This week, Group M/WPP came out with their 10th annual report – Sporting Nation – on India’s fast-growing sports industry. The report, among other things, tracks the sponsorship and advertising industry in the country across sports, including real-time brand value and media spends.
Sporting Nation has pegged the total sports industry spends for the year 2022 at Rs 14,209 crore, registering a 49% growth from the year 2021.
The sponsorship spends, for instance, that stood at Rs 2,886 crore in 2021 saw a massive 105% jump to Rs 5,907 crore in the following year.
Of the total of Rs 14,209 crore, cricket alone has garnered the lion’s share of Rs 12,115 crore while all other emerging sports have received just over Rs 2000 crore.
Network18 spoke with Vinit Karnik, South Asia head for sports, e-sports and entertainment at Group M.
Excerpts…
The pace at which the sports industry is innovating, especially with the advent of technology and new-age businesses, cricket has to be the foremost catalyst in identifying industry trends, right? Because nothing sells like cricket does. So, what’s cricket telling you about this changing industry right now?
VK: Cricket is the one sport that has been playing on the front foot in terms of steering the industry through the fluctuations of the path of commercialization over the years. The franchise format was introduced to the nation in 2008 with the unveiling of the IPL, a property that has since been the money-spinner of Indian sports.
The 2022 performance further serves to highlight this position of pre-eminence for the cherry and timber sport in our minds, as we saw it contributing a mammoth 85% of the total Sports Industry revenue, which equates to INR 12,115 Cr. Despite the huge base value in cricket, the growth we saw for the No.1 sport in India was 44% – in terms of sponsorship, endorsement, and ad expenditure.
In Sponsorship Spends (Ground, Team, and Franchise), cricket delivered 75% of all sports, whereas the corresponding number for Endorsement was 85%. In media spends by brands, the role of the top-scorer was even more pronounced, with a whopping 94% of all ad expenses being linked to cricket-related content, across all media vehicles.
With our country serving as the epicentre of cricket consumption in the world, it is no surprise that Indian brands are making strategic investments in foreign leagues of the sport, thereby ensuring that all grounds are covered as they are bowling to the field, in terms of engaging with followers of the action from the 22 yards!
From 2021 to 2022, there’s been a 105% jump in sponsorships. That’s a mind boggling number. But how much of that 105% is cricket alone? This year, the IPL cracked the 1k cr per year mark in terms of sponsorships.
VK: In Sponsorships (Ground, Team & Franchise Fee), Spending on Cricket Sponsorship grew by INR 2191 Cr, i.e., 99% and outpaced 2021’s total sponsorship spends. Growth can be attributed to the following reasons:
• Indian cricket team playing a total of 67 matches in 2022, compared to 36 matches in 2021.
• The Indian Premier League (IPL) adding two new franchises and increase in total number of matches from 60 to 74 which itself signifies a huge rise in the overall monetization potential for their fixtures.
The more important question is, having touched the peak (in sponsorships), the challenge for IPL now would be to sustain what’s been achieved right? And what are you sensing? Will the property be able to hold on to these numbers, or move any further from here?
VK: IPL has been successful in creating a loyal fan base and has managed to attract a diverse audience base. However, it would need to continue to innovate and adapt to changing consumer preferences and expectations and attract new viewers across age group and geographies. Like WPL, Junior IPL (may be under 16 or 19) is a natural extension to IPL and can be a great scouting ground for men’s IPL. With this, the IPL as a property expands itself to men, women and juniors, which also can be expanded internationally to build more fanbase which can drive global sponsorship deals.
Ultimately, the success of the IPL will depend on its ability to continue delivering a high-quality, innovative, and entertaining product that resonates with audiences across India and beyond. If the league can continue to do so, there is a good chance that it will be able to maintain and possibly even grow its current numbers in the future.
While the growth in numbers is impressive, cricket to non-cricket ratio is still so skewed. Are you surprised that despite Neeraj Chopra grabbing such an exciting gold medal in Tokyo, PV Sindhu’s consistency at the highest level, things haven’t been looking up the way they should?
VK: It is true that cricket continues to dominate the sports scene in India, and the popularity of other sports lags. But we have come a long way, we have seen the YOY growth in emerging sports. It is worth noting that the government and private sector have been taking steps to promote and support other sports in recent years, but changing the sports culture of a country takes time and effort. In the end, it will take sustained efforts from all stakeholders to promote and develop other sports and create a more balanced sports culture in India.
The trend lately has been where potential sponsors, who want to be associated with BCCI or IPL as official partners, aren’t looking at long-term relations. The trend seems to lean more towards ‘quick-fixes’. A new fin-tech or start up brand comes, maybe wants to see a jump in their subscription numbers and probably thinks associating with IPL for a year will give them the results. They get those numbers and move on. Isn’t this more or less the ongoing sponsorship trend? How healthy is it and what does it tell you in the long run?
VK: This trend is mainly for the technology start-ups look for the initial spikes for app downloads or subscription numbers. Start-ups typically have resources that are time and task dependent, which more often are focused on short-term wins and build brand over mid and long term.
The league needs to create a sponsorship ecosystem that encourages both – short-term and long-term partnerships and benefits both, the league and its sponsors. This can be achieved by creating a clear sponsorship framework and offering value to sponsors beyond just advertising and branding opportunities, such as access to data and analytics, fan engagement, and exclusive experiences.
Has the IPL managed to attract international brands the way it needs to? Recently, we heard the news of RCB getting Qatar Airways on their jersey. Now, if true, that’s such a heartening development. On lines with Mumbai Indians getting Samsung on their jersey couple of years ago. Given the size and growth of the league, shouldn’t there be more such international brands associating with IPL?
VK: IPL has managed to attract a significant number of international brands as sponsors, and this has been a key driver for its success. Many global brands have recognized the enormous potential of the Indian market and the IPL’s popularity and have invested heavily in the league to reach a wider audience.
Recent International brands who have invested in the IPL are Aramco – Orange & Purple Cap, DP World – DC, Qatar Airways – RCB Front Jersey, DHL – Mumbai Indians
The IPL’s ability to attract international brands can be attributed to a number of factors, including its massive viewership, the high quality of cricket on display, and the league’s marketing and promotional activities. The IPL has also been successful in creating a highly engaging and entertaining product that appeals to a wide range of audiences, both in India and around the world.
We’re witnessing a huge shift in consumption trends too. With the advent of JioCinema – in live sports broadcast; the onslaught of technology; and the slick mediums setting in – how we consume sport is changing forever. What kind of a near and distant future do you see settling?
VK: The rise of new technologies and platforms is transforming the way that fans consume sports content, and this trend is likely to continue in the future. The widespread adoption of mobile devices and streaming platforms has made it easier than ever for fans to access sports content on-the-go, and has opened up new opportunities for leagues and broadcasters to reach a wider audience.
In the near future, we are likely to see more innovations in the way that sports content is delivered and consumed. This could include the use of augmented and virtual reality technologies to create more immersive viewing experiences, as well as the integration of social media and fan engagement tools to create more interactive and engaging experiences for fans.
Overall, the future of sports consumption is likely to be characterized by continued innovation and evolution, as leagues and broadcasters seek new ways to engage with fans and create value for their sponsors and stakeholders.
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