The Indian sports sponsorship market grew 12 per cent in 2015 to touch a size of Rs 5,190 crore, according to a KPMG report titled The Business of Sports. The potential value of the sports infrastructure market in the country is Rs 80,000 crore, says the report.
This is, however, nothing compared with the size of the global sports market – comprising infrastructure, events, training, manufacturing and retail of sports goods – estimated at Rs 37.8–44.2 lakh crore. For instance, the Indian Premier League (IPL) – India’s biggest and richest sporting event – estimated at Rs 2,530 crore in the report, is around 0.02 per cent of the size of the National Football League, estimated to be Rs 87,130 crore.
The drivers for growth in sports sponsorship are technological support throughout the system, increasing availability and consumption of sports online, increasing options in sporting events (beyond cricket) and use of social media to spread awareness and excitement about events.
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The Indian sports sponsorship market grew 12 per cent in 2015 to Rs 5,190 crore
The money flowing into sports sponsorship is mainly from five segments – on-air advertising, on-ground advertising/sponsorship, team sponsorships, franchise fees and endorsements
The sector saw 30% increase in viewership in 2015 over 2014, with females forming a large segment of the growth story
Jaideep Ghosh, partner and head (transport, leisure and sports) at KPMG in India, says: “The country’s sports sector is going through a significant transition. In February 2016, the government accorded industry status to sports infrastructure, which is expected to attract investments from the private sector, thereby not limiting its role to corporate social responsibility activities and non-profit organisations.”
The money flowing into sports sponsorship is mainly from five segments – on-air advertising (51.9 per cent), on-ground advertising/sponsorship (19.8 per cent), team sponsorships (10.8 per cent), franchise fees (9.4 per cent), and endorsements (8.1 per cent). Endorsements refer to individual players endorsing brands and brands sponsoring players’ kits etc.
Cricket continues to dominate sponsorship money with 51 per cent of on-air sponsorship revenue, 61 per cent of team sponsorship revenue and 64 per cent of endorsement revenue coming from it.
Shrinivas Dempo, chairman of CII Summit on Business of Sports and Entertainment, and chairman and managing director of Dempo Shipbuilding & Engineering, adds: “The past 5-7 years have been the most dynamic for the sports sector in India with some fundamental changes. Sports not only provides an active branding and marketing opportunity to investors, but has also created value for fans all across. Addition of various sporting leagues in India has invited tremendous support and presence of the corporate sector.” Dempo is also actively involved with football through teams in the I-league and the Indian Super League.
Brands have recognised the power of sports since the genre has delivered healthy viewership numbers. The sector saw 30 per cent increase in viewership in 2015 over 2014, with females forming a large segment of the growth story. The latest edition of the IPL saw 41 per cent viewership coming from the female audience, while in the Pro Kabaddi League, it was 39 per cent. Regional games packaged in interesting league formats have been successful in garnering rural viewership as well.
The report identifies key issues facing the sports ecosystem in India across segments of governance, sports events, and infrastructure development, among others, while offering recommendations to tackle these problems. It also presents a comprehensive view of the governance structure of sports in India, outlining the roles and responsibilities of major governing entities.
“India has a long way to go before it emerges as a serious player in the world of sports. The country is facing a moment of truth after its performance at the 2016 Rio Olympics. To initiate a strong foundation for the development of sports in India, the country needs to focus on three major aspects — improving governance and infrastructure, building a sporting culture, and deploying a focused approach to winning medals,” Ghosh adds.
