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What’s new about the business of sports in India? Nothing and everything, says 4Ps B&M’s Steven Philip Warner
Business and sports, or rather the business of sports is a global scheme beaten into shape and pronounced with impeccable style from time to time, by one business tycoon or the other. And the storyline woud read no different when it comes to the Indian sub-continent where huge money has flowed into the game of cricket, with big names in business themselves willing to take strike, moving beyond just acts of buying some $1000 worth 10-second TV spots or sponsoring players, teams and some well-flavoured series for millions of dollars. “So what’s so new in this context?” is what you’d question. Well, nothing and perchance everything!
Yes, indeed the business of sports has existed in the game of limited and test cricket, but today this enthusiasm seems to be spreading out to other games as well. And even in cricket, there’s not just one name willing to take that chance; there’re a host of bigwigs garnering enough interest in matters far beyond just buying ad spaces and sponsoring individual players! The reason behind these moves being obvious media coverage and added mileage to their brand equity as Santosh Desai, Brand Analyst justifies, “Really, it is a matter of fact that no matter how rich you are, you have an inclination towards sports. But there’s more to the whole case here; there’s of course a business edge to it all. Brand building being one, the other one is that sports is one thing which automatically gets you public attention and there is no such difference between media and sports in today’s scenario.” And how about buying off an entire team? Seems unconventional when we’re talking about India, but that’s precisely what’s radical about the manner in which capital is being piped into Indian sports. However, much as these developments create excitement, there are concerns about the sudden increased fervour as well as Harish Bijoor, Marketing Analyst discloses, “All of a sudden, every one in India Inc. seems to be excited about the business of sports. Surely, it’s a bubble waiting to burst! The valuations are so high at the moment. However, in the medium-to-long term, this bubble will surely rupture and everyone will realize their slip-ups…”
But the investors seem least bothered. And if you haven’t heard about it, after Subhash Chandra of Zee fame launched the Indian Cricket League, there’s India’s richest man, Mukesh Ambani keen on buying off the Mumbai team from the Indian Premier League (IPL, from the stable of BCCI). In the same breath, read about Anil Ambani aspiring to pocket the Delhi team. Speculations are also rife that Shah Rukh Khan of Bollywood and Russel Crowe of Hollywood are lining up to snatch up a team or two from IPL. And cricketers? Well, they can’t be far enough, can they? After Kishore Biyani of Pantaloons and Future Group fame found a willing gladiator in Sachin Tendulkar, we’ll most likely see this unusual partnership sweep away a team from the IPL too.
Names galore even with floor prices of each team touching as much as a spectacular $50 million each for a 10-year franchise! And why just cricket? Talk about Indian soccer too with Sunil Bharti Mittal announcing his $25 million investment (in association with the All India Football Federation, AIFF) to raise standards of talent for the sport in India by establishing a National Football Development Programme called the Bharti-AIFF Academy in Haryana or Goa. Talking about the initiative, Mittal remarked, “We have become too obsessed with cricket and the time has now come for us to develop football in the country. I am starting with a few hundred crore, but I assure you I am ready to invest any amount of money for whatever it takes for the academy and a few other initiatives…” Well said indeed, but then aren’t the stakes rising with every extra rupee invested? Surely, his vision to globalise Indian football and watch India play in the Soccer World Cup comes at a time when India Inc. seems focused to provide more than just a clerical vacancy to sportsmen.
Then there is Vijay Mallya of the United Breweries and Kingfisher Airlines fame who is burning tracks with his investment of $100 million in his dream Formula 1 team Force India proves that sports in India carries a meaning much beyond just cricket or even hockey! When asked about the whole development, Mallya’s knee-jerk response is, “I can’t comment on why other industrialist are associating themselves with sports, but in my case, it’s the sheer passion in me for Formula 1 sport that has brought me to this point. I have big plans lined up for F1 in India…” And what do the experts say? Binit Somaia, Regional Director, Centre for Asia Pacific Aviation asserts, “Many corporate houses have business interests in multiple sectors. Provided that there is a strong executive team in place to manage the various divisions, there is no reason why Mallya should not expand his horizons. Formula 1 ties in well with the lifestyle businesses and it has the potential to provide excellent global exposure to his brands.” Even Santosh Desai confirms the same as, “The F1 purchase goes with Mallya’s targets and his persona. Nobody wants to invest in a sport like hockey and there are very strong reasons for the same!”
Talking of automobiles, there’s Apollo Tyres with its investment of Rs.100 crore in developing Indian tennis. So while there is so much at stake considering the crores being invested, a question arises: Won’t this prove detrimental to the businessmen who seem to be devoting more than their share of the clock to issues beyond their business arenas? Precious time wasted – yes that’s the very concern we’re pointing to here. However, Harish Bijoor discards this concern as he remarks, “Like Mallya is investing in F1 and Mittal in football, I am more interested and concerned about the money than their time that they would have to spend on it. However, when reality dawns, they would realise their mistakes and whether they are paying too much for it.”
True enough, there is no doubt that the various capital infusion moves will give increased mileage to the respective commercial however, the risks are no less apparent. And worse, it might just be too late before the participants realise this… Surely, much play and no work will make the Jacks of India Inc. dull boys, very dull!
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Source : IIPM Editorial, 2008
An Initiative of IIPM, Malay Chaudhuri and Arindam chaudhuri (Renowned Management Guru and Economist).
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