x Abu Dhabi, UAEWednesday 26 July 2017

People-power fuels India's brand engines

Business of sport: The names of top cricket players are probably not as familiar as their footballing counterparts and few yet benefit by the same financial margins. But there are some who do - and they are likely to grow in number.

As the likes of football players such as Real Madrid's Cristiano Ronaldo and Manchester United's Wayne Rooney take a summer break to spend some of the vast piles of cash they earn from the game, other sportsmen are busy toiling away for somewhat less.

The names of top cricket players are probably not as familiar as their footballing counterparts and few yet benefit by the same financial margins. But there are some who do - and they are likely to grow in number.

The India stars Sachin Tendulkar and Mahendra Singh Dhoni are the only two cricket players to make it into the Forbes list of the world's 100 highest-paid athletes. They have so far generated in their careers $22 million and $31.5m, respectively, the vast majority of their earnings from endorsements.

"Cricket stars have become brand engines," says Jehil Thakkar, the head of media and entertainment at KPMG in India.

"They've become endorsement machines, where they earn millions dollars a year. That has spawned its own kind of industry of managers and agents. They're really moving to more of a US model or an English Premier League stars model."

However, the result of the success of Indian cricket is more widely reflected than success in the beautiful game - which merely lines the pockets of pampered players.

The commercial value of cricket in the sub-continent has grown in tandem with the country's economy and television viewership.

Companies have cashed in on the sport as they seek the best avenues to promote brands and tap the nation's burgeoning spending power.

"I think the tipping point was really when India won the World Cup in 1983," says Mr Thakkar.

"That's when the country's obsession with cricket really took off.

"Then, through the 80s and 90s, India had a fairly successful cricket team, so the cricket hold on the country continued," he says.

"Ever since India's economic process started [gathering pace] in 1993, 1994, India's GDP growth took off, consumerism took off and the cricket tournaments, television, players, all started to get elevated because of increased sponsorship," Mr Thakkar adds.

"Brands were looking for outlets to reach the mass market. The film market wasn't that broad yet. Television was still limited to a few channels, so cricket was really a fantastic avenue for major brands to start reaching out and use it as a marketing vehicle."

Anil Wanvari is the founder and chief executive of indiatelevision.com, a media group. "It's the only sport which really gets audiences of the numbers of substance to advertisers and media agencies who want to reach out to large numbers of people," he says.

"Cricket is the only sport which gets those kinds of eyeballs. We're the nation that has really managed to commercialise the sport."

The launch of the Indian Premier League (IPL) in 2008, a glamorous, fast-paced tournament, elevated the commercial value of cricket to new heights. PepsiCo in November bought the title sponsorship rights to IPL for the next five years for $71m. India's conglomerates were quick to spot the business opportunity of IPL. Owners of teams include UB Group, best known for its Kingfisher brand, which bought the Royal Challengers Bangalore in 2008 for a estimated $112m. Sahara Group paid $370m for the Pune Warriors in 2010, the highest price for a club in IPL's history.

"It's a humungous exercise," says Mr Wanvari. "There's bidding for the cricketers, then there's sponsorship of every piece of real estate on the cricketers' vests, helmets."

The tournament has propelled advertising revenues associated with cricket in India.

"It's grown consistently and the growth curve has been fairly steep in fact," says Mr Thakkar. "It will continue to grow because [with] TV penetration in India, there's still room for macro growth."

Even corruption scandals surrounding spot-fixing in IPL are expected to have little impact.

"When a sport is as widely followed as cricket is in India, it's probably a short-term blip. As long as the correct actions are taken, I think the sport bounces back," says Mr Thakkar.

"Other than the teams themselves, [cricket] has really spawned a whole bunch of other businesses, like celebrity management," he adds.

Indian television reaches only 146 million households, so IPL has the potential to grow by another 100 million over the coming years, Mr Thakkar says.

"Cable and satellite penetration are still low compared to other countries. As television reach expands and as purchasing power increases, I think the money that will flow into cricket will only grow."

 

business@thenational.ae