Recently, the fourth edition of the Sporting Nation in the Making India report compiled by ESP Properties, the sports and entertainment programming specialist arm of GroupM, and leading sports portal SportzPower, presented its examination of the India Sports Sponsorship market during the calendar year 2016. Taking a closer look at cricket, football, soccer, and other sports from a sponsorship and franchise fee perspective, the report presents the following findings.
According to the report, in 2016, Team India played 44 international games as against 29 matches in 2015—that’s 51 per cent more games. Of these 44 matches, 34 games were in bilateral series, 5 were ICC matches, and 5 were Asia Cup contests. Translated into money terms, team sponsor Star India pays the Board of Control for Cricket in India (BCCI) Rs 1.92 crore/USD 0.28 million per match played during bilateral series/Asia Cup and Rs 0.61 crore/USD 0.09 million per match for ICC tournaments.
The math, therefore, works out as Rs 74.88 crore/USD 11.01 million for 34 bilateral and 5 Asia Cup matches, Rs 0.61 crore/USD 0.09 million for 5 ICC match-ups totalling up to Rs 3.05 crore/USD 0.45 million in 2016, as against Rs 44.16 crore/USD 6.49 million and Rs 3.66 crore/USD 0.54 million totalling Rs 47.82 crore/USD 7.03 million the previous year.
Additionally, Nike pays around Rs 60.0 crore/USD 8.82 million a year to the BCCI to sponsor the Indian cricket team's oﬃcial kit.
Coming to India’s money league, IPL Team sponsorship grew by 9.5 per cent, riding on the back of 22 new brands that tested the waters with IPL franchises during the season.
What is also new and bodes well going forward is that franchises have started monetising their digital and social assets. Digital is also becoming an integral part of the sponsorship oﬀering now. Intrinsically linked to the deepening role of digital in engaging fans is the rise in demand for behind-the-scenes content in relation to IPL teams, opening up avenues for greater monetisation in future.
And while many new brands hopped aboard the IPL bandwagon, one category that stood out were the smartphone players, which were ﬁghting tooth and nail for greater share of voice in the world’s premier T20 league. Summing up, team sponsorship in cricket grew 25.85 per cent in 2016, from Rs 341.2 crore/USD 52 million to Rs 429.4 crore/USD 63 million.
For football, it was more about a holding operation. Overall, football saw a drop from Rs 99.0 crore/USD 15 million in 2015 to Rs 98.2 crore/USD 14 million in 2016.
Concomitantly, ISL franchises also saw a decline to Rs 37.2 crore/USD 5.47 million as against Rs 38.0 crore/USD 5.85 million in the year ago period, reason being the number of sponsors have gone down marginally.
Staying with soccer, and as was the case in 2015, the tale was also about Indian brands leveraging European Football, English Premier League in particular, to make global statements.
Three-year deals announced in September 2015 by global IT services providers HCL Technologies and Wipro with Manchester United and Chelsea respectively, carried forward into 2016. So did Apollo Tyres; its association with the Red Devils that has continued since 2013. The three combined added Rs 36.0 crore/USD 5.29 million to soccer’s team sponsorship kitty.
Football apart, other sports did exceedingly well, Kabaddi, in particular, leading the charge, with its two-season swing. From Rs 118.0 crore/USD 18.15 million in 2015 to Rs 172.0 crore/USD 25.29 million in 2016 is a 45.76 per cent increase. That it was achieved despite Vijay Amritraj’s Champions Tennis League getting scrapped is primarily because the market accepted a two-season PKL with open arms. Averaging Rs 31.0 crore/USD 4.56 million per season, Rs 62.0 crore/USD 9.12 million is what PKL pulled in as team sponsorship in 2016.
The year also saw the return of the Indian Badminton League in its new Premier Badminton League avatar, adding approximately Rs 8 crore/USD 1.18 million to the team sponsorship pie.
Going by the 2016 performance, the expectation is that PKL, ISL, and Pro Wrestling League will be the key team sponsorship drivers behind big elephant IPL in 2017 as well. There will, of course, be at least one new Sports League, that of Table Tennis, this year. Just how much it—and any others that may make an appearance—will add to the overall pie, will depend on the interest levels it can draw from brands spoilt for choice.
The defining moments in the growth of the sports industry revolved around the leagues and their franchises. The ﬁgures might present a different picture as there was hardly any movement with Franchise Fees rising a meagre 1.24 per cent by Rs 6.7 crore/USD 0.99 million to Rs 548.0 crore/USD 81 million in 2016. This would suggest a status quo in activity with all leagues and franchises continuing to go through the calendar in a scheduled manner. Not at all providing an inkling of the amount of “going in, coming out” that the year witnessed.
The addition of two leagues (Premier Badminton League and Tamil Nadu Premier League) and two IPL franchises (Rising Pune Supergiants and Gujarat Lions), two editions of the Pro Kabaddi League (PKL), the deletion of Champions Tennis League, a watered-down version of the IPTL, postponement to 2017 of the Pro Wrestling League and more happened, but it did not really move the needle in any signiﬁcant manner in regards to Franchise Fees.
On the cricket front, there has been a marginal de-growth of 0.97 per cent from Rs 340.1 crore/USD 52 million in 2015 to Rs 336.8 crore/USD 50 million in 2016.
In the year, what is noteworthy is that the BCCI waived oﬀ the franchise fee commitments of the suspended CSK and RR till their return to the IPL in 2018. CSK and RR’s “temporary” replacements RPSG and GL paid Rs 16.0 crore/USD 2.35 million and Rs 10.0 crore/USD 1.47 million respectively to the BCCI. But they also forfeited a hefty paycheck payable to each franchise from the central pool. As for the TNPL, its eight franchises collectively paid the N Srinivasan-controlled Tamil Nadu Cricket Association around Rs 33.0 crore/USD 4.85 million.
In Other Sports, the franchise contribution has shown a growth of 4.97 per cent from Rs 201.2 crore/USD 31 million to Rs 211.2 crore/USD 31 million. This includes an additional Rs 18.0 crore - Rs 20.0 crore/USD 2.65 million - USD 2.94 million from another edition of the PKL in 2017 itself. Though Other Sports lost out from the pushing forward of the PWL and fewer franchises in IPTL, the return of PBL to the arena saw its six franchises collectively pay nearly Rs 20.0 crore/USD 2.94 million to league owner Badminton Association of India and commercial rights holder Sportzlive.
A more stable calendar is expected in 2017, where the addition of a table tennis league, a powerboating team-based race, expansion of the Futsal property, and growth of other regional leagues should add to the overall total. A real boost, however, will ride on the future of the two tennis leagues. While the CTL and IPTL will be hoping for a comeback, all facts and logic point, unfortunately, to a quiet demise. But even without these two properties, the fact that most others have settled into a working model arguers well for leagues and their promoters.
Team Sponsorship has grown by 25.33 per cent - India Cricket has been the biggest contributor with 51 per cent more matches played in 2016 vs. 2015
IPL Team sponsorship grew by 9.5 per cent - 22 new brands tested ground with the IPL teams
Team sponsorship in other sports has kept pace with the category despite WKL and CTL shutting shop
Franchise fee pie has remained constant despite additions (TNPL, PBL and two teams in IPL) and deletions (WKL, CTL, CSK and RR)
Source – ESP Properties
2015 Conversion Rate 1$ = Rs 65
2016 Conversion Rate 1$ = Rs 68