Investment Outlook , Published Feb 18, 2020
Outline
From the hinterland to the city centres, accessibility of live content in sports has enabled wider understanding of the genre and brought the games, leagues and athletes into the spotlight. In contrast to the pre-digital era, this trend has introduced newer business opportunities in India, creating revenue streams that were until now available only in the developed world.
A country that houses one of the world’s richest sporting bodies also has the dubious distinction of having the lowest number of Olympic medals per capita in the last edition. Still punching well below its weight, there’s ample room for a change in the narrative.
The power play
More than a decade back, a shorter format of the most popular sport in India made its debut. It was accompanied by rising fandom, increased sponsorship, media spends and unheard-of TV viewership numbers. Add availability of basic smartphones with cheap mobile data, rising spending power of the middle-class and the advent of online streaming platforms, the stage is now set for unprecedented growth in what has hitherto been a fledgling industry.
Traditionally, the sports industry in India largely revolved around manufacture of sporting goods, which is still dominated by just two towns – Jalandhar and Meerut. As India progresses towards being a US $5 trillion economy, the shift from manufacturing towards services will usher in similar opportunities in the sports industry. We are already witnessing the spawning of several cash-rich sports leagues, fantasy gaming platforms, merchandising and a renewed interest in home-grown sports.
The strategic time-out
The Government’s Khelo India scheme is another shot-in-the-arm to revive the sports culture at the grassroots level by building a strong framework for all sports played in the country. The embedded financial assistance to young athletes is expected to generate huge demand for sports equipment and facilities, ultimately benefiting the industry and the economy. The contribution of sports and related activities to India’s GDP is a tenth of one percent which is a far cry from those seen in western countries. With more than a quarter of the population in the prime athletic age group of mid-teens up to 30 years, the target consumer base for sports and fitness products is poised to grow rapidly. On the other hand, the field is clear for ancillary association with sports via viewership, gaming, merchandising with the potential of over a billion consumers.
The success of international sports leagues shows the potential of the Public Private Partnership model in building a stronger sports industry. Olympic Gold Quest, a not-for-profit organization comprising former Indian athletes provides not only training and equipment to athletes, but also focuses on improving the physical and mental being. The roadmap of NITI Aayog in its action plan to achieve 50 Olympic medals is yet another example of the Government machinery in action through measures such as infrastructure development, hosting international events and explicitly seeking schools to earmark expenditure on sports activities.
Today, we are witnessing the diversification of the sports industry in India, as the sector has seen the spawning of several cash-rich sports leagues, many of whom have drawn inspiration from IPL’s continuous success since 2008.
A gentleman’s game
A country’s socio-economic development, the harbinger of equality and opportunity, goes beyond statistics around education, health services, modernization, nutrition etc. Isn’t sports a great leveler? If the ‘Prince of Calcutta’ captained the India cricket team in amongst its most successful periods, a village girl from Manipur with her humble background became the only woman to be World Amateur Boxing Champion for a record six times. Both represented India, successfully, and are household names today.
Internationally, there have been instances where sports have united a whole country against serious social issues. Springboks, the predominantly ‘white’ rugby team of South Africa faced a peculiar situation where the home crowd supported and cheered for the opposition team. However, Nelson Mandela, the President and Pienaar, the captain, resolved to unite the country which was torn by violence between the two dominant races. Things started to change as the players interacted with the fans forging friendship with them. Support for the Springboks began to grow among the black population, and within weeks, the whole country came together to support them. Almost poetically, the team went on to win the World Cup.
Going forward
The advent and success of international sports leagues show the potential of the Public Private Partnership (PPP) model as a strategy for improving India’s opportunities to build a stronger sports industry. An exemplar of the PPP model is the Olympic Gold Quest (OGQ) — a non-profit organisation comprising of popular former Indian athletes. OGQ provides training and equipment, and focuses on improving physical and mental strength through, diet, fitness and practice, while also offering guidance through physiologists.
NITI Aayog, through its roadmap ‘Let’s Play – An Action Plan to achieve 50 Olympic Medals’, has suggested taking several measures such as developing sports infrastructure through the private or PPP route, hosting international events, and for schools to earmark expenditure towards maintaining and enhancing sporting infrastructure and equipment.
Sports is a win-win for all, and this is one reason that the Khelo India programme has been introduced by the government.
If India focuses on developing sporting dominance, popularity and fans are a given, but what automatically follows are huge business opportunities and economic value. India’s large population base, coupled with a growing sports consciousness, fan base, government thrust and private investment are factors that hold the potential to catalyse growth in the sports economy and thus, feed into India’s vision of becoming a US $5 trillion economy.
About Kapil Dev
Kapil Dev is a renowned former Indian cricketer. He is regarded as one of the greatest captains in the history of cricket. He is the only cricketer to have scored over 5,000 runs and taken more than 400 wickets in Test (international match) cricket. Under his captainship, India won the 1983 World Cup, beating the odds against the mighty West Indies in the final, and he retired in 1994.
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