The Indian sports industry in 2016: challenges and opportunities

Nielsen Sports Cricket

India’s relationship with cricket needs little introduction, but while the sport – something close to a religion in the country – continues to drive the growth of the Indian sports industry, other sports are adding rich diversity to the sector. Following the city-based franchise model which has worked well for the Indian Premier League (IPL), sports such as hockey, football, kabaddi, tennis and badminton are in the process of attracting new audiences and fans to the sport, crafting commercial propositions for sponsors and quenching the thirst of a country eager for live entertainment content. Ahead of a year which will see the ninth season of the IPL and India host the World Twenty20, details of which were announced last week by the International Cricket Council, it is an opportune moment to take the pulse of the country’s burgeoning sports industry with Ravi Chavan, Repucom’s Mumbai-based Vice President of South Asia.

Cricket: Leading from the front

Ravi Chavan | Repucom

Ravi Chavan, Repucom Vice President of South Asia

“Cricket has obviously been the major driving force of the Indian sports business industry,” Chavan begins, “and IPL has been the real game-changer for the industry. From a commercial point of view the industry has grown in leaps and bounds. Favourable socio-economic dynamics and a growing middle class with disposable incomes has generated a huge demand for live entertainment content, leading to the emergence of new sports leagues, properties and international events finding their way to India. There is a lot of commercial buzz, a lot of new leagues, a lot of international content coming, which is great. People are now looking at sport business as a career which ten years ago was not an option. Obviously there’s a lot more to be done on the development and governance side of things, to build a sporting culture and nation. India is like a big train – it takes a while to turn around.”

Cricket retains its dominant position in India, its popularity going well beyond sport and comparable only to Bollywood as a form of entertainment and media product. March’s World Twenty20, to be staged in India, is a “guaranteed commercial success” according to Chavan, but even in a cricket-obsessed nation he stresses the importance of a winning national team.

“The 2011 ICC World Cup was a huge commercial success and what drives that was the fact that India went all the way and won the World Cup,” he says. “It will be commercially successful but for it to be a super, super hit it needs the Indian team to go as far as they can in the tournament. If India goes out in the early stages, the tournament, including advertisers, broadcasters and sponsors, would certainly take a hit.”

The World T20 is a ten-team tournament, which should ensure competitive games. “The format is good,” Chavan confirms, “and Twenty20 brings a much wider demographic to the table – including women and youth whose attention is craved by advertisers. Broadcasters like Star are already out with creative ads, amplifying the tournament. It’s an event that will drive a lot of premium advertising and sponsorship; it’s clearly a highlight of the 2016 calendar.”

Settling for second – and why that’s ok

With a raft of start-up leagues and events launched in India over the past couple of years, it is no surprise that Chavan is often asked about the possibility of cricket one day being toppled by another sport in terms of fan interest and popularity. In short, don’t expect it to happen any time soon.

“Do other sports really need to think about becoming number one in India? They don’t,” Chavan argues. “They can be number two, three, four, five or even number six in India and still have a healthy popularity, a solid economy and their own space because the market is so huge. Cricket has the advantage of being a sport which has been commercialised on the back of the Indian national team’s success on an international stage. As an Indian there is something tangible to claim, brag and be proud of as we have won three World Cups – two one-days and one T20.”

Since 2013, no fewer than five major sports have developed and launched city-based franchise leagues in an attempt to replicate the success the Indian Premier League has enjoyed with that model. The Hero Indian Super League football competition had its first season in 2014, as did the eight-team Pro Kabaddi League and the Champions Tennis League. The Indian Badminton League and Hockey India League both launched in 2013. “It’s a tried and tested model,” Chavan points out, “but it’s too early to tell [which ones will be a success] because at the end of the day these properties are reliant on fans. Developing a fan base is a long term activity. More mature, Western franchises like the New York Yankees or the Manchester Uniteds have a legacy, a history and a fan base which has been built over the last 50 or 60 years and more. That’s a challenge for Indian rights holders.

“There are other big challenges in that all these leagues in India have a very limited duration – they are all one or one and a half months only, which limits the opportunity for fan engagement quite a lot. Then there’s scheduling, as most leagues want to test the water as well, so having a compact format works for the moment. The availability of players is another factor: most of these leagues involve top players who might not be available for a longer period.”

A sleeping giant?

“Football, as Sepp Blatter once said, is a sleeping giant in India,” says Chavan, before adding with a smile: “And it’s been sleeping for quite a while now.” But times are changing and the successful launch of the Indian Super League, plus FIFA’s award of the 2017 Under-17 World Cup to India, hint at a brighter future for football in the country. “It’s definitely there,” says Chavan of the desire to see football grow in India and given the country’s enormous population it is little surprise that the major European clubs have also been seeking out ways to enthuse Indian fans, either online, through region-specific sponsorships, pre-season tours or the development of soccer schools.

That international interest in the market presents an additional challenge for the Indian Super League and its franchises. As Chavan puts it:

“In cricket, the IPL is the best league in the world. The Hockey India League is the best league in the world – the best players play there – so it’s not a challenge for them. The Pro Kabaddi League is a domestic league so it’s not a challenge for them. For football, though, it’s a major challenge. The football fan base in India is driven by the popular Western leagues, like the Premier League, La Liga and the Bundesliga.”

Searching for heroes

While many of the start-up leagues, including the IPL, import foreign stars to compete, Chavan believes the next growth spurt in India’s sports industry will come when the country begins to create more of its own star performers. “To become a truly great sporting nation like a US or Australia, there is some distance to catch-up,” he says. “I guess it will happen in time and the moment that happens the growth will happen very quickly.”

While much of the current investment in grassroots sporting programmes and facilities comes from private enterprises – JSW Group’s construction of a national sports institute near Bangalore is a prime example – Chavan is confident that India’s relatively new government will spearhead “a lot of pushing in the coming years to get the foundations right”. He adds:

“When that happens I wouldn’t be surprised to see India becoming one of the top sporting nations, both from a commercial and performance perspective.”

Rio 2016: an Indian perspective

“The Olympic Games is something that doesn’t quite cut the mustard commercially in India, compared to the FIFA World Cup and other global events,” Chavan reports. “The first reason for that is India’s poor track record at the Olympics.” India took home just six medals from London 2012, none of them gold, in badminton, boxing, shooting and wrestling. “That doesn’t excite people,” Chavan adds.

Looking ahead to Rio 2016, which will be broadcast live in the country by Star India, he sees a mixed picture.

“Apart from the opening and closing ceremonies, I don’t really see it being a major crowd-puller in India. Of course there will be a lot of coverage of medal hopes, of individual athletes in particular disciplines or perhaps the national hockey team. But I don’t really see it making much of a buzz from a commercial perspective, other than brands that have got involved with medal hope athletes in a brand ambassador capacity. They will try and amplify that but there isn’t really the upfront investment compared to something like cricket. The opening ceremony will certainly drive interest and audience but apart from a few sports such as hockey– it’s not an event which is expected to drive significant viewership.”