GROUPM ESP REPORT: THE MAKING OF A SPORTS LEGACY
GroupM ESP released the eleventh edition of its annual report on Indian sports this week, highlighting the growth of sports in the country for the year 2023. The report titled, ‘Sporting Nation – Building a Legacy,’ concentrates on three aspects of sports, namely, Sponsorships (inclusive of ground, team, and franchise fees), Athlete Endorsements, and Media Spends. The report suggests that the cumulative contribution of these three factors delivered a revenue of over INR 15000cr in the year 2023, establishing a double-digit growth over 2022. After a year of IPL frenzy, with the addition of the novel WPL, cricket in India continues to be a topper in all aspects. But the report also points out that ‘emerging sports’ (sports other than cricket) have massive potential in the country. Having said that, emerging sports saw a year-over-year decline of 13 percent, delivering revenue of INR 420cr. To this, the report points to the fact that unlike 2022 that saw the FIFA World Cup, the year 2023 did not have a major footballing tournament, and this had a negative impact. Sponsorships Bearing this in mind, the report presents data for Sponsorship spends, which is inclusive of ground, team, and franchise fee, endorsements by Indian athletes, and media expenses by brands. Together, they have recorded a total revenue of INR 15766cr. in 2023, which is 11 percent incremental value over the previous year. Sports Media Spends In terms of advertising expenses, Digital platforms grew by 40 percent over the previous year with INR 2870cr in total spends in 2023. To put it in perspective, the report says that in one single year, Digital ad spends grew by INR 825cr. OTT has a lot to do with Digital media’s growing popularity, and the report mentions that the medium offers a certain convenience that is not possible in a traditional TV setup. The report further predicts that consumers will overcome any inertia towards the acceptance of new tech with time, further bolstering Digital’s status. Moreover, Television-based viewing of OTT, as per the report, is also enabling collective viewing in households today. 2023 did not have the FIFA World Cup, but it did have something even better – the ODI Cricket World Cup during the festive months of October and November. This meant that brands should have gone all out on advertising, and that is what happened, but at the cost of non-cricketing sports. According to the report, significant ad budgets were diverted from non-cricketing sports, entertainment programmes, and other such genres towards cricket. This further explains the degrowth of non-cricketing sports. The report envisages 2024 to be an action-packed year with the T20 World Cup, the Olympics, and other sporting competitions lined up throughout the year. Athlete Endorsements Kholi, Dhoni, and Sharma together signed up to endorse over 30 brands last year, which gave rise to their respective endorsement values. The report names the next generation of stars Shubhman Gill, Hardik Pandya, Jasprit Bumrah and KL Rahul among the cricketers who had major gains in 2023 – in terms of the number of brands endorsed as well as revenue. Indian cricket always had a strong pipeline of emerging stars, and Neeraj Chopra had a great year in 2023 with his famous victory at the World Athletics Championships held in Budapest, in addition to his wins at multiple prestigious competitions. Today, he has 16 brands in his portfolio as he continues winning across around the world. Women’s cricket has been on the rise. Among the female cricketers, the highest earners were Harmanpreet Kaur, Smriti Mandhana, and Jemimah Rodrigues. On the other hand, emerging sports endorsements recorded a total of INR 117cr. in 2023, with a 13 percent contribution to the total revenue. A 7 percent annual growth was recorded, which is significantly lower than what cricket boasts. ‘There is a deliberate effort to construct a legacy’ Vinit Karnik, Head - Sports, Esports and Entertainment GroupM South Asia speaks to IMPACT about the significance of the findings of the latest report, Sporting Nation – Building a Legacy, the contribution of the WPL to the total revenue, and more. Q] The report this year is titled, ‘Sporting Nation – Building a Legacy,’ as opposed to last year’s ‘Sporting Nation in the Making’. Has India begun to ‘build a legacy’ in sports? Is this purely based on Cricket’s resounding success? • 2023 was the year of the Asian Games that was held in Hangzhou, China. As the games were held successfully, playing their roles to perfection, were the Indian Olympic Association (IOA) sponsors • The inclination among Indian businesses to seek value in collaborations with foreign teams can be seen in football too. The investment made by Apollo Tyres with Manchester United, a team with immense popularity in our country, and the deal between Tata Gluco Plus and the Argentine Football Association, both serve as illustrative examples in this regard. • Pro Kabaddi (PKL), Indian Super League (ISL), Ultimate Table Tennis (UTT), Prime Volleyball League (PVL) and Ultimate Kho Kho (UKK), a franchise-based competition, held successfully in 2023 • Marathons have been showing an uptrend in recent years with the culture of running, gaining many miles • Another sport that picked momentum after the Covid-related handicaps was Golf • 2023 was a great year for motorsports in the country, as the Moto GP Bharat was held successfully for the first time. Formula E also marked its debut
Sports has established itself as Noah’s Ark which ferries brands safely over troubled waters, establishing routes to build brands in the product categories in the country. With significant expansion, commercialization, and gain in influence, India has become a major player on the international stage. As the viewing habits of consumers change, media conglomerates in India are being integrated across TV and Digital services. At the same time, sponsorship spends on international cricket fixtures, the IPL, and other sports is starting to have massive cultural significance. Sporting events are reaching more people, and there is a far greater understanding of sports today. The report says that this increased reach is influencing media giants to vie over one another for exclusive rights. Mega sponsorships and endorsement deals are being made on such sporting stages that are presenting attractive advertising opportunities for brands.
Highlighting the competitiveness for rights, the report says that Viacom, with their OTT platform Jio Cinema, has made major inroads into the IPL by picking up digital rights for Indian subcontinent, and more, for 2023-2027 at a bid value of INR 23758cr.; the Disney-backed Star Network kept the TV rights for the sub-continent, paying INR 23575cr. for the same period. Viacom 18 bagged the media rights for both digital and TV for Indian cricket globally for INR 5963cr. for the period from 2023 to 2028. These rights extend to all the cricketing action run by the Board of Control for Cricket in India (BCCI), international as well as domestic, other than the IPL. Viacom further continued to gain share in cricket by winning the rights for the Women’s Premier League (WPL) too – they secured the deal for 2023-2027 with a bid of INR 951cr., which works out to a per match value of INR 7.09 Cr ($Mn. 0.85).
All in all, 2023 saw a healthy 24 percent growth in sponsorship spends against 2022. Franchise fee stood out as the biggest contributor after adding about INR 100cr to its total in only one year. Yet another good news from the year 2023, in terms of sponsorships, is that foreign properties with good viewership in India, like cricket teams in an ICC event, and the prestigious English Premier League (EPL) clubs, are attracting sponsorship opportunities from brands in the country.
2023 was also the year of the Women Premier League. The five franchises that took part in the tournament, fetched BCCI a total revenue of INR 4669cr as franchise fee.
Media spends for 2023 amounted to INR 7494cr, which, according to the report, is the biggest contribution to sports commercialisation in India. In this, the biggest contributor to ad spends has been television, putting up a brave fight against the new darling of media, the OTT. However, TV advertising did drop by a value of INR 886cr in 2023, bringing the total ad spends to 62 percent from the more generous 73 percent in 2022.
As consumers, today we are used to seeing athletes on our screens and billboards endorsing products. In 2023, Athlete endorsements saw an uptick, with cricketers’ income from brands shooting up by 27 percent over 2022. Cricket stood tall here as well, as 87 percent share of all athlete endorsements came through cricket-related deals. Sports celebrities (cricket and emerging sports combined) fetched an amount of INR 927cr. in 2023. The report highlights that a total of 536 brand endorsement deals involving sports celebrities were reported last year, and nearly 380 of them were linked to cricket players. Cricket superstars such as Virat Kohli, MS Dhoni, and Rohit Sharma are the leading sportspersons to have bagged lucrative contracts. Apart from them, Neeraj Chopra, PV Sindhu, among others are inspiring athletes to outperform in international sporting competitions.
GroupM ESP’s India Sports Sponsorship Report’s title shifted to ‘Sporting Nation - Building a Legacy from ‘Sporting Nation in the Making’, to reflect the elevated status India now has as a sporting nation. The Indian sports industry has seen a soaring growth from INR 2400cr. in 2008 to over INR 15000cr. in 16 years with an impressive CAGR of 13.3%. It is one of the fastest-growing industries in India.
This growth underscores the significant expansion, commercialization, and influence that the Indian sports industry has achieved over the years, establishing itself as a major player on the national and international stage.
India has successfully hosted Global Sports events Formula 1 (2011, 2012 & 2013), two ODI Cricket World Cups (2011 & 2023), one T20 Cricket World Cup in 2016, U17 FIFA World Cup in 2017, and last year’s Moto GP Bharat.
There’s a strong and stable franchise-led leagues ecosystem. India has seen a rise in various emerging sports leagues, diversifying beyond traditional cricket. Leagues like Pro Kabaddi (PKL) and Indian Super League (ISL) have gained sufficient popularity. Other Leagues like Ultimate Table Tennis (UTT), Ultimate Kho Kho (UKK), Prime Volleyball League (PVL) & Premier Handball League (PHL) have not only provided a platform for athletes but have also contributed to the growth and popularity of their respective sports in India. Participative sports have gained prominence, transcended traditional boundaries, and fostered community engagement. From golf and cricket to marathons, these sports have become integral to India’s vibrant sports culture, with an organized market exceeding INR 1000cr.
Indian athletes won the highest-ever tally of seven medals in Tokyo in 2021 and 100+ medals in the Asian Games, 2023. India’s strong interest in bidding for the hosting rights for the 2036 Summer Olympics, and The All-India Football Federation (AIFF) is mulling a plan to host a few matches of the 2034 FIFA World Cup.
There is a deliberate effort to construct a legacy, potentially through notable achievements, cultural influence, and developmental initiatives in the realm of sports. This intentional approach signifies a commitment to not only enhance the industry’s economic value but also to contribute significantly to the broader societal and cultural fabric through its influence on sports development and engagement.
Q] How much of an impact did WPL have on the total revenue of Indian sports in 2023? Which are the other sports, apart from IPL, that have contributed to the total revenue, in the pecking order?
WPL franchises were sold at a record sum of INR 4669.99 Crores for five teams, which is 2.5x of the IPL Franchise fee in 2008. The highest bid came from Adani Group, an amount of INR 1289 Cr for Ahmedabad, followed by Reliance’s Mumbai Indians who secured the rights at an amount of INR 912.99 Cr.
Viacom secured the media rights for the Women’s Premier League (WPL) for 2023-2027 with a bid of INR 951 Crores, which works out to a per-match value of INR 7.09 Cr. The Tata Group won the Title Sponsorship rights for the event for five years. The other sponsors who contributed to the impressive debut season included Dream 11, Amul and CEAT. With all the 5 WPL teams selling out their sponsorship inventories, it was quite a satisfying year for the competition.
Q] 2023’s sponsorship revenue saw an uptick with overall revenue of INR 7345cr, which was 24 percent higher than the previous year’s. If you had to pick the top three factors for this, what would they be?
Cricket played a pivotal role in driving sponsorship growth, contributing to 79% with a growth of 32%.
A key enabler for this was the favourable schedule of our men’s cricket team – they had played 64 international matches across tests, ODIs and T20Is in a busy year. This included the ODI World Cup that we hosted, the Asia Cup which saw us lifting the trophy, and the ICC World Test Championships finals.
IPL 2023 contributed upwards of INR 3000cr. in 2023 to sponsorship spends (including central, team and franchise), with the two new outfits Gujarat Titans (GT) and Lucknow Super Giants (LSG) playing their part in scaling up the competition to the current ten-team format with an increased number of league games. The introduction of the Women’s Premier League (WPL) in 2023 brought in additional revenue in all three components of Ground Sponsorship, Team Sponsorship and Franchise Fee
The total sponsorship spends in non-cricketing sports amounted to INR 1528 Cr, which accounts for 21% of the total value. Following are some growth drivers in 2023:
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