Sports, the next big bet industry

Next time you participate in or view your favourite sports event being aired, remember you are part of the next big growth story of sports establishing itself as India’s boom industry! Sports ticks all the right boxes. It is fair, non-controversial, brings people closer, synthesises cultures and society, fosters free spirit, instils discipline and most importantly teaches people to win and accept defeat. Healthy life-style habits help in the overall individual development. Sports evokes national pride while creating great business and employment opportunities.

Internationally, sport is big business. Private enterprises support sports manufacturing, retail, tourism, sports medicine, venues & infrastructure, media & hospitality and merchandising. In developing countries like India, it has hitherto been Government led, though corporate presence is increasing especially through corporate social responsibility spends.  A thorough mapping of the overall Indian sports industry is awaited to establish its full potential and possibilities for all its constituent stakeholders.

While the lack of industry status and a sports culture in the country has been a major deterrent to the growth of this sector, international experiences have well established that sports investments have high Returns on Investment (RoI) over a long period. The rising investments in sports and related fields bear testimony.

Traditionally, private sector’s association with sports has been in the non-profit mode. The spectacular success of the Indian Premier League (IPL) has spurred sponsorships, owning leagues and franchises. After IPL success, others like ISL (Indian Super League), Indian Badminton League (IBL) and the Hockey India League (HIL), and Pro Kabaddi League have been quick to emulate the model. These have set sail a slew of brand building exercises, Bollywood investments, infrastructure investments in niche entrepreneurial ventures and emerging technologies.

Increasing disposable incomes of India’s growing middle class, media coverage of national and international sporting events and internet penetration have further fuelled the interest of spectators at the stadium gates as well as digital viewing over televisions and mobiles. The right policy support from the Government to the structuring and conduct of sports could be crucial for success.

The long-term sustainability of sports however will be greatly dependent on our sportsperson’s performances at the global level. This can only be achieved by the creation of an appropriate eco-system that will usher in the cultural change.

Sports initiatives and development work have hitherto mostly been driven by Government initiatives. It is now understood that sports can be a strategy for creating employment, generating revenue and attracting foreign capital. The Khelo India scheme’s budget of over Rs 1,700 crores is one such example. Fans are slowly gravitating towards sports as a source of unadulterated entertainment.

Sports, whether outdoor or indoor, is essentially associated with physical activity. Of late, it has received a digital dose through fantasy sports; a digital adaptation of on-field action where players are able to choose their own teams in any sport by mapping actual on-field player performances. An entirely new market has been created attracting sponsors and funds. Presently, every major league at the international level has its own fantasy league. India’s fantasy league is growing at a double-digit growth rate. It is estimated that the present 20 million fantasy sports users across 60 platforms will grow to 100 million users by 2020. 

The century old, labour-intensive, sports goods industry which gives employment to over 5 lakh people is nearly 60% export oriented. It exports to some of the strongest economies of the world and supplies to some of the best-known international brands with revenues touching nearly USD 250 million.

The changing outlook of the population towards sports and fitness is fuelling an increased interest in sports and the demand for sports-related goods and services. Today, sport is no longer another niche industry but has potential to be a profit-making industry rivalling the media and entertainment industry.

 

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