President & Group Managing Director: Dr.Shelly Ahmed | Editor in Chief & Group CEO: M H Ahssan

Thursday, March 19, 2015

How Private Enterprise Is Changing Non-Cricket Sports?

India Inc has entered the country's sporting arena, and is changing the way the nation plays.

There was a time, not too long ago, when it was taken for granted that an aspiring sportsperson in India would have to do any or all of the following: 
  • Secure a job in a public sector company, or a large private sector one, for a regular income.
  • Scramble for corporate sponsorship to be able to compete at international or even national tournaments.
  • Depend on government-run training facilities and sporting federations to be selected for tournaments and get adequate training.
  • Not consider the sport a viable full-time career option.
  • But, over the past few years, the Indian sporting arena is beginning to look different: Sports other than cricket are drawing spectators, television audiences; more sportspeople are treating their discipline as a substantial, if not primary, source of income and moulding full-time careers out of them; and the dependence on government-run organisations for training is on the wane.    

Assuming a substantial role in this change is a new player in the arena: India Inc. 

Billion-dollar TV rights, millions of viewers across the globe, and consequent ad revenues, ticket and merchandise sales are bringing in money like never before. The television spectacle that started with cricket’s Indian Premier League (IPL) has, by now, spilled over into other fields with the Indian Super League (ISL, 429 million viewers), Indian Badminton League (IBL, 21 million viewers), and Pro Kabaddi League (PKL, 435 million viewers). 

ISL has emerged as the fourth biggest football league in the world by average stadium attendance (24,357 per game), ahead of the French, Italian and Brazilian leagues. Its success presents a stark contrast to the older avatar of football in the country: The I-League, which averaged 5,618 spectators per match for the 2013-14 season. 

Although this new-found interest of corporate India and private enterprise in the development of sports in the country has various motivations—some are involved through their corporate social responsibility (CSR) activities, others are in it simply for the potential big bucks—the biggest gainers are perhaps sportspeople and fans. 

That MS Dhoni is one of the highest revenue-earners in Indian sport is well known: He rakes in more than Rs 100 crore a year from brand endorsements, an IPL deal and a contract with the Board of Cricket Control in India (BCCI). Lesser-known is the fact that he was recently promoted by Air India from deputy manager to manager of their Ranchi office. For Dhoni, his career at Air India may be nothing more than a vestige of his days as a beginner, but similar jobs continue to hold more value for other sportspersons. 

Take, for instance, Rakesh Kumar, captain of India’s international kabaddi team. Kumar, a Haryana lad with humble beginnings, is employed as senior ticket collector with the Indian Railways, with a monthly salary of Rs 50,000. He’s been part of national teams that have won Gold at two World Cups, three Asian Games and two South Asian Games. For his achievements, he was rewarded by the Delhi government: Rs 15 lakh for the 2010 Asian Games Gold, and Rs 20 lakh for the 2014 Asian Games Gold.

But it was with PKL that Kumar’s financial fortunes turned around significantly: He was paid Rs 12.8 lakh by the Patna Pirates to play for just over a month (he got the highest bid for the season); he will also be earning about Rs 30 lakh from his participation in TV reality show Khatron Ke Khiladi.      

Although fortune has not shone as brightly, yet, for other PKL players, things are definitely looking up. “Even now, most PKL players are dependent on permanent jobs. But it gives sportsmen immense pride to be earning something from their sport,” says Charu Sharma, director of Mashal Sports, the organiser of the kabaddi league. 

“The whole concept of pro sport is to compensate to the level of individual achievement. When a pro league starts, that’s when true quality is recognised. That pushes up standards: You want to play better because you know it will earn you more and more.” 

Kabaddi has always been a huge sport in India, but was largely ignored by the media. “Mumbai has 500 kabaddi clubs; it’s the biggest sport of the city,” says Sharma. “There was always support. We just presented the new, slick, sophisticated face of the game. Once the Star TV juggernaut moved in, it ramped up the league.” 

Star India plans to invest Rs 20,000 crore for sports broadcast rights in the next few years. Analysts say it’s a paying market with ad spends on sports packages pegged at Rs 4,000 crore annually. Star has successfully utilised its network of sporting and non-sporting channels to promote PKL and ISL, aided in no small measure by the presence of celebrity team-owners who drum up interest, viewership and stadium turn-outs.   

IBL and ISL have done something similar for its own franchise players. 

In the past, badminton players would only make money if they won tournaments. But IBL has given them a substantial and steady source of income. For instance, when Srikanth Kidambi—currently ranked No. 4 in the world—won the 2013 Thailand Open, he won $9,000. But in the 2013 IBL auction, he was bought for $34,000 by the Lucknow Warriors.

In football, Chandigarh’s Sandesh Jhingan had played with two I-League clubs before being signed on by Kerala Blasters for ISL and earning Rs 25 lakh for its 2014 season. He was a break-out performer and was awarded ISL Emerging Player of the League. “His price will probably be Rs 80 lakh next year, the maximum auction price,” says Anuj Kichlu, CEO of The Football Edge, the agency that manages Jhingan.

The Rs 700-crore deal between the All India Football Federation (the government-run body that manages association football in India, along with running the national team and the I-League), Reliance Industries (which owns Network 18, the publisher of Forbes India) and US-based International Management Group (IMG, a global sports management and media company) ensured that IMG-Reliance got exclusive commercial rights to all forms of broadcasting, revenues and promotions for ISL. All eight ISL franchises have been mandated to invest Rs 2 crore a year for the development of football at the grassroots level.  

Last August, the ISL started its Grassroots Development Programme with a three-day workshop in Kolkata to get more children involved in the game. The programme also aims to scout and train fresh talent. The Kolkata workshop was followed by similar events in Goa, Nagpur and Chennai.

Unrelated to the ISL, but working towards training footballers, is the Pune-based DSK Group. In 2013, the group tied up with English Premier League giant Liverpool FC to set up a residential football academy—the LFC International Football Academy—in Pune. DSK has invested Rs 50 crore in this venture.  

Getting into the business of training is also Ronnie Screwvala, media mogul-turned-investor. His Unilazer Ventures is funding U-Dream (at a cost of Rs 250 crore over six years), a nation-wide talent hunt and development programme that will select 90 children a year for six years from 100 Indian cities to train in European football academies. Unilazer has tied up with German club TSG 1889 Hoffenheim for the first batch of students from India; two more European clubs are lined up as part of the programme. 

One third of the children selected for the U-Dream programme will go to Germany on full scholarships, along with Indian coaches who, for the first time, will receive full Fifa professional coaching licences. “The game won’t grow to any significant level unless we have the core talent,” says Screwvala. “In football, we can’t evangalise a successful tournament [like ISL] in terms of local talent, if the Indian national team is still ranked 150th in the world.”

But Unilazer is not in it for charity: It aims to make money by managing the future careers of the players they are now sponsoring. And this can prove lucrative, as is seen from global examples (see box on the next page). “100 percent of them will be playing in some form or the other. Of the first 90 kids, if even 20 don’t land anywhere, no parent will send their kids after that. And I will be damaging the whole ecosystem,” says Screwvala.

Everyone’s not in it for the money. GoSports Foundation is a non-profit, donor-funded organisation that nurtures Indian athletes such as Srikanth Kidambi. “We don’t have enough sports-specific nutritionists. We were trying to get good mental conditioning experts from the corporate world. As more money comes in, more qualified pros will take up sports,” says Saisudha Sugavanam, programme director at GoSports. “We aspire to build an ecosystem that takes care of grooming a future Srikanth.” 

This ecosystem is essential to the development of Indian sports and ranges from agents and managers to coaches and nutritionists. “If you look at sports science, we’re still lagging behind. Why is the ratio of strength conditioning experts to athletes so low?” asks Sugavanam. During a recent visit to the Gopichand Badminton Academy in Hyderabad, she heard 10-year-olds talking about “short-terms goals and long-term career plans”. She says, “Educated people don’t see sport as an alternate career option; but it is a viable career.” 

Philanthropic funds are also coming in to nurture the bigger picture of Indian sports. The Olympic Gold Quest (OGQ) founded by sporting legends Geet Sethi and Prakash Padukone raises funds with the aim to increase India’s Olympic medal tally. It is a vehicle through which Indians can donate towards the development of athletes. Sania Nehwal, who has inspired many youngsters to take up badminton after winning Bronze in the 2012 Olympics, is one of its beneficiaries. 

OGQ also signed up another national favourite—Mary Kom—in 2009, helping her win many medals, including Bronze at the 2012 Olympics, and Gold at the 2014 Asian Games. It organised her training, took care of her family and monitored her fitness, while Kom focussed on boxing. Edelgive, the philanthropy arm of Edelweiss, a financial services conglomerate, has been funding Kom through OGQ since 2009, and has donated more than Rs 1 crore towards her development. After Kom’s success, Edelweiss is supporting three more female athletes—PV Sindhu (badminton), Ayonika Paul (shooting), and Pooja Ghatkar (shooting)—through OGQ. 

Vidya Shah, CEO of Edelgive and former CFO of Edelweiss, says many corporations are backing athletes through brand endorsements, but few are investing strategically in sports. According to Shah, strategic corporate investing in sports—which translates into investing in an academy or directly funding an athlete through an NGO—in India is still nascent. Corporates must back a cohort of athletes, not all of whom might succeed.

 The Tata Group has been supporting athletes and tournaments over the years. Ace archer Deepika Kumari has trained at the Tata Archery Academy in Jamshedpur since 2008, and is now a manager at Tata Steel; badminton player Ashwini Ponappa is a product of the Prakash Padukone Badminton Academy in Bangalore, which is co-supported (through funds) by Tata Capital. The company also supports the Tata Open International Badminton tournament and the Tata Capital Super Shuttlers. 

“A lot of senior corporates I’ve met say the one thing they wish they could do is set up a sports academy the way Pullela Gopichand has done for badminton, but we don’t have the expertise,” says Shah. “We’ll have to mature as an economy for sports to become an economic activity because at the moment, it is a philanthropic activity.”

Private enterprise or philanthropy, however, cannot always function in the absence of government bodies. Private leagues like the IPL, ISL, IBL and the Hockey India League (HIL) operate with a model where the league organisers are paying the respective government organisations a licence fee—and this seems to be working well for the sport and the athletes. 

The challenge lies in individual sports, those where professionalisation of leagues hasn’t fallen into private sectors yet, like in boxing and athletics. This is where some enterprising companies are coming into play. Kooh Sports is a startup that works with the government-run Athletics Federation of India to get technical certification to run Speedstar, a talent hunt for young runners. The programme is funded by corporate donors and aims to identify promising young athletes. 

“The American collegiate system is a very long shot in India. We will follow a more European, club-based, model, where the responsibility for developing sports will fall on leagues/franchises,” says Prabhu Srinivasan, CEO and co-founder of Kooh. “The Indian government is constrained by lack of resources.”

 But the government’s role so far does not arouse inspiration. 

Internal politics hold back India’s march towards the podium, says Mary Kom. “Boxing administrators are partial to athletes from their own states,” she says. “Manipur coaches only want Manipuri boxers. In Manipur, district-wise and state-wise, there’s partiality. We had a state championship and those who came from other districts didn’t have a chance because it was already fixed.”   

Viren Rasquinha, CEO of OGQ, says, “In China there is massive government support, but it’s not a democratic system. If you’re good, you’re forced to go play. In India we should have government support with consent from the athlete.” The comparison with China is interesting, especially in badminton, where India punches above its weight.

GoSports’s Sugavanam elaborates on the Chinese system: “In China, every state has 11 centres of excellence. In India, we have one Gopichand Badminton Academy! Every district in India should have one centre, and the top 30 players from the state should be trained in the state capital. The top 30 from all the states should go to the national centres. This would be well-structured and supervised by a central agency. It would generate not just quality players on a long-term basis, but also employment in terms of coaches, fitness trainer, cooks, etc.”

The 2014 Union Budget allocated Rs 1,643 crore (a 46.5 percent hike from the previous year) for the development of sports. This is used to fund the Sports Authority of India, the national sports federations, and in improving sports infrastructure and preparing athletes for Commonwealth and Asian Games. But the government’s help can extend far beyond funding. 

For private sports leagues and academies to take off, it must help organise sporting facilities. “The reason a lot of professional sports are spread through the year is because of infrastructure: All the stadia is owned by the government. 

There are very few private stadia in India,” says veteran sports commentator Charu Sharma, highlighting the issue of renting stadia for league matches. Under the current league system in India, tournaments take place over a very short period of time. But once they mature, and become comparable to other global leagues, they will spread out over several months. “Can you imagine renting a stadium for eight months? Infrastructure is a challenge: How do you build a stadium in a crowded, expensive place like Mumbai? And how do fans get there?” 

In order to enable teams to have their own facilities, Sharma suggests the government can help by granting parcels of land in urban areas to league franchises on the condition that they develop 100 percent of the land for sporting purposes. “They need to help the world of sport in real estate,” he says. “Getting land is a nightmare. Most projects are dead before they begin.”

That the decades-old approach to the development of sports in India has been a failure is no secret: Although we finished eighth—among 45 nations, and behind North Korea—in the 2014 Asian Games, we still have a long way to go for a medal tally comparable to successful sporting nations. Apart from cricket, India lags behind the rest of Asia, let alone the developed West, when it comes to the ecosystem required to develop sustainable sporting infrastructure and culture. 

But from the snatches of success that private support, enterprise and money have managed to achieve in the past few years, sports in India seems to have entered a new phase. And sports enthusiasts across the country seem to have discovered that it is as much fun cheering their favourite kabaddi player as it is cheering their favourite cricket star.
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