?Sport? in India isn?t considered an ?industry? in the conventional sense of the term. Business yes, but not an organised structured industry with big and small players operating on the basis of established and codified market rules. Rather, the sports business, valued at R2,500 crore invested annually, continues to be unstructured and disorganised. Despite this, however, India is now a favoured destination for sports events such as Formula One, is surely world cricket?s financial nerve centre, stages the world?s leading T-20 league in the form of the IPL, is considered a major market for European football leagues like the EPL, Serie A and La Liga, and finally has a sizeable audience more tuned to consuming global sporting spectacles than populations of many other western democracies put together.
It is an industry that has just witnessed the Star Group commit a whopping R3,851 crore to acquire Indian cricket television/mobile/internet rights for the years 2012-2018, creating a virtual monopoly over the cricket space. Star already owns the rights to ICC events such as the World Cup and also telecast rights for England and Australia, and this new acquisition will only help consolidate its market leader status in the cricket world.
What is more interesting in an ambience of relative gloom surrounding Indian cricket, a result of India?s downward performance spiral over the last year, is the astoundingly high figure that Star Group has pledged for the rights. It is considerably higher than what Nimbus, the erstwhile right holders, would pay, and is a 20-22% increase on the Nimbus amount. Add to this the fact that some of India?s biggest icons are on their way out. With Rahul Dravid already retired and VVS Laxman not far away, the biggest icons who dominated the Indian cricket horizon will soon be making way for newer stars. Sachin Tendulkar, too, isn?t expected to be around for more than two years. Finally, Olympic sports have been on an upswing in India recently and there were murmurs that cricket, finally, will have some competition.
This deal has once again put all speculation to rest. It has demonstrated yet again that cricket continues to dominate the Indian sporting scene as the numero uno brand and is still the safest bet for big-ticket investment. Uday Shankar, CEO Star Group and the brain behind the deal, put it well, ?We believe that cricket will continue to be the market leader and will only gain in strength in the years ahead. And while the biggest icons will not be there for long, we are confident there will be new icons who India?s cricket loving public will soon start to adore. With more and more ways of consumption opening up, the market for cricket only stands to grow bigger.?
A look at the Indian Olympic sporting scene and Shankar?s views start to make greater sense. The Indian Olympic Association and the sports ministry continue to be at loggerheads on more than one issue. Hockey India, the other important sports body in the country, continues to have regular skirmishes with the ministry, the most recent over the scheduling of the camp in Bangalore. And the CWG experience will always remain a nightmare, the less said about which the better.
In this scenario, cricket appears to be the only sport that has been managed and marketed professionally. Despite all its shortcomings, the BCCI has successfully marketed the game and has transformed India into the global market leader, and is now reaping the benefits of having done so. The sale of cricket rights for R3,851 crore shouldn?t be looked upon as a knee-jerk reaction. Rather, it should be looked upon as a tried and tested business strategy in a country that has the biggest consumer base for cricket, boasts of the largest middle class in the world and has a robust economy expected to grow significantly over the next five years.
To quote Shankar one more time, ?For us, it is a long-term strategy. We believe in the brand power of cricket and have invested in the brand long term. There?s no doubt cricket will continue to be the driver of the sports business realm, going ahead.?
Shankar, who is credited to have heralded a revolution of sorts in the cricket telecast space way back in 2001, is banking on the two big-ticket series within the next 12 months to get a head start. With 8 test matches (40 days of cricket) lined up against England and Australia between October 2012 and March 2013, Star can hope for a blockbuster start to its telecast of cricket played on Indian soil.
What will be of great interest, however, is to see how the company handles the retirement of Tendulkar, Indian cricket?s biggest-ever brand. In the last 23-plus years there has only been one constant in Indian cricket and that?s Tendulkar. He will surely not be around past 2014 and that?s when Star stands to pay the highest to the BCCI (it pays R32 crore per match between 2012-2014 and R40-plus crore per match thereafter). Will the market for cricket be the same in India post Sachin?s retirement? Will the institution actually prove to be bigger than an individual as is often claimed it is? We will only get definitive answers to these questions in the long term but till then at least we will have to compliment Star?s optimism.
The author is a sports historian