Rs. 14000cr Strong Game
GroupM ESP (the Entertainment, Esports & Sports division of GroupM), launched the tenth edition of ‘Sporting Nation in the Making’ this week, providing a comprehensive view of the Indian Sports Industry, with an eye on the scale, direction, and crucial growth drivers. Be it IPL, a property that has been the money-spinner for years or cricket as a whole which has an all-pervading following in the country, the sport contributed to a mammoth 85% of the total Sports Industry revenue, which equates to INR 12115cr ($Mn 1534)! As far as football is concerned, India hasn’t seen participation as a team in the high octane matches of the FIFA World Cup and yet WC was like the icing on the cake for the Indian fans of the world’s favourite team sport. Also, after a long hiatus due to the pandemic, emerging sports saw a staggering growth of 123% as Kabaddi, Marathons, and Golf resumed. ‘Cricket contributed to 85% of the total Sports industry revenue’ Vinit Karnik, Head – Entertainment, Esports & Sports, GroupM South Asia speaks to Neeta Nair about the tenth edition of ‘Sporting Nation in the Making’ and why 2022 was a spectacular year for the Indian sports industry which crossed the INR 14,000cr mark Q] What is the biggest takeaway from the GroupM ESP India Sports Sponsorship Report, 2023? Q] For the first time, total sports industry spending exceeded INR 14,000cr what are the factors that led to that? Q] How has cricket fared as compared to the other sports in the country? Q] Most of 2022, especially post the first two months was Covid free, how did that impact on ground sponsorships of various sports? Q] Which are the emerging sporting properties which have shown promise last year and expected to make it big this year too? Q] Apart from IPL today, which are the other leagues and sporting properties that really contributed to the growth of sports?
The report explores the twists and turns of the Sports Sponsorship Industry in India in 2022, and quantifies it from three angles – Sponsorship (inclusive of On Ground Sponsorship Spends, Team Sponsorship Spends and Franchise Fee), Sports Celebrity Spends, and Sports Media Spends. All these streams put together, India saw a total revenue of INR 14209cr ($Mn 1799), which in terms of year-on-year incremental delivery, reflects a growth rate of 49% over 2021. For an industry that has been habituated to emphatic annual growths for over a decade, the slowdown caused by the pandemic in 2020 was a major jolt, even as 2021 saw us getting back on the growth track. Hence, this disproportionate delta we saw in 2022 was well and truly indicative of a resumption of normal services in an industry that has been seeing a rising graph over the years.
Sports Sponsorship saw the biggest upswing among the three factors under consideration here, leapfrogging to INR 5907cr ($Mn 748) with a growth of 105%. This doubling impact is the result of a combination of factors like favourable schedules, scaling up of properties, synergistic functioning of the industry players within the ecosystem, and of course, the market acceptance of the treat that was laid out for the fans.
2022 also saw Sports Celebrities getting associated with more brands, with the Athlete Endorsement value recording an amount of INR 749cr ($Mn 95), which was 20% higher than what the stars earned from brands in the previous year. This rising curve is certainly indicative of the influence sportspersons wield over us, owing to the fact that while they win against competition on the field, they also win the hearts of the fans.
A little over half the total industry spends, 53% to be precise, were incurred on account of Advertising Expenses on Media. In terms of absolute value, this works out to a total amount of INR 7553cr ($Mn 957) at a YoY growth of 26%. TV stands on a pedestal, with a contribution of 73%, including Cricket and all Emerging Sports, imputing an aggregate amount of INR 5506 Cr ($Mn 697), at a growth of 9% over 2021. While TV stands tall, digital medium is catching up fast in sports as well as other facets of life. Recent years have seen rapid adoption of OTT medium in Indian households, to such a point that we are at the cusp of a digital mainstreaming. While the traditional advertisers, like the blue-chip FMCG brands continued to make their presence felt, there was a clear juggernaut from new-age sectors like FinTech, EdTech and Gaming, which were to a huge extent instrumental in driving the values for the year 2022.
The report says that while the digital revolution will certainly play a bigger role in the future, traditional TV is performing a monumental role today, and will need to keep doing so in sports broadcasting. With the ever-evolving technological landscape in the backdrop, digital medium has been growing at an express pace now, and in 2022, we saw a gargantuan YoY growth of 112%, by accumulating an ad revenue of INR 2045cr ($Mn 259)! It contributed to 27% of all media spends in 2022; the corresponding number just one year back was just 16%! While the confluence of cricket and TV is the sweet spot for marketing behemoths, we can also observe a greater propensity in advertisers to experiment with involvement in online streaming of Emerging Sports where they can operate with lower ticket sizes. In view of the evolving consumer preferences, and the onrush of tech-driven shifts, we can expect OTT to drive a digital groundswell in sports media advertising sooner than later.
The industry touched the INR 100 billion mark for the first time, but the way in which it was achieved was impactful and with the emergence of WPL, the INR 200 billion is just round the corner.
Indian Sports Industry smashes records, surpasses INR 14,000cr mark for the first time, which in terms of year-on-year incremental delivery, reflects a growth rate of 49% over 2021. It was a matter of great pride for the ecosystem when the industry crossed the INR 10,000cr mark for the first time, after a decade since the launch of the IPL, and even though there was turbulence during the pandemic years, 2022 has given a clear message that INR 20,000cr is just around the corner. That INR 10000cr peak would be scaled in 2022 was never in doubt, but the way in which it was achieved was impactful, and the positivity was ubiquitous.
The overall increase in spends was due to the rise in the number of IPL matches (60 to 74), the addition of two new IPL teams (increase in Team Sponsorship spends & Franchise Fee), the ICC T20 World Cup, Asia Cup, FIFA World Cup, and the return of emerging sports events and tournaments like PKL, marquee marathons, Maharashtra Open, and Commonwealth Games 2022. The Indian Men’s Cricket Team played 67 matches across all three formats of the game as against 36 in the previous year, which itself signifies a huge rise in the overall monetization potential for their fixtures.
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 12115cr. 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!
Although the Covid pandemic had created obstacles for various domestic short format leagues in India, 2022 proved to be a successful year for these competitions, leaving the uncertainties of the past behind. The Covid pandemic created significant obstacles for the sports industry, which was previously on the fast lane. However, the pandemic also presented opportunities for innovation in the area of fan engagement. The sector faced tough circumstances, but consumer behavioural patterns saw significant shifts, with trends accelerating out of necessity, particularly in the realm of digital adoption. Consequently, there have been clear changes in the approach taken by brands regarding spending on sports properties.
The 49% value growth witnessed in 2022 implies a three-year Compound Annual Growth Rate (CAGR) of 14%. Despite the setbacks faced in 2020, the post-pandemic performance of the sports industry, in quantitative terms, has been more rewarding than the years leading up to the force majeure event that threatened to disrupt much more than just the sports world.
Emerging Sports, a term we are using to collectively refer to sports other than cricket because of the high growth potential they represent, had an impressive year and contributed to 15% of the overall Industry scoreboard. While the pandemic wreaked havoc for these sports, 2022 saw them bouncing back strongly, with an 87% growth over 2021, at an overall level. The higher share in the area of Sponsorship (25%), as against Media Spends (6%) and Endorsements (15%), could be viewed, among other factors, as indicative of a proclivity from certain brands to get into symbiotic relationships with growing properties, even if they are smaller in scale at that point in time. Digital media had a higher share of ad spends for emerging sports (10%) compared to TV (5%). Participative sports like marathons and golf saw encouraging post-pandemic resurgence. The emergence of new franchise leagues and events like the Ultimate Kho Kho also showed promise for the future. Overall, 2022 was a year that highlighted the potential of emerging sports as they played a supporting role to perfection.
In 2022, India witnessed the successful return of several franchise leagues, which began with Kabaddi. The Pro Kabaddi League (PKL) made a comeback with two consecutive seasons, doubling the joy for the fans. The first season of the 2021-22 campaign took place followed by the 2022 edition. The top Football event in our nation, the Indian Super League (ISL), is now an important part of our sports calendar, and along with the IPL, has been seeing uninterrupted action ever since its inception, even in the pandemic-afflicted 2020. The pandemic caused some setbacks for participative sports like marathons, but 2022 witnessed the successful return of long runs. The Delhi Half Marathon, Mumbai Marathon, Bangalore 10k, and Kolkata 25k were all successful events in India, which uplifted the spirits of everyone involved.
With the return of these franchise leagues & sports events, the sports industry in India continued to thrive, bringing in more opportunities for athletes and creating a positive impact on the country’s economy. The successful return of these sports events in 2022 was a testament to the resilience and determination of the organizers, players, and fans who worked tirelessly to ensure the safe and successful execution of these events.
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