's sports surge.

The sports story in India has changed rapidly in the last decade. Olympic medals for Saina Nehwal and P V Sindhu propelled badminton and its stars into the big league. Before that, Sania Mirza's exploits in tennis kept conversations going and the money coming. Kabaddi was the dark horse in more ways than one.

Star India and Mashal Sports' brainchild, PKL, raked in the moolah to change the economics of other sports' sponsorships. The privatisation of sports bodies brought an end to the federation culture while opening the doors for innovation. Biopics on sporting legends spiked the aspiration factor. This brought in changes in parenting too. Today, a mother in urban India is as serious about a cricket practice session as she is about her child's mathematics class.

Sport is no longer a male prerogative, whether watching or playing. The days when only males in the house used to sit in front of television sets to watch Sachin Tendulkar bat and Anil Kumble bowl is disappearing. Today every member of the family is interested in watching sports, be it cricket or badminton or kabaddi. "That," believes Jehil Thakkar, partner, Deloitte, "is one of the biggest changes." IPL has found a new audience in the game, women now go to the stadiums in large numbers to experience the extravaganza. It has encouraged a larger set of brands to put their money on sports. They believe it's a great avenue to garner eyeballs.

In 2017-18, around Rs 6,600 crore of advertising revenue is estimated to be spent on sports. GroupM estimates total advertising investment in India to be around Rs 61,204 crore which translates to over 10 percent of the total ad dollars that is invested in sports. Cricket enjoys over 80 percent of the total ad spend, followed by kabaddi, football, and badminton, which are often termed as 'other sports' or 'non-cricketing sports'.

"This 20 percent is not a pie out of cricket, this 20 percent is new money which has come into sports and which is a great news for the ecosystem," says Vinit Karnik, business head, GroupM ESP. Sindhu and Saina are top targets for brands. "Brand endorsement deals for Sindhu, Saina and Sania are more expensive than national cricketers (excluding Virat Kohli and MS Dhoni). This shows the extent to which other sports have grown," opines Indranil Das Blah, founding partner KWAN and CEO Mumbai City FC.

Industry analysts put the value of Sindhu and Sania's brand endorsement deals at around Rs 35 lakh per day. Saina follows a little behind with deals worth Rs 25 lakh per day (the number of days a celebrity commits to an endorsement varies from deal to deal). These are much more than Rohit Sharma, R Ashwin, Hardik Pandya, Ravindra Jadeja and other national team cricket players. Indian cricket captain Virat Kohli leads the pack with Rs 2.5 crore per day, followed by former skipper, MS Dhoni, whose brand endorsement deals bring in Rs 1.5 crore per day.

Coming back to Star India's whopping IPL deal for five years, there is one question that crops up: can the media company recover the investment? According to one media expert even a conservative calculation reveals that Star will easily recover the investment and also make substantial profit.

Interestingly, the IPL auction this year was not a battle between traditional broadcast giants, as it has always been. There were surprises in the bidders' list. Star India's chairman and CEO, Uday Shankar and his team, were up against some unforeseen opponents like Facebook, Jio and Airtel. Amazon had also picked up the bidding documents. It was not just the names but the amounts that they bid that caused a flutter. Mark Zuckerberg's California-headquartered social networking giant tabled a bid for Rs 3,900 crore (about Rs 870 crore of collective bids were made for Rest of the World media rights) - not many saw it coming.

What has changed in India's sporting world so much that marketers have no qualms about jumping into the arena with bags of money?

afaqs Reporter! went ahead and asked three wise men - GroupM's Vinit Karnik, Kwan's Indranil Das Blah and Deloitte India's Jehil Thakkar - for their viewpoints.

Edited excerpts:

Vinit Karnik - Business Head, ESP properties

What makes Indian sports so attractive to marketers?

Vinit KarnikWhen I was in school, sports in India was not a priority, unlike in the West. The reason for that was the lack of infrastructure, attention and investment at the school and university levels. Now, we are heading in the right direction and that has changed things. Having said so, we have just started and there is a lot more to cover. Today, sports in school is a different ball game altogether.

What made sports big is the way media presented and packaged it. As broadcasters invested in packaging and promoting, the results showed. Take the PKL, for example. Star garnered 1.8 television ratings (TVR) which is a big deal. Even some of the India vs Sri Lanka cricket matches in the series that ended recently, did not get these kind of ratings. And that's where kabaddi stands today, purely because of the way Star has packaged and presented it.

If you look at the sports landscape today, it is pretty much privatised. That has led to quicker action by various sports bodies. BCCI is an independent body and can make its own decisions. Kabaddi is run by Star and Mashal Sports - the Amateur Kabaddi Federation of India (AKFI) has handed over the rights to run the sport to Mashal Sports. The All India Football Federation (AIFF) has given the rights to IMG-Reliance, while the Badminton Association of India (BAI) has given the rights to Sports Liv for a period of 10 years.

Privatisation is helping build a professional culture to run, create and innovate and then they are pushing it from a pure play-business standpoint, which is benefitting the entire sports ecosystem. Privatisation of sports has made it a business friendly market and people are now investing in sports because of that.

The professionally-run ecosystem gave a reason to audiences sitting at home to sample sports. After that came step 2, when they wanted to experience it and they started visiting stadiums. The third step is more interesting; after they had a great experience, they wanted to be a part of it. While the young ones wanted to join the sport, the elder ones in the stadium wanted to motivate people to take up sports.

It's not the IPL media rights cost alone that actually makes sports big in India. The collective efforts from all quarters is shaping the sports ecosystem. You cannot single out any - you lack in one and you cannot stride forward.

In the last one year, about Rs 1,500 crore of new money has come in to emerging sports through advertising, media rights and licensing, among other things. That's a great success story. We have seen the growing numbers (both in viewership and revenues) that ISL and PKL have got in each edition and I won't be surprised if both these properties grow more than 30 percent (in the next season compared to the last one).

Having said that, if as a broadcaster you want to scale up, you will need to have cricket in your kitty. Cricket is high-risk, high-return, while in other sports, the acquisition cost is low and so is the return. You can survive without cricket, but to scale up at least in the next five years, you need to have cricket.

The gap that I see in the sports story today, which will come and bite us tomorrow, is our lack of attention at the grassroots level, in smaller towns and rural India. Everything is hunky-dory at the top of the pyramid. But is the story the same at the bottom?

I don't think so. We need to go deeper and create school, college, university level programmes around sports. The academic business - with different education companies coming in - has matured in India. The same story needs to be replicated in sports and that is the biggest challenge. We need to have more public-private partnerships to create a good structure at the grassroots level.

From the content point of view, I am happy with the amount of live content available. An Indian can watch live action of any event just sitting at home, which is a great thing. Having said that, our broadcasters need to work on the other big constituent of sports content, non-live content. Non-live programming can help an enthusiast learn and know the game better. There is an audience which wants to know more about the players, clubs or teams, grounds etc. and non-live content feeds those needs.

It has started in India and it will be interesting to see what Star does around the IPL.

Indranil Das Blah - Founding Partner KWAN & CEO, Mumbai City FC

What makes Indian sports so attractive to marketers?

Indranil Das BlahWe need to view the sports story of India in two parts. One is the role of cricket and how the sport grew in India and second is the 'other sports' sector. The emergence of Sania, Saina and Sindhu as saleable brand ambassadors shows how big sports in India is today.

Brands are slowly waking up to the fact that there is enough ROI with other sports. Moreover, even if one is ready to pay the high association fee, there is not much cricket inventory available. There will be matches that feature India, ICC events and IPL. In terms of players, there is a huge gap after Virat Kohli and MS Dhoni.

Brands are also realising that instead of spending crores on cricket, they can spend a fraction of that money and get enough mileage by associating with a non-cricket entity, especially those that do not have very deep pockets but are eyeing a more targeted marketing. For a niche brand that is targeting urban centres, football or Sania Mirza makes more sense. If you want nationwide mass reach, cricket works better.

Conventional advertisers realise that they have many options and therefore, do not need to put all their eggs in the cricket basket. This is making sports a very interesting space and people are sensing way more opportunity today.

We are happy with the amount Mumbai City FC got from our sponsors. If you want to reach out to the urban youth aged 18-30, I think football is a much better bet than cricket. Having said that, I think there is a lot more potential and there will be a lot of growth in the coming years.

I don't see next month's under-17 football world cup to be held in India changing things overnight for football in the country since it depends on the performance and I don't see India's performance meeting the expectations. Football followers in India who know the scenario, will understand that it will be a great performance even if India manages to win a single game. But the mass reaction would be: 'India is playing a World Cup, how come the team isn't winning?' The world cup will give some sort of impetus to football in general, but not make a very big difference to business.

The sports scenario in India is such that nobody was surprised at the Rs 16,347.5 crore figure spent by Star on IPL and that tells a big story. Honestly speaking, I was surprised at Facebook's bid. I expected a Jio or a Hotstar to do that, but Facebook, which has probably never paid a penny for acquiring content till date, placing a Rs 3,900 crore bid was not something I expected to see.

While the sports story has been great so far, we need to have a longer-term approach in terms of pricing. Just because a property is doing well, we should not flog and oversell it. Whether it's the IPL, the ISL or the Sindhus and Sainas of the world, we need to have a long-term growth plan. We need to be more structured in our approach to sell it well. Sometimes, it is okay not to associate with certain brands or certain projects because in the long run, you are building a brand and that can be a league or a sportsperson. Each brand needs to identify what it should stand for and then accordingly go out into the market.

Jehil Thakkar - Partner, Deloitte India

What makes Indian sports so attractive to marketers?

Jehil ThakkarThe sports story of India is at a very healthy stage and will continue to do better because sports has become a major driver of audience across TV, OTT and all other platforms and the content piece has grown beyond cricket.

Kabaddi is a mass sport today and we have world-class performers in badminton as well. Tennis has managed to hold its niche. With the growth of media rights revenue, the sports sector started to invest in marketing, promotion and training. The feeling is that great times lie ahead.

We need more investments at the grassroots level. Infrastructure beyond the top cities has to be built. India is still a growing market - the TV universe is still expanding, digital has just begun while advertising values are going up. In such a scenario, the Rs 16,347.5 crore spent for IPL broadcasting rights is not surprising considering that the last bid was placed a decade ago.

Sports is big because of the star players whom viewers at home love, admire and aspire to emulate. A growing market coupled with emerging stars who can inspire youth makes sports an interesting business and there is huge headroom. India is nowhere in the global football circuit, although there are encouraging indicators; for instance, the Barcelona Academy has invested to setup a football school in India.

(The original version of this interview was published in our magazine afaqs! Reporter on September 15, 2017)

A Note From the Editor

Rs.16,347.50 crore bid. Dangal. Indian Premier League. Dhoni. Media rights. adidas. Star India. PV Sindhu. Amazon Prime Video. Kabaddi. Silver medal. Sultan. Inside Edge. Mithali Raj. Live streaming. Saina. BCCI. Virat. Endorsement. Da da ding...

That right there is a quick sports montage in words, spread across the inter-connected worlds of media, brands and popular culture. If one carefully goes over all the movies, advertisements, and television and digital properties that became popular over the past year or so, a common theme that will stand out like no other is sports.

There is no doubt about two things: One, in India, the spotlight, local and international - (just days back, Facebook bid a whopping Rs.3,900 crore for IPL's digital rights!) - is on sports. And two, this is more than a passing phase; sports is the next big thing.

Which is why, this fortnight, we decided to speak to three professionals, Vinit Karnik, Indranil Das Blah and Jehil Thakkar, who represent very different spaces but are equally clued into the business of sports. We spoke to them about this boom. What makes sports such a lucrative business in India? What are the determinants of this phenomenon? What makes media experts confident that a broadcaster can not just recover Rs.16,347.50 crore within five years, but also make profits by then... all on the back of sports?

The role that packaging, presenting and promoting sports content in an attractive way has played is lost on no one. Privatisation of sports is another big factor; the federation game, as our experts point out, is over.

More importantly, where do they see the arc headed in the future? How will advertisers ride this wave? While all three interviewees gave us different opinions, coloured by their respective professional lenses, they're unanimous in their view that taking this boom to the next level and sustaining it in the long term, will require effort at the grassroot.

ASHWINI GANGAL