Hello and welcome to the eighth episode of Sports Business Updates – my weekly podcast featuring the biggest news from the sports industry in India and the rest of the world.
In this week’s episode, I will talk about the ‘Sporting Nation in the making 2021’ report from GroupM-ESP. This is the most anticipated and comprehensive report that GroupM-ESP release annually that covers the Indian Sports Industry. It provides a great insight into how the Indian sports industry performs year-on-year. We also discuss the Pro Kabaddi League’s media rights auction from the franchise owners perspective.
So, let’s get into the details….
The Indian Sports Industry valued at INR 5894 crores in 2020 according to GroupM -ESP ‘Sporting Nation in the Making 2021’, the Indian sports industry report
Our First update is about Group M- ESP’s annual ‘Sporting Nation in the Making 2021’, the Indian sports industry report.
The most awaited report about the Indian Sports Industry is finally out and it is a very interesting report with some brilliant insights about the 2020 Indian sports industry.
I will be publishing a detailed infographic about the key learnings about the Indian sports industry from the report on my website, so, I won’t do a deep analysis of the report in today’s update and focus on the key synopsis of the report instead.
According to the report the Indian Sports Industry was valued at INR 5894 crores. However, the Industry declined 34% compared to 2019. This was purely down to COVID-19 restrictions and only 2 sports events took place. The IPL was played in UAE and ISL in Goa.
The report breaks down the sports market into 3 main components :
Media Spends was the biggest contributor to the Indian Sports Industry with INR 3,657 crore.
Sponsorships consisting of On-ground sponsorship – INR 850crores, Team sponsorships – INR 646 crores and Franchise Fees – INR 177 crores amounting to a total of INR 1673 crores – Contribution of sponsorships to Indian sports Industry in 2020. Cricket contributed 64% of the sponsorships.
Endorsements – Contributed INR564 crore. In a year where every other component of the sports sponsorship industry witnessed a decline, sports celebrity endorsements saw an upward swing of 5% from 2020. There were 377 – brand endorsements deals were made in 2020 out of which 275 – involved cricketers and 102 – Rest of sports contributing INR 517 crore.
Overall my opinion is that the sector has done well and it will only get stronger when things get back to normal with Pro Kabaddi League, Ultimate Table Tennis and other leagues planning a comeback in 2021.
Moving onto our second and final update this week.
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PKL franchise owners criticise the media rights auction and claim it had major flaws
is about Pro Kabaddi League and the displeasure expressed by franchise owners about the media rights auction.
Last week, I covered the story about Star India winning the tender for PKL’s media rights auction.
It has since emerged that Mashal Sports have countered claims that its auction for broadcast rights to the Pro Kabaddi League was flawed.
Team owners were reportedly displeased with the specifications of the invitation to tender and the auction result, arguing that there was no price discovery as the competition was absent from the bidding process. One of the team owners also went on to say that the digital bid was designed in such a way that no one could enter the bid for digital rights.
Mashal Sports has termed the charges “baseless and contrived”.
In February, details about the bid were out in the public domain. The opening bid was set at a base price of Rs900 crore ($120m/€99.8m) for the rights from 2021 to 2025. It is believed that Star won the rights with a single bid of Rs905 crore, according to India’s Economic Times.
There were also talks doing the rounds that there were bidders other than Star India, however, Mashal Sports has stressed that there were six bidders in total – who had purchased the invitation to tender.
Two of the franchise owners have voiced their displeasure about the process public. Ronnie Screwvala, co-owner of the Mumbai-based U Mumba team, has alleged that Mashal Sports failed to disclose complaint letters it received from potential bidders that claimed the tender process was biased while, Patna Pirates owner Rajesh Shah has said that he acknowledges Star’s role in popularising the sport over the past seven years, but he believed “the real value of the media rights could have been much higher”.
Responding to criticism of the fee, however, Mashal Sports stated that there had been regular consultations with all stakeholders, including team franchises. This situation will probably create a serious rift between the franchise owners and the organisers and solving the conflict of interest will need to be addressed to ensure the smooth operation of the upcoming league season in July.
This brings us to the end of the eight episode of Sports Business Updates. Do stay tuned on my website (www.sportsnexus.co) for the infographic on the Indian Sports Industry. Thank you for listening to the podcast and to all my listeners in India please stay safe and wear a mask.
This is Nilesh and you have been listening to Sports Business Updates podcast – a Sportsnexus production. Have a good week ahead.
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