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The Business of Sports

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The Business of Sports The business of sports Playing to win as the game unfurls September 2016 KPMG.com/in | cii.in Table of contents Message from Sports market overview 5 Chair, CII Summit 17 Message from Indian sports ecosystem: 6 CII Chairman, Western Region 23 Governance and challenges Foreword India in sports: Key 8 29 metrics of success 9 Executive summary 41 Business of leagues Sports infrastructure Glossary 47 and training 63 55 The way forward 64 Acknowledgements 61 About KPMG in India 62 About CII 05 Message from Chair, CII Summit Over the past 10 years, Sports as to showcase themselves at a global an Industry especially in India has platforms like IPL, PKL etc. These changed fundamentally. Today, leagues have offered immense Sports is not just an active platform exposure to not just Indian players but for marketing and creating branding also to some international sporting opportunities for corporates investing legends. in Sports, but also creating value for fans across the country. Sporting Realizing the impact of Sports on leagues in India and across the world the entire economy, industry and have invited valuable support and entertainment in India, CII Western presence of corporate sector. Region is organising the 1st Summit on Business of Sports and Sporting leagues have not only Entertainment. We have put together Shrinivas Dempo promoted sports like Kabaddi, Soccer, this programme to seek some Hockey in India; they have also pertinent answers and advice on how Chair created value for all stakeholders in Government and Industry together can Summit on Business of Sports the fraternity. All leagues have had strengthen the sports ecosystem in and Entertainment 2016 varying levels of success in generating India. Chairman fan base, inviting sponsorships & Managing Director and ensuring financial viability and I am thankful for this opportunity to Chair the Summit. I would like to Dempo Shipbuilding profitability for team promoters. Fans & Engineering in India also prove to be an interesting take this opportunity to thank all the mix, with each being a loyal audience partners and speakers for their support to a specific sport. and guidance in putting together this programme. I hope the discussions at With formation and popularization the Summit will help us put forward of Sporting leagues in India, there some strong suggestions and ideas for is now an increased opportunity for Sports in India. young talent at the grassroots level © 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 06 Message from Chairman, CII Western Region Promotion of Sports across all with the Government, industry and spectrums of the society not only sports’ bodies, CII is enabling an ensures inclusivity but also creates environment that will be focused employment opportunities for its on promoting a sporting culture in people. Sports always brings a sense India and one that will place a special of national pride that is incomparable emphasis in recognising sports as an to any other form of entertainment. industry. Business of Sports has changed faces very rapidly in the recent past. The One of the many steps that CII introduction of entertainment and role took was to partner with KPMG to of corporates has been increasing and develop a report on the Business evolving. of Sports and Entertainment. The report explores and assesses the Sudhir Mehta Confederation of Indian Industry (CII) sports ecosystem in India, identifies has a National Sports Committee that the various stakeholders concerned Chairman is facilitating the creation of a sporting and addresses their specific issues Confederation of Indian culture in India. Therefore, as part of and challenges. The paper provides Industry - Western Region CII’s India@75 vision, the Committee recommendations for both the Chairman has developed a plan to broad-base Government and private stakeholders’ & Managing Director sports in India, help in infrastructure efforts in enabling sports in India and Pinnacle Industries Ltd development and provide technical emphasises the need to collaborate support for athletes through and synergise efforts, so as to take professional coaching and training the Indian sporting industry to the next centres to nurture and groom talented level. sportspersons. I would like to take this opportunity The National Sports Committee of to extend my appreciation to the CII is working towards creating an KPMG and CII teams who worked in ecosystem for Governments and developing this document. I hope this private sector companies to combine would pave way for future discussions efforts, and invest in sports. Through with all stakeholders in the industry. continued engagement and dialogue 07 © 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 08 Foreword Sports is inspiring, engaging, sports consumption are boosting immersive, emotion evoking, and a broadcasters and sponsors. rapidly growing industry worldwide. It is extremely important to build a The global sports industry, at dynamic sporting culture in India and one per cent of global GDP, is the need for the government and the estimated to be worth around private sector to collaborate in order USD600–700 billion. This includes to strengthen the sports industry. sports infrastructure, sports events, Lack of sports culture coupled with sports hospitality, training, and inadequate public resources impede manufacturing and retail of sports our performance in the global goods. While sports in India has sporting arena. usually been a government-led Jaideep Ghosh Corporate funding in sports may initiative, the private sector has Partner and Head historically participated through therefore be one of the answers corporate social responsibility to ignite development in India. The Transport, Leisure and Sports channels, PPP in sports gestation period for realising returns KPMG in India infrastructure development and for on such investments is long, but profit sports academies. Now, sports global experience shows us that it leagues have emerged as a primary could be potentially rewarding. vehicle for the private sector. This report attempts to highlight Impressive growth in viewership of the common grounds between sports other than cricket provides all stakeholders to enhance the a glimpse of our potential to be development of sports in India and a multiple sports nation. Further, create a road map for a potentially growing female viewership, successful collaboration between acceptance of ‘rurban’ sports business and sports. and increasing digital on-the-go Executive summary © 2016 KPMG, an Indian Registered Partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. 10 Overview The global sports market, comprising of infrastructure, The Indian sports sector is experiencing a sea of changes events, training and manufacturing and retail of sports with all-round developments initiated by the government, goods is estimated at INR37.8–44.2 lakh crore (USD600–700 the private sector as well as non-profit organisations. The billion), accounting for approximately 1 per cent of the global government is introducing game-changing schemes such GDP.01 Besides exercising a significant impact on the global as ‘Khelo India’ to address issues regarding infrastructure, economy due to its close association with other sectors, talent scouting and training facilitation. Private sector and including education, real estate and tourism, the sector also non-profit entities are also increasingly contributing to the contributes to improvements in general health and well- sector by organising leagues and tournaments, funding being of a country. talented sportspersons and getting involved in grassroots development. Global sports market size by key segments02, 03 Segment Market size (2014) Key trends driving the market Sports events INR5.1 lakh crore (USD80 billion) Key trends driving the market Sports apparel, INR19.7 lakh crore equipment and (USD310 billion) footwear Engaging fans through social media Sports clubs (fitness, INR6.7 lakh crore health and sports (USD105 billion) Increasing online consumption of sports training) Growing female viewership Infrastructure INR6.3–12.7 lakh crore construction, food (USD100–200 billion) and beverage and betting Increasing viewership, sponsorship and participation in sports other than cricket INR37.8–44.2 lakh crore Total (USD600–700 billion) Rising number of sports start-ups Source: “Winning in the Business of Sports”, A.T. Kearney, 15 February 2014 Growth in rural viewership numbers Of the above segments, sports infrastructure is a recognised industry in India, having gained that status in February 2016.04 Currently, the potential value of the sports infrastructure market is estimated at INR80,000 crore Global and Indian trends 05 (USD11.9 billion). Additionally, the sports sponsorship India-specific developments market in India grew approximately at 12.5 per cent year-on- year (y-o-y) in 2015 to reach INR5,190 crore.06 Source: KPMG in India’s analysis, 2016 01. “Winning in the Business of Sports”, A.T. Kearney, 15 February 2014, KPMG in India’s analysis, 2016 05. “How to turn Indian games
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