The emerging business of sports  

The Confederation of Indian Industry (CII) recently released a report, ‘The Business of Sports’ at a summit of sports and entertainment, organized in Mumbai. The report covers all angles of an emerging industry. With sports as the next big industry in Goa thanks to the ISL and other events, the report’s findings are important to potential entrants as well as existing stakeholders. Extracts* from the report are reproduced below

The global sport market comprising infrastructure, events, training, manufacturing of sports goods is estimated at US $ 700 billion which is approximately one per cent of the global GDP.

In India the sports sector is experiencing a sea of changes with all-round development initiated by the government, the private sector as well as non-profit organizations. The government is introducing game-changing schemes such as ‘Khelo India’ to address issues on infrastructure, talent scouting and training facilitation. Private sector and non-profit entities are also increasing contribution to the sector by organizing leagues and tournaments, funding sports persons and grass root development.

The sector is going through 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 scope to just CSR and non-profit organizations such as Olympic Gold Quest.

Moreover cricket continues to dominate Indian sports, however advertisers, broadcasters and viewers have also increasingly gained interest in kabaddi, football and badminton. Following the Indian Premier League (IPL) model for cricket several other sports franchises have sprung up in the past two-three years.

Sports that have gained greater fame due to such league based events include hockey, kabaddi, tennis, badminton and wrestling. These events have attracted more sports persons, viewership, broadcasters and sponsorships into the business of sports.

In 2015 the sports sponsorship market in India grew approximately 12 per cent to reach Rs 5,190 crore. Cricket maintained its stronghold in sports advertising with 51 per cent share in ground sponsorships, 61 per cent in team sponsorships and 64 per cent in endorsements. However league based events for other sports such as football (Indian Super League), kabaddi (Pro kabaddi League) have propelled the interest of viewers and sponsorships towards these sports.

Technology, social media and online viewing among others are some of the major trends driving the sports industry. Game officials use innovative technology such as hawks eye and video refereeing while broadcasters are using digital media to reach out to an increasingly tech savvy audience. Sportspersons have also been using technology to improve their performance and analyze game.

Like in other industries, social media is acting as a game changer. It is working as a catalyst in harbouring the interest of fans globally. By engaging fans through social media, sports right holders have discovered new communication channels with their audience. Moreover a large number of sports persons use social media to connect with their fans and endorse their brand affinities.

Online consumption is another trend. Viewers are favoring online streaming of sports events as it gives them the flexibility of time and space. About 52 per cent use tablet or smart phone to access sports content while watching television.

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 yet another underwhelming 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- governance and infrastructure, culture and focused approach to winning medals.

India could gain by utilising leading practices of sporting nations to develop a comprehensive framework for sports governance and management. According to the managing director of a leading sportswear brand in India, the most important element for developing a culture of sports in India is a change in the mindset of Indian parents208, who typically discourage their children from spending too much time on sports. The key to countering this mindset is a change at the base level, where talent can be identified and groomed at an early age — thus providing confidence to Indian parents.

When legendary Brazilian footballer Pele visited India in October 2015, his advice on how to develop football in the country was, “start working at the base, it is important to train kids for the future”.

Therefore, in order to develop a strong sporting culture in India, the government and the private sector/non-profits can work in tandem and contribute to grassroots development.

Initiatives which private players can undertake to develop sports are setting up leagues. In the past two to three years, there has been a surge in the number of leagues set-up across multiple sports. More league-based tournaments for other sports that India has the potential to excel in (for example, archery, boxing and shooting) can help further promote the idea of sports as a viable career option.

School level tournaments for talent scouting can be set up for identifying talent. Several corporates, non-profits and professional leagues in the country are involved in identifying young sporting talent through small-scale tournaments and training programmes. However, the accessibility of these programmes is limited, and thus, many more organisations are needed to expand the reach to rural areas as well.

Soft infrastructure in addition to the physical infrastructure, sportspersons also need ‘soft infrastructure’ for their development; non-profits can go a long way in grooming talented sportspersons through mentorship programmes and facilitating training for the coaches. Employ a focused approach towards selective medal-intensive sports. An analysis of medals won by countries at the Olympics reveals that the leading medal winners have consistently garnered most of their medals from a select set of sports, and the trend continued at 2016 Rio Olympics as well.210 For the U.S., which  led the medal tally at 121, the top three sports (by the number of medals won) accounted for 63.6 per cent of the total medals won at the 2016 Rio Olympics.

This is indicates that leading medal winners strategically focus on a specific set of sports and try to maintain their lead. For example, China has displayed exemplary leadership in table tennis; the country has won 28 gold medals from a total of 32 events across eight Olympics from 1988-2016 (both inclusive). Similarly, the U.S has consistently led swimming events.

India has also displayed some potential in badminton, boxing, wrestling and shooting — with all of the 12 medals won in the last four Olympics (2004-16) coming from these four sports.

Moreover, at the 2016 Rio Olympics, a select few athletes won a large number of medals for their countries; for example, Usain Bolt alone accounted for 27.3 per cent of the total medals won by his country, Jamaica. Similarly, Hungarian swimmer Katinka Hosszu earned her country 26.7 per cent of the total medals.

In conclusion, there appears to be a clear pattern. Countries win medals by focussing their efforts on a small number of select individuals in particular sports. Therefore, the government can start focussing on sports that have displayed high potential, such as badminton, boxing, wrestling and shooting.  Focus on medal intensive sports such as swimming and athletics to increase the likelihood of a win.

India has a long journey ahead on its path to developing a strong sports culture. However, the ongoing developments indicate a promising future. A rising number of sports start-ups, significant growth in gym memberships and the increasing number of marathoners in the country, indicate a clear trend of growing consciousness about health and fitness amongst the Indian youth. The early success achieved by league-based events across multiple sports indicates a strong potential for Indians to consume sports other than cricket. This also encourages more and more people to consider sports as a profession for themselves or their children.

Increasing involvement of non-profits as well as for-profit organisations in growth and development of budding sportspersons is also a boon for the country. Moreover, with the introduction of schemes such ‘Khelo India’, the government is working on providing a robust structure for sports development. In essence, India’s road to sporting glory is brightly lit with an inclusive effort from all the stakeholders.

*Experts from report on the busines of sports released by the CII in Mumbai