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Business of

Shaping a Successful Innings for the Indian Sports Industry

A Report

kpmg.com/in Business of Sports Business of Sports

Acknowledgements

This document has been released at the “SCORECARD 2014 – National Conference on Business of Sports” organized by the CII.

We would like to thank the following for providing their valuable knowledge, experience and insights on the sports ecosystem of . •• Captain Amitabh, Head - Sports, TATA Steel •• Dr. Amirullah Khan, Development Economist •• Dr. Bharat Inder Singh, Sports Medicine Specialist and Medical Adviser, CII •• Deepak Jolly, VP-Public Affairs and Communications, Coca-Cola India & SWA •• Hemanshu Chaturvedi, Founder and MD, HTC Group of Companies •• Kishore Taid, Director & Co-Founder, Bhaichung Football Schools •• Manisha Malhotra, CEO, •• Mustafa Ghouse, CEO, JSW Sports Pvt. Limited •• Priti Srivastava, Vice President, Reliance Industries Limited •• Pulak Bagchi, Vice President – Legal & Regulatory, STAR India Pvt Ltd •• Ravneet Pawha, Country Director- India, Deakin University, Australia •• Sukhvinder Singh, MD, Libero Sports •• Virendra Kumar Mahendru, GM (Civil) & Head – Corporate Sports, ONGC Ltd •• , CEO,

We are grateful to the CII for their continuous guidance and support: •• Rajan Navani, Chairman, CII National Committee on India@75 •• Deepak Jacob, Co-Chair, SCORECARD 2014, and President & General Counsel, STAR India Pvt Ltd •• Shefali Chaturvedi, Senior Director, Confederation of Indian Industry & CEO CII Foundation

This report was prepared by KPMG team from India and Europe comprising Vishal Gada, Alastair Graham, Waman Parkhi, Márton Kadocsa, Zoltán Buday, Arpita Gupta, Mohit Mittal, Pratik Soni, Snegdha Gupta, Pritesh Chhajed and Kanupriya Mundhra, under the leadership of Jaideep Ghosh, Partner, Management Consulting, KPMG in India, and Andrea Sartori, Partner & Head of KPMG Sports Advisory in Europe. Message from the Chairman

Sports has been a force for good ever since humanity existed. It brings people together, catalyses cultural and societal change, encourages free spirit, instils discipline and significantly enough, teaches people to win and lose. History corroborates all the above - Jesse Owens winning those gold medals in the 1936 Summer thereby becoming a symbol of equality, Muhammad Ali winning the world heavyweight championship in 1964 at the age of 22 thereby redefining tenacity, to epitomising the values of an average middle class and many others. Intrinsically, the importance of sports too has been in promoting an active healthy Atul Singh lifestyle, creating a culture of sportsmanship and team spirit and helping in the overall Chairman development of an individual. To a nation, however, promoting sports brings in the CII National Committee spirit of the game, the national pride, a sense of social inclusiveness and of course on Sports, and employment opportunities. With increased government spending on local and global Group President sports events and Indian athletes winning international acclaim, sports seems to be on Asia, The Coca-Cola Company a steady footing but there is still lots that needs to be done. The Confederation of Indian Industry (CII) has a National Sports Committee dedicated to Sports that is facilitating the creation of a sporting culture in India. Therefore, as part of CII’s India@75 vision, the Committee has developed a plan to broad-base sports in India, help in infrastructure development and provide technical support for athletes through professional coaching and training centres to nurture and groom talented sportspersons. The National Sports Committee of CII is working towards creating an ecosystem for Governments and private sector companies to combine efforts, and invest in sports. Through continued engagement and dialogue with the Government, industry and sports’ bodies, CII is enabling an environment that will be focused on promoting a sporting culture in India and one that will place a special emphasis in recognising sports as an industry.

One of the many steps that CII took was to partner with KPMG to develop a report on the Business of Sports. The report explores and assesses the sports ecosystem in India, identifies the various stakeholders concerned and addresses their specific issues and challenges. The paper provides recommendations for both the Government and private stakeholders’ efforts in enabling sports in India and emphasises the need to collaborate and synergise efforts, so as to take the Indian sporting industry to the next level. I would like to take this opportunity to extend my appreciation to the KPMG and CII teams who worked in developing this document. I would also like to thank my colleagues at the National Sports Committee, CII, for their passion and dedication towards building sports in India. Foreword

Sports is a rapidly growing industry worldwide. The global sports industry is estimated to be worth around USD 600 billion comprising a range of associated businesses such as sports manufacturing, retail, tourism, sports medicine, venues & infrastructure, media & hospitality and merchandising. While sports is an organized business in developed economies, this has been a Government led initiative in India where corporate sector’s presence have often Jaideep Ghosh been through corporate social responsibility channels. The exception has been the commercial sporting formats leagues, especially in cricket, where corporate sector Partner has been very active in recent years. Management Consulting KPMG in India It is critically important to build a dynamic sporting culture in India and the need for the government and the private sector to collaborate to strengthen the sports industry. Inadequate public resources for sports and low prominence of non- cricket sports impede our performance in the global sporting arena. Corporate funding in sports may therefore be the answer to ignite sports development in India. The gestation period for realizing return on such investments may be long, but global experience shows us that it could be potentially rewarding. This report attempts to highlight the common grounds and creates a roadmap for Sports to meet Business!

Executive Summary

The global sports sector is estimated community engagement by utilising the to be worth USD 480–620 billion1, mass medium of sports. However, in India, is yet to be The main modes of private investment recognised as a sector and there is no and private sector association with sports comprehensive study on the industry’s include: estimated size in the country. The sports sector may comprise several segments • Non-profit: These include CSR such as sports tourism comprise several initiatives and investments in the segments such as sports tourism, sector by leading corporate houses, sporting goods (manufacturing and and non-profit foundations. These retail), sports apparel, amateur and foundations are chiefly involved in professional sports, recreational sports, providing opportunities to children high school and college athletics, outdoor from the under-privileged sections to sports, sports businesses such as sports take up sports, supporting promising marketing firms, the sport sponsorship sportspersons in accessing world- industry and sport governing bodies. class training facilities and developing sporting infrastructure. A thriving sports sector usually has significant socio-economic impact, as it • For profit: This pertains to the is instrumental in improving the physical commercial interests in the health and mental agility of a nation’s sports sector, and covers the human resources, and in promoting unity entire spectrum of sports goods and national pride. In fact, sport as an manufacturing, retailing, establishing industry contributes to about one to five sports academies, providing per cent to the GDPs of various countries. sports curriculum services to However, a lack of sports culture in India schools and colleges, owning has deferred the formation of a similar leagues and franchises, player industry in the country despite growing management agencies, media awareness, interest and successes in houses, infrastructure development various non-cricket sports such as , companies and other companies , , chess, hockey, tennis, that seek marketing avenues for snooker, billiards, shooting and their brands through sponsorship at prominent international competitions. association with sports tournaments and players. Due to a lack of industry status and lack of sports culture, corporate investment In India, non-profit association with in sports in India has traditionally been sport is more common. For-profit limited to CSR initiatives. However, investment in mainly international and domestic examples includes sponsorships and owning have shown that investment in sports leagues and franchises. The commercial has high potential tangible return on success of (IPL) investment (RoI), albeit a long gestation in cricket has led to a surge of similar period for commercial returns in case of commercial formats in other sports

1. “The Sports Market”, AT Kearney, 2011 league franchises, and has significant such as badminton, football and hockey. intangible RoI as well. The intangible RoI Reasonable success of the Indian stems from increased brand awareness, Badminton League (IBL) and the Hockey brand building among target customers India League (HIL) — sports that don’t and increased brand loyalty through enjoy the same popularity as cricket, has shown that leagues are a good medium sports ecosystem that can sustain Therefore, a good strategy for attaining for generating interest and driving sports people’s increased interest by breeding the CII India@75 vision could be to culture besides the potential RoI. These more quality sportspersons who can continue strengthening the base of leagues may therefore not only benefit win laurels at international sporting sports that India excels in while investing their respective sport monetarily, but also events and elicit further enthusiasm. The in building a talent pool for sports that boost their uptake in the country. success of leagues and development have a high medal potential, such as of sports ecosystem therefore drive aquatics and athletics. Thus, with the burgeoning middle class each other. This further underlines the of India and an increasing disposable long-term nature of commercial returns The Government has been working income, media coverage of international in leagues due to its dependence on the towards developing the overall sports and domestic sports and television development of the sports ecosystem in ecosystem to increase medal wins, albeit and internet penetration, the time is the country in the long run. few implementation issues and limited opportune to form an organised sports resources. However, concentrated and sector with requisite policy support that In keeping with the above, the joint efforts are required from both the further facilitates sports commerce and Confederation of Indian Industry (CII) Government, in terms of adequate policy leagues of this nature. has re-adopted the Government’s twin support such as provision of industry However, long term sustainability of objectives of broad-basing sports and status and relief on import duty for commercial efforts such as leagues achieving excellence in them, as part of sports equipment to private sector, and will likely thrive on profitability metrics its India@75 vision for sports because the private sector in terms of building driven by India’s performance at global working along these objectives would innovative sustainable business models events, their popularity in the country drive business of sports. The CII vision for creation of sports infrastructure, and the consequent rise in audience is further linked to winning a desired academies and franchises, to allow interest. Thus, the leagues that could number of medals in the 2020 Olympics. business of sports to grow beyond be an agent to rise in sporting culture The Olympic sports that India excels leagues and sponsorships and turn require support from a well developed in are not medal-intensive, with the India’s sporting vision into reality. exception of shooting and wrestling.

Sports Vision of India

Source: CII

Sports ecosystem

Sports ecosystem comprises different stakeholders, within and across various dimensions or segments that go into segments. The levels of transparency establishing and developing a sport and and professionalism of the system, various stakeholders in each segment. coupled with growing awareness of all The evolution of a sports ecosystem stakeholders, decide the extent of the may be evaluated by the extent of sports ecosystem’s evolution. interaction and awareness among Sports Ecosystem of India

Source: KPMG Analysis Identifying key stakeholders and Sports coaches and trainers are •• Leagues and tournaments: Key addressing their issues and challenges primarily trained in Government-run stakeholders involved in this segment is likely to go a long way towards institutes. There are some private are broadcasters, franchises, strengthening the sports ecosystem universities as well that offer courses National Sports Federations (NSFs), in India. While the sports ecosystem is in sports, physical education and sponsors and spectators. The role of largely driven by the Government and other sports-related sciences, albeit broadcasters and league owners in Government-run bodies currently, the on a limited scale. Private sector designing a spectator-friendly format role of private sector stakeholders is on a contribution in this segment is also becomes crucial to the commercial rise and can be crucial to get the desired seen by way of certain academies success of leagues, for instance the momentum: that provide active consultation to IPL, HIL, etc. the Government in addressing the •• Sports governance: The role of skill gap in sports coaching in India, •• Performance incentives: Central private sector in sports governance and through private academies and state Governments provide a is limited. However, there are and sporting leagues that appoint majority of performance incentives instances of private sector deals with a foreign coach who in turn shares to sportspersons in the form of sports federations for overhauling/ expertise with Indian coaches. government and PSU jobs, pension improving the respective sport. Such funds, educational scholarships and deals provide the usually cash- •• Infrastructure: Private sector cash endowments. The role of private starved National Sports Federations contribution to sports infrastructure players is currently limited, but it is (NSFs) a financial breather to go is minimal and is limited to PPPs for emerging gradually with the advent about implementing plans for their sports infrastructure development of non-profit foundations providing respective sport’s improvement. and operation. Some non-profit athlete sponsorships, and sports efforts towards stadia development consulting firms that help athletes •• Talent scouting and training have also been witnessed, but they with post-retirement planning. players and trainers: There is a are limited in number. reasonable presence of private Though private players are involved academies being run on a self- •• Sports equipment industry: Key in various capacities in the sports sustainable basis by former players stakeholders in this industry are ecosystem, the business of sports in of various sports. These academies equipment manufacturers, retailers, India continues to be at a nascent stage. try becoming sustainable by saving consumers, and private sports Investing in leagues has become an on capital expenditure through levers academies. While India is a major important for-profit mode of entering such as leasing playgrounds from exporter and manufacturing hub the sports sector. However, profitability schools and government institutions, of certain sports goods, importing in the league format has also been a rather than owning space. There is equipment for some non-popular concern especially for non-cricketing also a significant presence of leading sports significantly increases their sports leagues that elicit little interest corporate houses through their CSR cost. from broadcasters due to inadequate initiatives, and non-profit foundations spectator base — considering the fact in the talent scouting and training that media rights is one of the biggest players segment. sources of league revenue. The sports sector has long gestation the game into a major source of revenue sportspersons and foreign teams periods for investments. For instance, generation. The task at hand, therefore, participating in various national and it took cricket sustained investments a is to examine the inherent challenges in international sporting/entertainment long time to transform itself from being the sports ecosystem and address them. events in India has been a vexed issue. a gentleman’s game to being a game of The key is to inculcate a culture of sports There are issues on the indirect tax front the masses. Its current mass popularity that would help improve our players’ as well such as those relating to levy attracts huge crowds, numerous performances and generate spectator of import duty on sports equipment. sponsors and high media rights bids for interest. Addressing such issues is important to various tournaments. This has helped improve the sports ecosystem of the the Board of Control for Cricket in India Further, there are issues with respect country. (BCCI) become a successful and self- to direct and indirect tax that need sustainable federation and has turned to be addressed. Taxation of artistes,

Key issues and recommendations Some key issues have been identified across various segments of the ecosystem and a set of recommendations have been suggested to drive their resolution. The following table highlights these recommendations.

Table1: List of issues and recommendations

Segment of the Issue Recommendation ecosystem

• Nationwide campaign to raise awareness on sports • Implementation of a uniform sports policy across all states Lack of sports culture in India Overall • Active regional/local media supporting the cause of developing sports in India

Limited funding avenues in sports • Provision of industry status to sports

Lack of transparency • Strict implementation of the Sports Bill 2013

Limited community-level engagement in • Incorporation of a community-level Engagement Team under sports despite the Panchayat Yuva Krida the aegis of Ministry of Youth Affairs and Sports(MYAS) Sports governance Aur Khel Abhiyan (PYKKA) which may also help NSFs organise competitions

• Institution of a Corporate Relations Team under the aegis of Limited commercial focus of governing MYAS that could help Sports Authority of India (SAI) and the bodies community-level Engagement team to deliver on their plans

Lack of coordination among the • Identifying and promoting collaboration among all concerned concerned bodies affecting professional stakeholders to encourage more innovative business uptake of sports collaborations Lack of coaches and technical know-how • Collaboration between SAI and National Sports Federations on sports in India (NSFs) to train coaches • Allowing access of public infrastructure to private training Scarcity of playing spaces and high academies in lieu of reasonable fees Talent scouting and capital expenditure required to establish training of players private training academies • Consideration of alternative modes of financing such as and trainers revenues from naming rights by private academy owners Imposition of customs duty on training • Relief/exemption from duty for private academies if the equipment imported by private equipment is imported for academy players who have academies vs. duty exemption on the consistently performed well at the inter-state or national level same import by the Government or above

Inadequate support to former • Continued increase of public-private fund such as the sportspersons launching private National Sports Development Fund (NSDF) could provide academies financial support to upcoming academies Segment of the Issue Recommendation ecosystem • Central and state Governments and NSFs may promote Lack of awareness on opportunities for awareness on opportunities for sport coaches by providing sports coaches case studies on typical career paths, opportunities for further Talent scouting and development and companies’ recruiting coaches training of players and trainers • Evaluation of demand by the Government for these courses Lack of specialised courses in nutrition, and the establishment of lucrative incentives by the sports medicine and psychology Government for their inclusion in existing private and public universities • Legacy planning to be done before the construction Insufficient legacy planning for various of stadia/assets begins in order to incorporate future games hosted by India leading to poor requirements post international events as per the legacy plan asset monetisation into design of assets

• Mandatory implementation and periodic review by the Limited implementation of existing Central Government on the status of implementation Sports schemes of schemes such as PYKKA and National Playing Fields infrastructure Association of India(NPFAI), at the state level

• Revision of policies and consideration of methods such as innovative PPP models by the Government to attract Limited corporate investment in sports corporate investment in sports. infrastructure development • Creation of repository of case studies of successful instances of corporate investment in infrastructure

• Integration of sports apparel exports with the Sports Goods Lack of a unified representation for the Export Promotion Council (SGEPC) for holistic promotion of sports equipment industry the sports products sector

Sports equipment • Government policy could be targeted at bucketing some equipment for sports training under sports goods and levying Non-recognition of some sports training customs duty accordingly, for instance wrestling mats and import items as sports goods boxing gloves may be treated as just sports goods and not classified under generic gloves and mats Lack of transparency in the governance • Implementation of a uniform robust legal framework for of leagues governance across all leagues

Leagues and • Better packaging of events can make the leagues spectator- Poor monetization of leagues tournaments friendly Limited engagement of franchises with • Concentrated efforts by franchises to engage with local local communities community to build fan base and, hence, attract audiences

Lack of policy ensuring financial security • Collaboration among NSFs and sports consulting firms to Performance post-retirement for some players plan players’ careers post-retirement incentives for • Provision of industry status to sports sportspersons Limited career options within the sports • Active collaboration among stakeholders to help strengthen ecosystem the commercial aspect of leagues and franchises. • Lack of clarity on the: –– Rates at which prize money and unguaranteed participation fee would be taxed. –– Taxability of global sponsorship and Direct tax advertisement revenue and prize money i.e., whether to tax global sponsorship, advertisement revenue and prize money in India and to what extent. –– Taxation mechanism if there is a triangular treaty scenario. To further develop these as corporate organizations and media recommendations and work on houses and other Government societies additional initiatives, it is recommended such as Central Board of Secondary to form a Joint Working Group (JWG) Education (CBSE) and National Council comprising stakeholders from relevant of Educational Research and Training ministries of the central and state (NCERT). The following table presents Governments, sports governing the key stakeholders that could be part of bodies such as NSFs and State Sports the JWG and the likely benefits from the Association (SSAs), private players such formation of such a committee.

Table 2: Stakeholders and potential to them from the formation of JWG

Stakeholder Potential benefits from the formation of JWG

• Formulation of a holistic policy Central and state • Realization of the Government’s vision on sports Governments gets expedited by leveraging existing capabilities of other JWG stakeholders

• Potential increase in sponsorships through Sports governing bodies networking such as NSFs, SSAs and Indian Olympic Association • Inclusion of suggestions from sports governing (IOA). bodies on the formulation of common governance framework across all sports

• Increased awareness among various stakeholders on private sector activities in various segments of the sports ecosystem Corporate organizations • Increased ideation and collaboration on strengthening the commercial potential in sports • Increased support to corporate houses investing in sports, with a focus on PPP models

• Exploring opportunities for increasing popularity Media and viewership for sports in India

Other Government agencies/societies such • Support from various stakeholders, especially as NCERT, CBSE and the Government, toward implementing a holistic National Skill Development education and workforce training policy/plan Corporation (NSDC)

Lack of sports culture and non- but investment in sports could also lead recognition of sports as an industry in to high social return on investment (RoI) India are among the major challenges in terms of brand building by reaching out for the business of sports in the country, to a significant segment of the population. which is expected to gain momentum Therefore, the time is ripe to facilitate by the introduction of more leagues on investment mobility so that corporate the lines of IPL. The gestation periods houses that are already engaging in in the sports sector may be long, but it sports can upgrade to for-profit sporting has high revenue generating potential ventures, while business houses that are and the Government and private sector not involved in sports so far may consider should synergize their efforts to establish this sector as an ideal avenue for CSR a flourishing sports industry in India. This activities. can not only generate commercial returns

Table of contents

1 Introduction 01

1.1 Importance of sports to a nation 03 1.2 Performance of India in sports 04 1.2.1 Performance at international events 04 1.2.2 Performance of states in the National Games 08 1.2.3 Learning from the leading states 09 1.3 Strategy for India@75 Vision 10

2 Sports ecosystem 13

2.1 Sports governance in India 15 2.2 Talent scouting and training of players and trainers 19 2.2.1 Overview of initiatives in talent scouting and training 19 2.2.2 Role of Stakeholders in training the trainers 23 2.3 Sports infrastructure 26 2.4 Sports Equipment and Apparel 32 2.5 Leagues and tournaments 34 2.6 Sports as a career — opportunities and performance incentives 44

3 Taxation in the sports sector 47

4 Recommendations 51

Glossary 65

Definitions 68

About KPMG in India 69

About the CII 70 01 Business of Sports

1. Introduction Business of Sports 02

Globally, the sports sector is estimated tourism, manufacturing and retail. India’s to be worth USD 480–620 billion1 and Draft National Sports Development Bill, contributes about 1–5 per cent to the 2013, recognises 66 kinds of sport. Even GDPs2 of various countries. In India, if a few of the recognised sports are fully sport is yet to be recognised as a sector developed and monetised, sport as a and there is no comprehensive study sector can contribute significantly to the on the industry’s estimated size in the country. country. Moreover, the definition of The young burgeoning middle class of the term ‘sector’ is ambiguous and India with their increasing disposable differs from country to country. West income offers huge consumption Virginia University, United States, has potential for the business of sports. The defined the sports industry as one that viewership of sporting events has been consists of several different segments, steadily rising in the country and so is including sports tourism, sporting general awareness on fitness. This is goods (manufacturing and retail), sports good news for the industry, as this would apparel, amateur and professional sports, foster the adoption of active lifestyle by recreational sports, high school and people through various means, including college athletics, outdoor sports, sports playing various sports. However, there is businesses such as sports marketing a need to vigorously promote a sporting firms, the sport sponsorship industry and culture in the country to encourage the sport governing bodies. consumption of community sports. This The definition highlights the vastness would, in turn, facilitate the creation of an of the sports sector and association environment that is conducive to sports with several other industries such as commerce. education, real estate, infrastructure,

• 29.3 per cent3 population in the age group of 0-14 years

• Middle class as a per centage of population is estimated to increase from 4 per cent in 2005 to 41 per cent by 20254

• The average share of educational and recreational activities in the annual household consumption is estimated to increase from 5 per cent in 2005 to 9 per cent by 20254.

India hosting international events has also • Launch of leagues similar to IPL in increased awareness on sports in the other sports such as hockey, football, country, and, subsequently, about their badminton and golf by sports socio-economic impact. The establishing federations in collaboration with of sporting leagues in India has made private parties sports more commercial, though • Hosting of global sporting events such cricket has benefited the most. Some as the Commonwealth Games (2010), noteworthy events in recent years are: Cricket World Cup (2011), Formula • Commercial success of cricket and the 1 Grand Prix (2011 onward) and the Indian Premier League (IPL) World Chess Championship.

1. “The Sports Market”, AT Kearney, 2011 2. “Sports Retailing in India: Opportunities, Constraints and Way Forward”, INDIAN COUNCIL FOR RESEARCH ON INTERNATIONAL ECONOMIC RELATIONS, June 2010 3. Economist Intelligence Unit, https://www.eiu.com, accessed January 2014 4. “Tracking the growth of India’s middle class”, The McKinsey Quarterly, 2007 03 Business of Sports

1.1 Importance of sports to a nation

Sports can make significant socio- Case study: socio-economic impact of sports on England5 economic impact on a nation and its citizens. It plays an important role in Economic impact • Participating in sports is believed ensuring physical fitness and healthy • In 2010, sports and sports-related to curb youth crimes and anti-social lifestyle among the citizens of a country. It activities generated a Gross Value behaviour. It also leads to improved unites people from diverse backgrounds, Added (GVA) of £20.3 billion, health and education standards. hence promoting peace and development. contributing to about 1.9 per cent of • Sports also impact the environment With the Government providing England’s total GDP while placing it positively since it encourages more numerous opportunities to sportspersons, within the top 15 industry sectors in physical activity such as walking and sports also promotes social inclusiveness. the country. cycling, which reduce emissions and The sports sector has the potential to • The sector is estimated to support congestion. make significant contribution to the over 400,000 full-time equivalent jobs, economy. Though there is no study in • It encourages volunteering and the which is about 2.3 per cent of all the estimated economic value of sport- India that assesses the socio-economic jobs in the country. impact of the sector, a study undertaken related volunteering in 2010–11 was by Sport England in 2013 highlights the Social impact £2.7 billion. significant contribution that it could make Apart from economic impact, sports • Performance in sports is one of the to a country’s society and economy. also make significant social impact in major drivers of national pride. the following ways:

The potential of sport in bringing about Case study: Sport the Bridge6 a positive social change is evident from initiatives such as the ‘FIFA Football Based out of Berne, Switzerland, Sport through sports. Sport the Bridge, for Hope’ movement. This is a global the Bridge is an NGO that aims at the Ethiopia, currently supports about 200 movement that seeks to provide personal development of children children and helps them prepare for visibility and support to various social through sports in the country and across family life through sports such as soccer, organisations that use football as an the globe. martial arts, athletics, tennis, basketball, circus, juggling and dance8. This initiative instrument in their social development Sport the Bridge runs a special program was nominated for the Beyond Sport programs. ‘Sport the Bridge’ is another in Addis Ababa, Ethiopia, that serves Award7 in the category of best project such initiative that lays emphasis on sport more than 60,000 street children7. The for social inclusion in 2009 and is part of pedagogies to promote social inclusion NGO seeks to help these children re- the FIFA Football for Hope8 movement among street children in Ethiopia. integrate into the society and families by since 2010. imparting lessons on social behaviour

India’s economic growth potential, thanks correct Body Mass Index levels and about to a large young population, is of interest 20 per cent demonstrate signs of obesity. to the entire world. Inculcating a healthy Nearly one in two children covered under sporting culture among its youth to build the study have poor flexibility levels and a physically and mentally sound nation is body strength. It has been observed that integral in ensuring sustainable growth fitness levels drop sharply as children in the future. As per a survey conducted grow older, highlighting the risk of an unfit by EduSports in 2011–12 covering more generation. The survey highlights lack of

5. “Economic value of sport in England”, Sport England, July 2013 than 49,000 across the country, obesity structured inclusive sports curriculum as 6. “Sport the Bridge”, http://www.sportthebridge.ch/english/, accessed 15 is increasing among schoolchildren in the primary reason for alarming obesity January 2014 7. “Ethiopia-Sports builds bridges”,http://www.beyondsportworld.org/ urban India with one in four in the metros and poor health levels apart from lack of member/view/59/Ethiopia%20-%20Sport%20builds%20bridges, and one in six in non-metros being proper sports infrastructure and urban accessed 15 January 2014 9 8. “Sport the Bridge Ethiopia”, http://www.sportthebridge.ch/english/ overweight . According to the survey, lifestyle. ethiopia/, accessed 15 January 2014 9. “3rd Edition of the EduSports School Health and Fitness Survey”, about 39 per cent children do not have EduSports, 2012 Business of Sports 04

The survey supports the findings the ’s objectives of of a previous study conducted by achieving excellence in sports and broad- the Government of Kerala among basing them as part of its India@75 vision. schoolchildren as part of its Total Physical CII’s India@75 vision as a means of Fitness Program10. Kerala ranks high building strong sporting culture aims to on health and education parameters attain the following objectives: in comparison to majority of the Indian states. However, the fitness standards • Achieving excellence in sports - Win of schoolchildren in the state were 20 gold medals at Olympics 2020. found to be low in comparison to the • Broad-basing of sports in India - minimum recommended standards. In Create sports infrastructure accessible 2010–11, only ~16 per cent of the state’s to common people in tier 2/3 cities; children from classes five to 10 met the appoint coaches in infrastructural minimum recommended standards on facilities and provide them with all health-related physical fitness test equipment; provide 10,000 children in items. The results of the Government of rural areas with scholarships to pursue Kerala survey highlight that the overall sports. fitness levels of schoolchildren across the country is dismal. How far India is from achieving these objectives can be assessed by analysing Therefore, sports not only instil pride its past performance at international among a nation’s citizens, but they sporting events. This may also help also facilitate social and economic identify potential improvement or focus development of a nation. This can be 10. “Exposure Draft on National Physical Fitness Programme for School areas, and bring the country closer to Children”, Ministry of Youth Affairs and Sports-Government of India, 2012 achieved by building a sporting culture in achieving its goals for the sector. the country. That’s why CII has adopted

1.2 Performance of India in sports

India is not considered a sporting as badminton, boxing, cricket, tennis, nation and lags in majority of sports. shooting and wrestling. This demands a Its performance has not stood out at thorough analysis of India’s performance international events such as the Olympic at recent sporting events to formulate a Games. However, at an international strategy for Olympics 2020. level India excels in a few sports such

1.2.1 Performance at international events

The country’s performance has not which have traditionally performed better been up to the mark at various Olympic due to their core competence in some Games. India’s medal tally has witnessed individual sports like athletics and boxing, marginal improvement in the past few respectively. India’s Olympic Games Olympics Games, with the 2012 games 2012 performance can be judged on the being the best so far for the country. following parameters, where the country India’s Olympic medal tally has increased won only: from zero in 1988 and 1992 to one each • 3.3 medals per USD 1 trillion of GDP in the 1996, 2000 and 2004 Olympics. versus 10.5 of China, 40.2 of Russia, This was followed by three medals in 162.3 of Ethiopia, 217.4 of Cuba and 2008 (including the first Olympic gold 808.5 of Jamaica medal for India) and six medals at the London Olympics 201211. However, • 0.005 medals per 1 million people India lags far behind countries such as (population) versus 0.331 of China, Australia, China, , South Korea, 0.564 of Russia, 0.076 of Ethiopia, Russia, the U.S. and some smaller 1.331 of Cuba and 4.425 of Jamaica 11. www.olympics.org,accessed 15 January 2014 countries such as Ethiopia and Cuba, 05 Business of Sports

Figure 1.1 : Comparison of performance of nations in terms of medals, medals to GDP and medals to population at the Olympics

Source: www.olympics.org accessed 15 January 2014, data.worldbank.org accessed 15 January 2014, KPMG Analysis

India has traditionally performed better in the Asian Games), Russia, Germany in the Commonwealth Games and Asian and France, do not participate in these Games than the Olympics and it has games. managed to rank among the top nations. Nonetheless, as shown in Figure 1.4 and This may be attributed to the fact that Figure 1.5, India’s performance at the less countries participate in these games Commonwealth and Asian Games has than the Olympics and some of the top improved considerably over the years Olympic nations, such as the United States, People’s Republic of China (not part of the Commonwealth but takes part

Figure 1.2: India medal tally and rank in Commonwealth Games since 1990

Source: http://www.thecgf.com/countries/intro.asp?loc=IND accessed on 15 January 2014 Business of Sports 06

Figure 1.3:India medal tally and rank in the Asian Games since 1990

http://www.olympic.ind.in/images/AGMedalTally.pdf accessed on 15 January 2014

India has performed well in certain non-Olympic sports as well, such as cricket, chess, snooker and billiards.

Table 3: Achievements of India in certain non-Olympic sports

Sport Achievements

• Winner of Cricket World Cup in 1983 and 2011 Cricket • Winner of World Twenty20 in 2007 and 2013 ICC Champions Trophy

• has won the World Chess Championship five times (2000, 2007, 2008, 2010 and 2012) • Indian women’s chess team finished fourth in the Chess Olympiad at Istanbul in 2012 Chess • Indians won eight medals at Maribor, Slovenia, in the World Youth Chess Championship 2012, including three gold medals • Parimarjan Negi won the Asian Continental Championship 2012 at

• In the last 20 years, India has won the World Championship five times • Pankaj Advani has eight world titles under his belt. He also won the gold medal for the English Billiards Singles event at the Asian Games. He won the World Billiards Championship in 2009 Snooker and and 2012 billiards • Anuja Thakur won the WLBSA ladies world billiards championship in 2005 and Chitra Magimairaj won the Australian Open Women in 2008 • India has performed well at the Asian Games since 1982, winning a gold medal in each of the games. 07 Business of Sports

Contribution of individual states at the Olympics, Commonwealth Games and Asian Games

An analysis of India’s performance at various international events also highlights the contribution of a few states in India’s success.

1. Performance at the 2008 and 2012 Olympics India has won nine medals in total in ( and ), the last two summer Olympics. If we two to ( categorise athletes on the basis of and ), two to states where they received a majority () and one medal each of their training or spent a substantial to Punjab (), Himachal portion of their youth, then two Pradesh (Vijay Kumar) and Manipur medals can be attributed to Haryana ().

2. Commonwealth Games 2010 India showcased its best performance states. Punjab, , Andhra so far at the Commonwealth Games Pradesh were other states that (CWG) 2010 with an overall medal tally performed well. The contribution of of 101 medals. Haryana’s performance Manipur, considering it has a small was significantly better than other population, was also significant.

Figure 1.4:Contribution of individual states to India’s CWG 2010 medal tally

Source: http://blogs.wsj.com/indiarealtime/2010/10/15/indias-cwg-medal-winners-men/ accessed on 18 November 2013, http://blogs.wsj.com/indiarealtime/2010/10/15/indias-cwg-medal-winners-women/ accessed on 18 November 2013, KPMG Analysis

3. Asian Games 2010 Out of the total 65 medals won by This holds true for domestic games as India at the Asian Games 2010, 20 well, with a few states accounting for a were won by sportspersons from significant share of the total medals. Haryana. Sportspersons from Manipur, Kerala, , Andhra Pradesh and Maharashtra also performed well. Business of Sports 08

1.2.2 Performance of states in the National Games

The National Games 2011 were held in Jharkhand. Figure 1.5 demonstrates that Manipur and Haryana were the best performing states on the basis of the number of gold medal wins.

Figure 1.5: Number of gold, silver and bronze medals won by top 15 states respectively at the National Games 2011

Source: http://www.34thnationalgamesjharkhand.in/ accessed on 15 January 2014

The absence of large states like Uttar Pradesh, West Bengal, Gujarat and Rajasthan from the top 15 states could mean that these states are not doing enough to cultivate their sporting talent.

Figure 1.6: Number of medals won at the National Games per 1 million population of state

Source: http://www.34thnationalgamesjharkhand.in/ accessed on 15 January 2014, Census 2011, KPMG Analysis

Figure 1.6 establishes that states such Rajasthan, West Bengal and Uttar as Haryana, Jharkhand, Kerala, Manipur, Pradesh lag behind. These states should Mizoram and Punjab fare well on the work toward instilling a sporting culture medals-to-population ratio. But populous and producing successful sportspersons. states such as Bihar, Gujarat, Orissa, 09 Business of Sports

1.2.3 Learning from the leading states

Athletes from Haryana and Manipur have few editions of the National Games of been making significant contribution India. Their success can be attributed to India’s performance at recent to the policies of their respective state global events such as the Olympics, Governments and to the presence of a Commonwealth Games and Asian healthy sporting culture. These states can Games. The two states are also among be the role models for other states, and the top performing states in the last the country as a whole.

Case study — Haryana 12

Even though the state has less than 2 These students are then supported winners and other stakeholders in per cent of India’s land and population, financially and provided with training, sports: its contribution to national sports has proper diet and health checkups. • Winners and participants of been higher than other states. The credit A yearly appraisal assesses the various sporting events: Financial for Haryana’s success can largely be progress and further assistance is incentives, government jobs attributed to Government policies in the provided based on this assessment. and reservation in admission past few decades. Sporting events are held from block to professional institutions level to the state level throughout The Haryana Government has adopted are awarded to the winners in the year for students to compete and a focussed approach to develop sports. various international events. For hone their skills. The state’s sports policy was launched example, gold medal winner in the in 2006 and has been regularly revisited 2. Infrastructure: To support Olympics/Paralympic Games 2016 and updated — there has been an development of sports, the state has would be awarded INR 5 crore. increase in the incentives for sportsmen built the following infrastructure such This initiative is essential since it and several initiatives have been as: incentivises athletes to perform launched. Three important aspects of • 46 schools to train athletes, well in various international the state Government’s policy are: including provision of free hostel, events, encourages parents to allow their children to pursue sport 1. Talent spotting and grooming: The games kit and food professionally and secures the Government has launched the ‘Play 4 • 71 stadiums at block level with full- future of winners while allowing India’ initiative with an aim to enable time coaches, managed by district them to focus on their respective young boys and girls to realise their authorities, school management games. athletic potential and subsequently and parents hone their skills by providing support. • Sports complex in every district • Coaches and their places of origin: The State Government rewards Under this initiative, a Sports and • A sports library and a centre for the villages of medal-winning Physical Aptitude Test (SPAT) is conducting research in sports sportspersons. For example, the conducted in all schools across medicine the state to identify high potential panchayat of a village of a gold • Centres of Excellence for individual medal winner, in an international athletes in the 8–14 age group. About sports such as academies for 5,000 children — with boys and girls event, gets INR 2 lakh for the boxing in Bhiwani and wrestling in overall development of the village. in equal numbers — are identified, Rohtak and Sonepat and a sport ia allocated to them This encourages villagers to based on seven physical parameters promote a healthy sporting culture 3. Incentives: The Government such as strength, flexibility and the in their respective villages. provides several incentives to reaction time of various body parts.

12. Haryana Review, June 2013, Volume 27, Issue 6 Business of Sports 10

Case Study: Manipur

The Manipur Government’s policy of cent of the total budget) as compared in turn, became a driving force for 2004 recommends sport and recreation to prominent sporting states such as the development of many indigenous to be made a mass movement by Haryana (~0.27 per cent of the total sports. Some of them include Thang Ta making it a way of life. It states that budget) and Punjab (~ 0.36 per cent of and Sarit Sarak (Manipuri martial arts), sport and physical education be the total budget)13. Khong Kangjei (Manipuri hockey), Yubi made compulsory in all educational Lakpi (Manipuri rugby), Hiyang Tanaba Manipur also has the highest number institutions. Moreover, the policy states (boat race), Mukna (Manipuri wrestling), of national games medals in 2011 per that adequate sports facilities should Sagol Kangjei (polo) and Kang.14 capita and this could be attributed to be made available at every educational the presence of a sporting culture SAI established its North-eastern institution and the master plans of all in the state. Historically, Manipur centre at Imphal in Manipur in 1986. civic and municipal areas should make consisted of small kingdoms in The presence of this facility may have a provision for common playgrounds. constant competition with each other also contributed to the state’s sporting Moreover, the Manipur Government and every Manipuri was a warrior who success. allocates high per centage of its budget had to serve his kingdom. This gave toward sports and games (~1.03 per rise to a strong martial tradition, which,

1.3 Strategy for India@75 Vision

While the Sports Development Bill of resources and only a few champions few sports in which it has succeeded in 2013 recognises 66 sports - and many cannot afford to focus on all sports. the past and use its resources on these more sports are played across India - a Therefore, to achieve its targets, it is sports in the medium term. developing nation with limited number imperative for the country to identify a

Figure 1.7: Cumulative medal tally of India in Olympics 2012, CWG 2010 and Asian Games 2010

Source: www.olympics.org accessed on 15 January 2014, http://www.thecgf.com/countries/intro.asp?loc=IND accessed on 15 January 2014, http://www.ocasia.org/Game/GameParticular.aspx?VKZk7uGbk/BXhtRtiudAsw== accessed on 15 January, 2014

Figure 1.7 represents India’s achievement 2008 and 2012, may be attributed to in the past few major international the contribution of athletics events at sporting events. As it is evident, the the Commonwealth Games and Asian country has won the maximum number Games. India usually performs well in of medals in shooting, followed by athletics at these events due to the non- athletics, wrestling, boxing, archery participation of some of the top sporting 13. http://manipur.gov.in/?cat=11 accessed 15 January 2014, KPMG and tennis. The high tally in athletics, nations such as the US, France, Germany, Analysis 14. http://manipur.nic.in/indgames.htm, accessed 15 January 2014 despite India’s dismal performance in People’s Republic of China and Ethiopia. these sports at the Olympic Games of 11 Business of Sports

India’s last two Olympic performances While India has proved itself in shooting, and Figure 1.7 demonstrate that the wrestling and boxing, it is important to country’s strength areas primarily reflect upon the medal-winning potential include shooting, wrestling and boxing. of these sports at the Olympic Games. This is followed by archery and tennis. Assuming that an event can generate one Considering the recent performance of medal per country, it is estimated that the country’s shuttlers at international shooting, wrestling and boxing together tournaments, badminton appears to be a account for 46 medals (Refer Figure1.8). promising sport for India as well. Adding sports like weightlifting, archery, badminton and tennis, India’s total medal-winning potential translates into 77 medals.

Figure 1.8: Total events at the Olympic Games for select sports

Source: www.olympic.org accessed on 15 January 2014 Note: Aquatics includes Swimming, Diving, Synchronised Swimming and Water Polo

Some of the leading sporting nations (refer Figure 1.9). Similarly, Britain won a of the world also won a significant majority of its medals in cycling, rowing number of medals in just a few sports - and athletics (refer Figure 1.9). Though as indicated by an analysis of their China seems to perform well in almost performance at Olympics 2012. More every sport, it wins most of its medals than half of U.S.’s 104 medals were won in aquatics, badminton, gymnastics, in aquatics and athletics, which have shooting and weightlifting. the highest medal-winning potential Business of Sports 12

Figure 1.9: Performance of the U.S., China and Great Britain at the London Olympics 2012

Source: www.olympic.org accessed on 15 January, 2014

For India to achieve its sports objectives, Figure 1.10: Focus areas for Olympics and to be considered one of the leading sporting nations, it needs to build further upon its strength areas as well as work towards creating a talent pool in medal-intensive sports such as aquatics, athletics, cycling, gymnastics and weightlifting.

Source: Industry Discussions, KPMG Analysis 13 Business of Sports

2. Sports ecosystem Business of Sports 14

A comprehensive sports ecosystem Some of the key identified segments ideally includes various dimensions of the sports ecosystem are sports or segments that go into establishing governance; talent scouting and training and developing a sport, and various players and trainers; sports infrastructure, stakeholders in all these segments. The sports equipment (industry); evolution of a sports ecosystem may be sporting leagues and tournaments; evaluated by the extent of interaction and and performance incentives for awareness among stakeholders within sportspersons. and across various segments. Increased These segments and key stakeholders in transparency and professionalism in the the respective segments are identified system, coupled with growing awareness and represented below: amongst all stakeholders, can result in the creation of a better evolved sports ecosystem of a country.

Figure 2.1 Sports ecosystem-Its segments and key stakeholders

Source: Olympic.org, World Bank, KPMG in India analysis

The following sections provide an overview of certain important segments of the sports ecosystem, public and private initiatives and major challenges that hinder the growth of sports in India. 15 Business of Sports

2.1 Sports governance in India

The sports governance structure in India of Sports Patiala and the Laxmibai and providing Indian sportspersons with is well-defined. Broadly, it comprises of National Institute of Physical Education, an adequate platform to showcase their the Government and autonomous bodies Thiruvananthapuram.1 talents. established in compliance with the Government bodies under MYAS are IOA is the apex sports governing body Olympic charter. responsible for providing financial in India for Olympics sports and the The Ministry of Youth Affairs and Sports assistance, training and infrastructure NSFs and SOAs report to it. It acts as (MYAS), under the Government of support to autonomous bodies such as a link between the Government, NSFs India, is responsible for administering the Indian Olympic Association (IOA), and SOAs for various sports, and is also the Department of Sports. The Sports various national sports federations (NSF) responsible for the promotion of the Authority of India (SAI) is the field arm (recognised by IOA and their respective Olympic spirit for various sports2. Various of MYAS in the promotion of sports in International Federations as per the sports associations at the state level are India through the implementation of Olympic charter), sports federations that in turn affiliated to their respective SOAs various schemes such as the National operate under the aegis of recognised and NSFs. A similar structure is in place Sports Talent Contest Scheme (NSTC), NSFs and various State Olympic for non-Olympic sports as well, except for SAI Training Centres Scheme (STC) and Associations (SOA). In return of the the fact that respective NSFs are not part Centres of Excellence (COX) scheme. investment made by Government bodies, of IOA. A broad governance structure is SAI also operates several regional NSFs, SOAs and IOA are responsible depicted in Figure 2.2. centres and sports institutes such as for organising sports competitions, the Netaji Subhash National Institute holding international sporting events

Figure 2.2: Governance structure for sports in India

Source: “Comprehensive Sports Policy 2007”, Ministry of Youth Affairs and Sports, 2007; KPMG Analysis

1. Government of India, http://www.sportsauthorityofindia.nic.in, accessed 15 January 2014 2. Indian Olympic Association, http://www.olympic.ind.in, accessed 15 January 2014 Business of Sports 16

Key issues Despite a strong governance structure, parties. The suspension of the Indian there are certain issues that hinder Hockey Federation (IHF) on account of effective sports governance in India: poor team performance and corruption charges by the IOA in 2008 and the • There have been several incidents subsequent establishment of Hockey of noncompliance by some national India (HI) as the national federation for sports federations and the IOA with hockey in India is still a matter under the International Olympic Committee sub judice4. Several hockey players (IOC) Charter, which is essential to have found it difficult to select their guarantee Indian representation priorities with the IHF organising the at international sporting events. lucrative event. In December 2012, the OA was In fact, the Indian hockey team’s suspended by the IOC for its failure performance has degraded over the to amend its constitution to bar years with India coming in last at the officials accused in some cases from 2012 London Olympics. Similarly, contesting the IOA elections3. The gymnastics5, a medal-intensive IOA and several NSFs also have been sport, did not have a national sports found defying IOC guidelines on age federation as of June 2013, with two and tenure parameters and are said parties battling it out for affiliation as to have a non-transparent election the ultimate governing body for the process. sport. This administrative in-fighting • Another major problem witnessed by is believed to have affected players’ Indian sports is the tussle amongst training sessions. federations for recognition to be the To resolve issues hampering effective representative governing body. This sports governance, the Government has has an adverse effect on players’ recognised the need for putting forward a morale, as they find themselves in the Sports Bill. middle of the mud-slinging by warring

Figure 2.3: Salient features of the Draft Sports Development Bill 2013

• Impose duties on the National Olympic Committee (NOC) to function as a public authority under the RTI and submit reports to the Parliament Professionalism • Establish a Sports Election Commission to conduct free and fair elections to NOC, NSFs and the Athletes Commission

• Introduce an Appellate Sports Tribunal with a selection committee consisting of the Chief Justice of India, Secretary of the Department of Sports and President of the NOC to resolve NSF/NOC disputes • Bar charge-framed individuals to contest NOC/NSF elections and bar individuals from holding the post of office bearers of two NSFs simultaneously • Establish an Athletes Commission within six months in each NOC/NSF Transparency • Fix the retirement age at 70 years and tenure limits in compliance with the IOC Charter on the office bearers of each NSF/NOC, besides a directive for the inclusion of at least 25 per cent athletes in the executive body and the involvement of the athletes (nominated by the Athletes Commission) in the decision-making process of the executive body of NSFs. The addition of a lower limit on the per centage of athletes in the executive body goes a step further than the IOC’s efforts in ensuring athlete 3. TNN, “IOA-IOC impasse worries sports ministry”, , 29 October, 2013 participation in the IOA 4. TNN, “Gill sacked, IHF dissolved”, The Economic Times, 29 April 2008 5. “A SAI-JSW Group initiative”, , 4 June 2013 Source: http://pib.nic.in/newsite/erelease.aspx?relid=97118, KPMG Analysis 17 Business of Sports

Australia is one of the leading Case study: Sports governance structure in Australia sporting nations, as it is evident The Australian Sports Commission participate and excel in sports. Its from its performance at international (ASC) is a statutory authority within corporate structure was reorganised sporting events. Part of its success the Australian Government’s Regional in 2011 to fulfil duties required of it by can be attributed to the country’s Australia, Local Government, Art the Australian Government and the professional sports governance set up and Sport portfolio6. ASC’s mission Australian Sports Sector. that emphasises on separate teams is to encourage more Australians to to maintain corporate relations and to encourage community-level engagement in sports. This supports the overall Figure 2.4 Australian Sports Commission Corporate Structure functioning of various sports federations and associations.

Source: http://www.ausport.gov.au/about/structure accessed on 15 January, 2014

• Australian Institute of Sport: It is building the capability and capacity responsible for athlete preparation in of NSOs and in developing terms of coaches, sports science and comprehensive participation plans. medicine, programme management, It is also responsible for developing competition opportunities and community sport through after- providing the overall strategic school community programmes. direction for high performance sports • Corporate Operations: It provides in Australia. business capabilities and services to • Participation and Sustainable support the ASC in delivering on its Sports: It supports the national strategic plan. 6. “What is the ASC”, Australian Government, http://www.ausport.gov.au/ sports organisations (NSO) in about/what_is_the_asc, accessed 15 January 2014 Business of Sports 18

The U.K. sports governance also lays Case study: Sports governance in the United Kingdom special emphasis on community sports In the U.K., the Department for Culture, bids to host major sports events (Gold development. This is overseen by the Media and Sports (DCMS) is the apex Event Series programme). U.K. Sports Council’s four national sporting body in the U.K. and it is organisations, which also showcases Community sports are managed headed by the minister for sport and an innovative way of funding sports through UKS’s four national tourism. The U.K. Sports Council (UKS), development at the grassroot level organisations: these are Sport which falls under DCMS, is responsible through sports federations. England, Sport Scotland, Sport Wales for investing public funds in Olympic and Sport Northern Ireland. Apart and Paralympic sports, as well as in Figure 2.4 Australian Sports Commission Corporate Structure from UKS, they are also connected community sports through its affiliates. to their respective home country Majority of funds distributed by the Governments (Scotland, Wales and UKS come from the National Lottery Northern Ireland). These bodies are and the Exchequer (the Ministry of responsible for promoting community Finance in the U.K.). UKS primarily sport and talent development. Their concentrates on high level performance main task is to encourage overall sports. It assesses the chances of participation in sport, but they are also winning medals in each Olympic sport responsible for increasing the quantity and distributes funds accordingly. This and improving the quality of community ‘no compromise’ policy aims to utilise sports facilities. A fundamental aspect public money only on those sports in of the work carried out by them is which the chances of winning medals the investment of National Lottery are high (i.e. the so-called World Class funds into sport federations; through Performance Programme). It should also this channel they support elite and be noted that football, tennis and horse grassroots sports alike. However, racing do not receive any public funding. Olympics-related elite sports funding UKS also manages and finances British remains the sole responsibility of the UKS. 19 Business of Sports

2.2 Talent scouting and training of players and trainers

A big, developing country such as India billion-strong people is yet to produce requires a strong talent scouting and a significant number of medal winners. training system for tapping and honing This highlights the need for casting a potential sporting talent. The Government wider net of talent scouting and providing and private sector have taken several quality training inorder to identify and initiatives, but a country with a 1.2 train more achievers.

2.2.1 Overview of initiatives in talent scouting and training

Role of governing bodies While the central and state Governments the micro level. It has instituted several organise competitions at different levels schemes for sports promotion and where talent scouts from respective building the next generation of achievers organisations search for sporting talent, (refer Table 4: Features of SAI schemes). SAI is responsible for talent spotting at

Table 4: Features of SAI schemes

• National Sports Talent Contest (NSTC), Army Boys Sports Company (ABSC), SAI Training Centres (STC), Special Area Schemes Games (SAG), extension centres of STC/SAG and Centre of Excellence(COX).

Age group • 8–25 years.

• Adoption of schools and universities that have quality sports infrastructure and are provided with funds for sports kits, a SAI trainer/coach and exposure to competition Provisions • In many of these schemes, SAI trainees are also provided with stipend, medical insurance, sports equipment and boarding/ lodging as per the norms.

• Trainees are usually selected through competitions where an eminent selection committee consisting of SAI coaches and Selection sports scientists spot talent for the respective scheme procedure of trainees • National/state level winners are automatically admitted to these schemes while district-level achievers are admitted after passing some tests.

• A wide range of sports are covered such as athletics, badminton, Sports basketball, hockey, gymnastics, swimming, wrestling and table covered tennis.

Source: “Annual Report 2012-13”, Ministry of Youth Affairs and Sports-Government of India, 2013 Business of Sports 20

Following are some more schemes and • Attempts to prepare sportspersons/ responsibilities that the SAI undertakes: national teams for various international sporting events at regional/sub- • Come and play scheme - The scheme regional training centres in consultation is for the 8–17 year category and aims with the respective national sports at systematic talent spotting by the federations. coaches, at all SAI training centres and stadia, by allowing young sports • The Government also provides enthusiasts to get coached at a cost of funds for holding rural competitions INR45 per month. under the PYKKA scheme, where ~22 per cent of the total INR872 crore allocated to the PYKKA from 2008 to 2012 to achieve successful organization of competitions7.

Role of the private sector — private academies Several sportspersons from various able to produce some impressive results, disciplines such as cricket, tennis, such as: badminton and football have established • Tintu Luka who won a bronze medal at academies to train upcoming players. the Asian Games 2010 is a product of Some of these academies are Britannia the Usha School of Athletics Amritraj Academy, Bhupathi Tennis Academy, Gopichand Badminton • Tennis players and Rohit Academy (GBA), Rajpal have trained at the Britannia Badminton Academy (PPBA) and Amritraj Academy Baichung Bhutia Football Schools (BBFS). • Saina Nehwal trained at GBA. These academies are mostly managed Though these academies play an by players who have been successful at important role in nurturing sporting the international level. Such academies talent in the country, some of them have serve as important avenues for players to already delivered results and, many of transmit their knowledge to — and share them are yet to become sustainable, their experience with — budding players. which is critical for their progress. A 7. “Annual Report 2012-13”, Ministry of Youth Affairs and Sports- These experienced sportsmen also review of successful academies globally Government of India, 2013 understand the lacunae in the system. can help provide insights into the As a result, these academies have been economics of running profitable training ventures. 21 Business of Sports

Moreover, successful collaboration on financial and operational Case study: Manchester United Academy, U.K. fronts between a club and the public makes the AFC Ajax Youth The Manchester United Football Academy is an example Academy in an interesting study. of a successful private sports academy and its study can provide information on owning and running private Case study: AFC , Amsterdam, The academies. A vast majority of successful private football academies are owned by prominent first or second division football clubs. AFC Ajax’s Youth Academy is acknowledged as one of Manchester United has a youth team development the most advanced football youth academies in Europe, programme. According to a research by Sporting consisting of 13 teams and 200 youth players between Intelligence, Manchester United is ranked fifth in the world the age of 7 and 19 years. The academy has made special with 24 Manchester United Academy graduates playing in agreements with over 80 private and municipality schools the Big Five leagues — England, France, Germany, Italy and in the greater Amsterdam area from where students are Spain. gathered by academy workers every day and sent to the youth centre. In addition, the Ajax youth centre supports Based on their historic performance, the Manchester their studies by giving complementary lessons and United youth team is the most successful team in English homework, emphasising on the importance of education, football. along with daily sport training. The Manchester United Academy was established in 1998 and the overall development cost of the complex was Numerous players who attended the youth academy of approximately £8 million. It is located on a 70-acre site in AFC Ajax went on to play in their respective national teams Carrington, which is shared with the first team. In 2002, and became famous; it has been estimated that over 80 per the complex was further expanded during the £8 million cent of the academy’s young players become professional club-financed development of the Academy Building, which football players. Graduates of the academy include Johan serves as the home for Manchester United’s youth teams. Cruijff, , and Wesley The training complex comprises of 14 pitches and medical Sneijder. To achieve superior results, the academy employs and conferencing facilities. Since the opening of the facility, 70 scouts and numerous sport scientists. there have been several minor renovations. The academy’s training centre (De Toekomst in Dutch or Manchester United has built various revenue streams such The Future in English) was established in 1996 and includes as: nine football fields spread over 14 hectares. The main field • Revenue from sale of players: Over the years, of the centre is the , which is the Manchester United has managed to generate revenue stadium of the AFC Ajax Youth Academy, with a capacity of by selling players who graduated from the youth 5,000 seats. This is exclusively reserved for players in the academy. In 2003, David Beckham became the most top training squad and serves as a goal for all attendees. expensive home-grown player when he was sold to Sportpark De Toekomst is jointly owned by Stadion Real Madrid for £24.5 million. Amsterdam N.V., a public-private holding company, and the • Academy naming rights: To further capitalise on the Government of Amsterdam. brand and reputation of the club, Manchester United, in April 2013, agreed on an eight-year naming rights Source: KPMG Analysis agreement with Aon that resulted in the Trafford Training Centre being renamed to Aon Training Complex. The deal has been estimated to be worth around £120 million (£15 million a year). As part of the deal, Aon will advice Manchester United on talent development, risk management, as well as on health and wellness solutions.

Source: KPMG Analysis Business of Sports 22

Role of the private sector — CSR initiatives Non-profit organisations such as the Academy and TATA Football Academy. It Olympic Gold Quest (OGQ) and the Mittal also sponsors PPBA. Some encouraging Champions Trust (MCT) (a CSR initiative results of TATA’s CSR initiatives are: by the Mittal group) have shown the way • , a student of to other corporate players in supporting PPBA, won gold and silver medals in training requirements of athletes and doubles and mixed badminton events, extending financial support to upcoming respectively, at the CWG 2010.11 athletes by raising funds from companies and individuals8. Following are some • Sixty per cent of the national football results of such initiatives: team players are cadets from the TATA Football Academy12 • MCT-backed shooter Abhinav Bindra became the first Indian to win an • , a cadet of the TATA Olympic gold medal in an individual Archery Academy, won a gold medal in event8. one individual and one team event at the Commonwealth Games 2010 and • MCT assisted wrestler Yogeshwar Dutt a bronze medal at the Asian Games in overcoming injuries. He went on to 2010. She is currently ranked World win the bronze medal at the London no 2. Olympics 20129. Similarly, the Jindal Steel Works (JSW) • OGQ identified coach Briton Charles foundation (Jindal group) has established Atkinson for Mary Kom’s training the second-largest squash academy13 when the Olympic 2012 organisers in India at Vasind, Maharashtra, which discontinued the usual weight has produced many international- and category she contested in. With joint national-level players. Other examples efforts from the Government and of corporate efforts in improving training 8. Sanjiv Shankaran, Goutam Das and Anilesh Mahajan, “Going for gold”, OGQ, she won an Olympic bronze and talent spotting include industrialist KK Business Today, 13 May 2012 medal8. 9. “Yogeshwar Dutt is a content man”, The Hindu, 15 August 2012 Birla’s patronage8 of the 10. “Corporate Social Responsibility: A Case Study of TATA Group”, IOSR Journal of Business and Management, 2012, Volume 3, Issue 5, PP Moreover, corporate houses such as Akhara in Delhi, Punj Llyod’s investment 17-27 TATA have invested extensively in sports of INR30 million toward promoting 11. Prakash Padukone Badminton Academy, www.ppba.in, accessed 15 10 January 2014 as part of their CSR programme . The squash and providing training to talented 12. IMG, http://img.com/services/strategic-initiatives/india---img-reliance. TATA group conducts a nationwide talent children, the IMG-Reliance partnership aspx, accessed 15 January 2014 13 13. JSW, http://rosoftlimited.com/dev1/jsw/Foundation/sports.html, search and selects players for further with All India Football Federation (AIFF) accessed 15 January 2014 training at its various academies like to overhaul football at the grassroots and TATA Archery Academy, TATA Athletics professional level. 23 Business of Sports

Key issues

• Limited reach of talent scout efforts: • Challenges faced by private players compounded by a requirement for Despite the Government’s efforts in while establishing academies varies high capital expenditure scouting for talent at the grassroot with the sport. However, some issues –– CSR initiatives in India have largely level, there were only 14,90014 SAI common to all sports include: been restricted to supporting trainees in 2012. It is estimated –– Lack of sporting culture and established athletes, resulting in a that India’s population in the 8–25 awareness on its importance smaller talent pool. year group (the age group that SAI schemes cover) is ~43 crore, which –– Difficulty in sourcing funds since indicates that only ~ 0.0035 per cent sport has not yet been awarded an of India’s youth in this age group is industry status and is considered a being trained under these schemes15. risky business This per centage appears low in –– Lack of coaches and technical comparison to that of countries such know-how of sports in India as Cuba (17 per cent)16. Therefore, –– Scarcity of adequate spaces for there is a need for more initiatives providing training in sports such as and increased involvement of players football, athletics and tennis to develop a system that casts a –– The problem of inaccessibility for wider net of talent identification and private players to public stadia grooming. and training infrastructure gets

2.2.2 Role of Stakeholders in training the trainers

Trainers and coaches are mostlty • Coaches should be able to recognise responsible for nurturing talent. Sports and assess the scale of injuries of trainers include sports coaches, their athletes and plan their training physical education and fitness trainers, programmes for recovery in a physiotherapists, masseurs, nutritionists, scientific manner mental condition coaches and • Moreover, coaches play an important psychologists. role in guiding athletes on using the It is important to create a pool of qualified equipment safely and in employing sports trainers and ensure that they appropriate playing techniques that get training. According to survey of can prevent injuries. They also help U.S. Olympians from 1984 to 199817, sportspersons upgrade/modify approximately 49 per cent Olympians their playing style to suit different believed that being coached by qualified tournaments and varied playing trainers played an important role in their conditions and multiple forms/ success. It is essential to train coaches categories of the same game because: The estimated demand for sports and • Coaches should be up-to-date with fitness coaches for India in 2012–13 is 14. Sourjya Bhowmick, “What does it cost to win an Olympic medal”, www. indiaspend.in, 9 August 2012 the latest training methods and 1,34,188, while the demand for support 15. Census India, accessed 15 January 2014 techniques, to provide quality training personnel in terms of track and field 16. “Comprehensive Sports Policy 2007”, Ministry of Youth Affairs and Sports, 2007 to their pupils, which would keep them experts, nutritionists, psychologists and 1 7. “The Value of Quality Trained Sports Coaches”, Institute for Sports globally competitive sports medicine experts is 1,96,13118. Coaching, accessed 15 January 2014 18. “Skill Gap Study for Sports”, NSDC, 2012 The annual demand (required number of coaches in a year) is 39,697 in terms of the Government’s vision for the next decade18. Business of Sports 24

Role of the Government in training trainers/coaches

• SAI’s National Coaching Scheme: is to build two lakh community NS Southern Centre and This scheme deploys coaches for coaches and 600 state officials as NS Eastern Centre . LNUPE, various operational schemes of the master trainers, in 10 years, across Gwalior, is another major government SAI to state Governments/UTs, for the country. Until now, 2,126 officials institute that offers sports courses. conducting bachelors/masters degree have been trained to become master These institutes offer diplomas, M.Sc. diploma courses in various sports trainers under this scheme, and these degree and certificate courses in disciplines and for coaching/training master trainers are expected to train sports coaching, refresher courses in at the Navodayas, Kendriya Vidyalayas 20,000 Kridashrees a year in states/ coaching and bachelors, masters and and various other universities. The UTs. PhD degrees in physical education. total sanctioned strength under this • Government sports institutes: Total • A dearth of educational courses in scheme is about 1,524 coaches19. students enrolled in sports courses sports sciences has made MYAS • PYKKA scheme by the MYAS for at various government institutes for establish the National Institute of building capability of Kridashrees 2012 is 2,106 students. The institutes Sports Science and Medicine (NISSM) and Master Trainers19: A Kridashree is managed by SAI include the Netaji on priority in the Twelfth Five-Year a community coach who serves as a Subhash National Institute of Sports, Plan, in line with similar facilities in sports trainer for the rural community Patiala, and the Lakshmibai National advanced countries to support the and a master trainer imparts coaching College of Physical Education (LNCPE) development of high performance skills. The aim of the PYKKA scheme Thiruvananthapuram, along with sports.

Role of private bodies in training trainers

• The Amity School for Physical coaching scheme by SAI. There are Education and Sports and the Bharati only 1,109 coaches out of the total Vidyapeeth University offer courses sanctioned strength of 1,524 — in sports management, physical resulting in 415 vacancies across education, nutrition, sports science 19 sports disciplines. Women and coaching. coaches constitute less than 16 per cent of the total strength of Key issues coaches19. • Some issues identified in the –– Although, the PYKKA scheme ecosystem for training the trainers by MYAS for building capability include: of Kridashrees and Master –– Lack of awareness on Trainers aims to produce 20,000 opportunities regarding sports Kridashrees every year. However, coaching courses. When the scheme has been able to estimating the strength of produce only about 28,500 students enrolled for sports Kridashrees since its inception in courses in public and private 2008 20. universities, India gets about 5,000 –– Moreover, SAI organised a coaches annually from accredited refresher course in 2012 and institutions — this falls short of the received only 92 applicants. Out annual demand of approximately of the 48 selected, only 36 from 37,000 coaches18. Despite efforts just five Indian states attended the by the Government, the uptake of course19. sports courses appears low. This may be due to lack of awareness • There ia dearth of specialised courses on various schemes, courses and in sports physiotherapy, nutrition and demand for sports coaching. psychology. Though they play a critical role in facilitating holistic training –– The point above is further and development of athletes, sports highlighted by the fact that MYAS medicine and sports sciences are not reported shortage in the number evolved enough in India. of coaches under the national

19. “Annual Report 2012-13”, Ministry of Youth Affairs and Sports- Government of India, 2013 20. “Annual Report 2012-13”, Ministry of Youth Affairs and Sports- Government of India, 2013 25 Business of Sports

Case study: Emphasis on sports-related courses in the U.K. universities

More than 60 universities in the U.K. of human biology, psychology, sports offer courses in sport science. The and exercise science, and sports independent guidance and support management. There are currently organisation SI-U.K. Education Council 1,100 undergraduate students, 180 states that sports science is constantly postgraduate students and 140 research developing and many major U.K. students at Loughborough. universities and colleges offer several With continuous investment in courses in this field. buildings, teaching resources, Besides sports sciences, several laboratories, equipment and access universities in the country also offer to quality exercise facilities (e.g. the sports-related business studies. Based newly established £10 million-worth on the ranking of the worldwide pioneering sports and exercise best business school, published medicine centre), the university, its by Eduniversal in 2012, four of the School of Sport and exercise and health best 50 universities providing sports sciences department are considered to management studies — Coventry be one of the best equipped institutions University, De Montfort University, providing a complete range of studying Loughborough University and Sheffield opportunities related to sports. Hallam University — were based in the It should also be noted that the U.K. majority of universities in the U.K. are One of the renowned sport universities funded by public sources (the tuition in Europe — Loughborough University fee paid by students constitute only a in Leicestershire — offers a wide range small per centage of their financing). of sports-related studies in the field

Source: KPMG Analysis Business of Sports 26

2.3 Sports infrastructure

In the context of this report, sports infrastructure includes sports stadia and fields. It is important to assess the role of various stakeholders in providing the requisite infrastructure for the development of sports in India.

Role of the Government Besides building training centres and a young population to pursue sports It is important that legacy planning academies, the Central Government and professionally would be the lasting legacy is done in advance while hosting SAI also builds and maintains stadia and of hosting the CWG 201022. Some of the international games, to monetise assets fields. As part of the Asian Games 1982 key benefits of building such assets are: for the following reasons: and the CWG 2010, India constructed • Upgraded facilities can be used by •• The large investment in infrastructure/ several stadia, facilities or infrastructure national sports organisations for high- stadia development and renovation developed for hosting international performance training. is difficult to recover during the short games that would not only serve as a period of the games legacy for the host country’s citizens • Assets built in universities can be but would also provide opportunities for used after the events by students •• To generate revenue after the sporting urban development21. and local community members, events for positive economic impact, thereby enhancing community sports as part of building a legacy of hosting The creation of legacy assets is usually participation. It generates demand for games and to develop sports and in line with the long-term sports and an employee base trained in technical, surrounding communities. development strategy of the host nation/ managerial and other games-related city. The Indian Government believed that India’s legacy planning for CWG 2010 aspects. building quality athletics infrastructure, assets was limited and, therefore, it showcasing India’s excellence in • It facilitates restoration of surrounding has not been able to generate sufficient international-level non-cricketing lands and promotes green urban income so far. (Refer Table 5) competitions and motivating development.

Table 5: Stadia managed by SAI on behalf of MYAS

Cost of establishment/up- Stadium name Means of revenue generation grading during CWG 2010

• ‘Come and Play’ Scheme Jawaharlal Nehru • Rented out to India’s national INR961 crore23 Stadium football team • Concerts

Indira Gandhi INR240 crore24 • ‘Come and Play’ Scheme Stadium

Dr. SPM Swimming INR377 crore25 • ‘Come and Play’ Scheme Pool Complex

21. “Factsheet Legacies of the Games”, International Olympic Committee,http://www.olympic.org/Documents/Reference_ Dr. Karni Singh 26 documents_Factsheets/Legacy.pdf, accessed 15 January 2014 INR150 crore • ‘Come and Play’ Scheme 22. The Delhi XIX Commonwealth Games website, http://d2010.thecgf. Shooting Range com/come_out_and_play, accessed 15 January 2014 23. Owen Benett, “Is this the future for the Olympic Park?: Decaying • ‘Come and Play’ Scheme stadium three years after Games”, Express (U.K.), 15 July 2013 Major Dhyan 24. Ravi Kumar Diwaker, “Delhi gets a modern and green IG stadium”, India 25 • Rented out to India’s national Today, 11 April 2010 Chand National INR262 crore 25. Bhavna Vij-Aurora, “The Con Games”, India Today, 24 July 2010 Stadium hockey team, Delhi Wizards and 26. Mohammad Amin-ul Islam, TNN, “Revamped Dr Karni Singh shooting Delhi Wave-riders range ready for action”, Times of India, 1 Feb 2010 27 Business of Sports

Case study: The City of Manchester Stadium

The City of Manchester Stadium can The rent paid to the council comes from provide valuable insights into profitable match day revenue, especially ticket monetisation models for private sales. However, no amount was due companies. if the attendance did not exceed the 32,000 capacity of the City’s previous It was built to serve as the main stadium (Maine Road), while half of the athletics stadium for the 2002 ticket revenues above that level was Commonwealth Games, hosted by paid to the owner. This resulted in an Manchester. The development cost of annual average rental fee of £2 million the stadium was £110 million, which between 2003 and 2011. was financed by public funds: £77 million was covered by lottery grants In 2011, Manchester City FC agreed to while £33 million was paid by the sell the naming rights of the stadium to Council of Manchester. Etihad for £350 million to be paid in 10 years. At the same time, the rent paid After the event — to avoid the stadium to the council was raised by £2 million from becoming a white elephant — the and, therefore, since 2011 the club pays municipality reached an agreement an annual average rent of £4 million for with Manchester City FC to convert using the Etihad Stadium. As a result, the venue into a football stadium the club earns a net fee of £33 million (the agreement included leasing from the naming rights deal, though it the stadium to the football club at does not own the stadium. favourable rates). The football club paid the redevelopment cost of £20 million and the stadium reopened as a football stadium in August 2003.

Source: KPMG Analysis Following are some schemes instituted to play sports by building more playing by the Government for infrastructure fields and spaces in the country. MYAS development: has instructed state Governments to establish playing fields associations • Scheme of assistance to Urban at the state level as well, so that it can Sports Infrastructure Development: sanction funds to these states for the To improve the entire sports development of playing grounds and ecosystem, the scheme of assistance parks. to Urban Sports Infrastructure Development was introduced in • PYKKA scheme: Established in 2010–11 to develop infrastructure 2008–09, the scheme aims to develop such as synthetic playing surfaces sports infrastructure at the grass root and to address other important issues level throughout India by providing such as player and coach training and assistance to its network of village development. The scheme provides panchayats and blocks panchayats financial assistance to schools/ in 10 years. It is estimated that the colleges/universities/academies scheme has covered only 22 per cent for developing sports infrastructure, of village panchayats in India in five which can potentially operate as years since its inception. SAI’s extension centres. The National The PYKKA scheme, instituted by the Playing Fields Association of India MYAS, requires state Governments and the state-level playing fields to establish a PYKKA cell under their association get assistance under this respective Governments’ Department scheme. of Sports to receive requisite financial • National Playing Fields Association assistance from the Central Government. of India (NPFAI)27 : Through this Approximately 66 per cent of the scheme established in February 2009, panchayats approved under the PYKKA

27. “Annual Report 2012-13”, Ministry of Youth Affairs and Sports- MYAS aims to spread awareness on scheme have developed playfields in their Government of India, 2013 fitness and encourage Indian children respective areas.

© 2014 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. Business of Sports 28

Case study: Government initiatives to build sports infrastructure - financing stadiums in the U.S.

Financing the development of stadia for wider socio-economic reasons. can be challenging. Though funding Public participation in financing stadium varies in each case, it is usually developments includes various forms obtained from a combination of private of allowances (including tax allowances) and public sources, including equity and grants provided by Governments, (cash injections, assets such as land local municipalities and other public contribution, supply of equipments, bodies. Authorities can also contribute licenses and patents), debt and other to financing through the provision special arrangements. of land at favourable terms, building access roads and upgrading adjacent Public authorities usually choose to be public infrastructure. involved in the development of stadia

Alternative financing structures of stadium developments

The U.S. is certainly one of the countries New York, which is quoted as being that provide a wide range of tools for funded from private sources). On an public contribution. Out of the 20 stadia average, 56 per cent of the overall of National Football League (NFL) teams development cost of these stadia has launched in the last 15 years, 19 have been derived from public sources (refer received public support (with the only to the table below). exception of the MetLife Stadium in

© 2014 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. 29 Business of Sports

Funding NFL stadiums in the U.S.

Private Public Stadium Year opened funding (%) funding (%)

San Francisco 49ers (planned) 2015 88 12

MetLife Stadium 2010 100 -

Cowboys Stadium 2009 63 37

Lucas Oil Stadium 2008 14 86

University of Phoenix Stadium 2006 32 68

Lincoln Financial Field 2003 64 36

Soldier Field (renovation) 2003 34 66

Lambeau Field (renovation) 2003 43 57

Gillette Stadium 2002 83 17

Ford Field 2002 75 25

Reliant Stadium 2002 39 61

CenturyLink Field 2002 35 65

Heinz Field 2001 39 61

Sports Aut. Field at Mile High 2001 28 72

Paul Brown Stadium 2000 6 94

LP Field 1999 29 71

Cleveland Browns Stadium 1999 26 74

M&T Bank Stadium 1998 10 90

Raymond James Stadium 1998 - 100

FedEx Field 1997 72 28

Average 44 56

Source: CSL

Public funding for the developments revenues from public property sale, of these stadia involved a wide range direct grants, land contribution, tax of public contribution tools: different rebates, operating subsidies, interest- types of taxes (among others, city free loans, capital fund allocation, sales and county sales taxes, lodging infrastructure development and utility/ tax, excise tax, car rental tax, F&B tax, transit allocation. property tax, income tax, utility tax India can also explore similar methods and parking tax), lottery funds/gaming for financing sports infrastructure. tax revenues, public parking revenues,

Source: KPMG Analysis Business of Sports 30

Role of the corporate sector in infrastructure development

The involvement of companies in sports build the facility and hand it to the infrastructure development in the country authority. Some amount of this land is is mainly in the form of public-private earmarked for a residential complex, partnerships (PPP). Some examples which could cross-subsidise the sports of PPP for infrastructure development facilities. include: • Jindal Steel Works(JSW) has • The Naya Raipur Development collaborated with SAI as part of its Authority is building a sports city CSR initiative to oversee the upgrading in Naya Raipur, which would have and maintenance of infrastructure at facilities like tennis, aquatic and an SAI’s regional training centre in Hisar. indoor stadium along the PPP model28. The latter is expected to monitor the The private player is expected to training and selection of players.

Case study: Amsterdam Arena, Amsterdam, The Netherlands — successful PPP in building sports infrastructure

The Amsterdam Arena was opened in The city of Amsterdam identified 1996 and was one of the first multi-use the opportunity of supporting the stadiums in Europe, hosting concerts development of Ajax FC’s new stadium and other non-sport events, besides as a potential catalyst for city activities football (the venue is the home of AFC and urban commercial development Ajax) and other sports. The stadium around the stadium. The municipality has a retractable roof and a capacity also viewed the creation of new parking of 52,000. It has 83 executive suites, spaces as a beneficial development for 3,000 VIP seats and 2,500 indoor Amsterdam. Moreover, the city received parking spaces. the naming rights of the new stadium in exchange for financial support, and it The overall development cost of the was therefore named the Amsterdam stadium was around EUR127 million Arena. (EUR2,440 per seat).

The financing structure of the Amsterdam Arena development

Municipality of Amsterdam 26%

Government subsidy 4%

Equity financing (AFC Ajax) 7%

Debt financing (mortgage) 26%

Securitisation (seats and suites) 21%

Private sponsors 16%

TOTAL EUR127 million

Source: KPMG Analysis

Pure private initiatives in sports the primary source of ROI for stadium infrastructure development are less development, As further analysed in common globally. One such example section 2.6, thismay not be a feasible is that of Juventus, where substantial alternative in the current Indian scenario. ticketing revenue potential became

28. Anuja Jaiswal, TNN, “Rs 1,000cr townships to come up in Naya Raipur”, Times of India, 30 March 2013 31 Business of Sports

Case study: Juventus Stadium, Turin, Italy

Examples of corporate players owning The Sportfive agreement also highlights sports infrastructure in India and in the an interesting opportunity for stadium world are not common. financing. Football is a fluctuating business, as the on-field performance With a capacity of over 40,000, the of teams varies over the years. However, stadium has eight restaurants, 24 bars financiers need predictability in order and 459 press seats; it was inaugurated to opt for securitising future revenue in September 2011. generation for financing purposes. If In the summer of 2003, Juventus a football club is able to sign a long- bought the Delle Alpi Stadium from the term contract with an agent for selling Municipality of Turin for approximately premium seats, a significant per EUR25 million. In 2008, construction centage of demand risk gets transferred started on the new stadium, which to the agent, allowing the club to show is the first new stadium in Italy to be more security in their future revenues. privately owned by a football club. The The agent is able to spread the risk overall project cost was EUR120 million. of this multi-year contract across its portfolio of similar contracts with The financing of the new stadium other clubs; hence, it is able to better has a complex structure. About half manage the inherent risk in a team’s of the required funds were financed sports performance. For clubs with from two loan agreements. Additional a significant fan base, this financing financing was obtained from the sale of solution seems to be gaining popularity. a commercial centre to be developed in coordination with the stadium. Between 2008 and 2011, the annual Furthermore, Sportfive Italia S.r.l. signed average match day revenue of Juventus a long-term partnership with Juventus was EUR15.1 million. However, for the involving regular payments to the club first season played in the new Juventus in return for an exclusive right to sell the Stadium, the club managed to generate stadium naming rights and a proportion EUR31.8 million of match day revenue, of the premium seating capacity. This more than double of the average of solution exemplifies how financing the previous three seasons. Since can be linked to the future revenue the opening of the new stadium, its generating potential of a modern utilisation has been over 87 per cent in stadium. each season.

Source: KPMG Analysis Key Issues Some key issues identified in sports –– Some states do not yet have infrastructure development in the country PYKKA cells at state, district and include: block levels.

• Insufficient legacy planning: Lack of –– There is lack of involvement efficient and early legacy planning for and awareness among national various games hosted by the country sports federations and state result in limited monetisation of legacy sports associations regarding the assets. organisation of PYKKA games and the participation of state players in • Slow response of the State them. Government to various central schemes: –– .Though the Government had a vision of building infrastructure –– Many states have avoided under the PYKKA scheme schemes such as the National throughout the country in 10 Playing Fields Association of India - years, only ~22 per cent of the that demands states to establish panchayats have been covered in their respective playing fields the five years since its inception. association - and PYKKA where states like Punjab, Bihar, and Tamil • Limited PPP in sports infrastructure Nadu did not avail the full grant for development. procuring and maintaining playing fields. Business of Sports 32

2.4 Sports Equipment and Apparel

The sports equipment market broadly The sports equipment market in India for includes equipment for ball sports, the financial year 2013 is~INR 40 Billion29 adventure sports fitness equipment, golf with cricket equipment holding the equipment, racket sports, winter sports highest market share. and other sports like archery, billiards, etc.

Figure 2.5: Sport-wise market share

Source: “India Sports Equipment Industry Outlook to FY’2018, Ken Market Research, May 2013

Figure 2.5 highlights that the share of The Foreign Trade Policy (2009–2014) ii. Increased recognition of India as a popular sports like tennis, golf, boxing, has also qualified the sports goods base of high quality sports goods shooting, etc. in equipment market sector as the priority sector for market manufacturing and as a significant is low. Ideally, popularity of any sport development assistance and market market for sports goods. This is should result in higher consumption in access initiative. Further, benefits important for recognition of Indian the equipment market, which highlights under the Market Linked Focus brands by federations so that that the equipment of these sports may Product scheme and Export Promotion approved playing equipment is readily be expensive for Indian consumers. Capital Goods Scheme are also available in India and need not be Difficulty in accessing expensive available for sports goods under the sourced from abroad. equipment of these sports may be Foreign Trade Policy. Sports retail in India is growing resulting in low participation. • Many state Governments also rapidly with ~60% of the production30 Though India is one of the leading sports encourage sports manufacturing. consumed by the domestic market equipment exporters in Asia, it is limited For example, the Uttar Pradesh itself. This can further provide impetus to certain sports only. Inflatable balls and Government allotted land for sports to manufacturing of sports goods in cricket bats are the top export items. The goods manufacturing in Meerut. India. Retailing would go a long way in Government has taken some initiatives promoting technological advancement India has the advantage of low cost to boost manufacturing of sports goods / and increased product awareness skilled manpower for producing quality equipment in India such as: among both Indian manufacturers and products attracting foreign sports consumers which could in turn lead to • The Government of India allows equipment manufacturers. to source diversification in products demanded for, 100% FDI in the sports manufacturing products from India with many Indian and manufactured indigenously. sector in an effort to make India a hub companies operating as contract for manufacturing of sports goods, manufacturers for multiple brands. This since it is a labour-intensive industry has further led to: generating potential for employment. i. Technological advancement of Indian 29. “India Sports Equipment Industry Outlook to FY’2018”, Ken Market • The Government has created SEZs to manufacturers due to knowledge Research, May 2013 30. Sports Retailing in India: Opportunities, Constraints and Way Forward”, help manufacturers benefit from tax transfer from foreign retailers INDIAN COUNCIL FOR RESEARCH ON INTERNATIONAL ECONOMIC incentives on export incomes. RELATIONS, June 2010 33 Business of Sports

Key issues Some of the key issues in the context of cent. However, specified sport goods this report are highlighted below. imported are exempted31 from duty if imported by the specified Government •• Lack of equipment manufacture agencies for national/international for some sports: In India, equipment games and by eminent sportspersons produced for the domestic market is for training purposes with certificate predominantly for cricket, badminton, from the appropriate authority. Private hockey, etc. On the other hand, academies are not exempt from equipment for shooting and archery is import duties. Such inconsistent duty scarcely available in India. Moreover, structure is perhaps discouraging it is required that equipment used private players from formulating for national level and international training programs for sports such level games has to be from brands as archery and shooting which that are recognised by international suffer from a dearth of equipment federations. Accessibility to manufactured in India. inexpensive equipment is important for enhancing sports participation •• Restrictive policy on FDI in India: and ensuring quality training in line Most international sports retailers with requirements laid down by are multi-brand retailers. Though FDI international federation. For example, is not an entry ban due to presence in case of hockey, internationally light- of multiple other routes, restrictive A golf driver of a weight composite hockey sticks have policies, such as the above, make India particular make is priced replaced wooden sticks. However, rank quite low in terms of per centage lagging behind China in technology, of international retailers. FDI in multi- India does not have equivalent brand retailing could help both the ~37%-90% competence and China produces sports retail and manufacturing sector higher in India than in the lighter more durable composite (which could benefit from increased United States. hockey sticks. In fact, a significant sourcing) to grow in India. portion of fitness equipment is •• Lack of a unified representation for mostly sourced from China. Sourcing sports equipment industry: Sports increases the cost of the equipment. goods exports and sports apparel •• Difference in the import duty on exports are promoted by separate Government-sourced and privately- councils under the aegis of separate sourced training equipment: The ministries which is unique to India; duty charged on the import of goods as in most other countries sports such as sports footwear is ~ 28.85 exports are monitored by the same per cent (generic rate) while the duty organization/association. This often charged on the import of sport goods prevents holistic development of the and equipment such as golf clubs sports products sector. 31. http://www.cbec.gov.in/customs/cs-act/notifications/notfns-before2k/ and archery equipment is 21.47 per cs146-94.htm, accessed 15 January 2014 Business of Sports 34

2.5 Leagues and tournaments

Globally, the leagues system has served US alone is home to some of the biggest as an important way for companies leagues in the world such as the National to enter the sports sector. A sports Football League (NFL), Major League league creates several opportunities Basketball (MLB), National Basketball for private companies in domains such Association (NBA) and National Hockey as league management, franchisee, League (NHL), setting an example for broadcasting, advertising, infrastructure, ways of monetizing sports. player management, licensing and merchandising.

Figure 2.6: Revenue comparison of various international leagues (in billions of USD for 2012)

Source: Plunkett Research, Annual Report of BCCI

India’s most successful league in terms presence to places outside of its country of viewership and revenues has been of origin. IPL has become a highly the Indian Premier League (IPL), which profitable property for BCCI and it has is based on the English Premier League also been able to maintain high TV ratings (EPL) format. The league was launched (TVR) since its inception (refer Figure 2.7). in 2008 by the BCCI with eight city Figure 2.7: IPL profitability (INR crore) and TV ratings franchisees. Though it is still small in comparison to some of the biggest leagues of the world (refer Figure 2.6), it has been able to achieve success in a short span of time, which other mature leagues could not manage to do. The evolution of IPL as a brand is an example of successful product innovation, which effectively combined entertainment and sports. The Twenty20 (T20) format of IPL has made the sport more popular and convenient to watch for cricket enthusiasts. Moreover, IPL has not only brought male audiences to prime time TV viewership, but has also attracted female audiences and children. It has managed to attract a majority of the top players Source: Gaurav Laghate, “IPL’s TV ratings on sticky wicket but advertisers unfased”, Business Standard, 18 May in the sport and has also extended its 2013 35 Business of Sports

For any league, media rights, sponsorships and revenue from franchises constitute major sources of revenue (refer Figure 2.8). Figure 2.8: Major sources of revenues for a league

Revenue from Media Rights Sponsorships franchisees

TV broadcasting rights Title sponsors Franchisee fees

Ground sponsors Theatrical rights Umpire sponsors Share of gate revenues

Internet rights Official drinks sponsors

Share of local Marketing support Blimp sponsorship revenues

Source: KPMG in India Analysis

For IPL, the biggest source of revenue is media rights. In 2009, BCCI struck a nine-year- long broadcast deal for INR 8,200 crore32.

Figure 2.9: Break up of IPL revenue (2010–11)

32. “IPL signs 9-year broadcast deal with Sony for Rs. 8,200 cr”, The Economic Times, 15 March 2009

Source: BCCI Treasurer Report, 2010-11 Business of Sports 36

IPL’s success has inspired the creation yet to achieve the scale and profitability of of national and state level leagues in IPL, which is highlighted by the fact that other sports such as hockey, football, despite being older than IPL, the I-league golf, badminton, American football and has struggled to find sponsors and volleyball. However, these leagues are broadcasters since its inception33.

Table 6: A summary of various sporting leagues in India

Indian Indian World Series Golf Premier Name Premier I-League Badminton Hockey League League League League

Sport Cricket Hockey Hockey Golf Football Badminton

Promoters / Nimbus Sports Shiv Kapur & BAI, Sporty BCCI Hockey India AIFF founders & IHF Neeraj Sareen Solutionz

No. of 8 8 5 7 14 6 franchisees

Max. 27 players, Min. 16, Max. 9 4 (1 Max. 11 and Allowed to foreign players 25 registered international, 1 min. 10 players 24 players (10 register 4 Team in squad and players out of Indian, 1 from including a foreign &14 foreign players composition max. 4 in which 18 can Asian tour and junior player Indian) but can field a playing eleven, play 1 from golf tour and four maximum of 3 min. 14 Indian of India foreign players players in each squad

No. of 6 1 2 1 7 1 seasons

No. of 75 59 34 - 182 16 matches

Time period Apr. to May Jan. to Feb. Dec. to Jan. Feb. Oct. to May Aug.

Total prize USD 4.2 mn USD 1.3 mn USD 0.75 mn USD 0.35 mn USD 0.11 mn USD 0.9 mn money

Franchisee fee USD 1.7–2.5 USD 6–14 mn - - - USD0.6 mn (p.a.) mn

Source: http://www.iplt20.com/, http://league.hockeyindia.org/, http://en.wikipedia.org/wiki/World_Series_Hockey, http://i-league.org/, http://www.indianbadmintonleague.co/ Primary discussions, KPMG in India Analysis

33. Binoy Prabhakar,“I-league struggling to find sponsors; IMG-Reliance facing difficulties in promoting football”, Economic Times, 4 November 2012 37 Business of Sports

The commercial viability of any league • Governance framework: It has been • Performance of national team or in India is governed by certain critical witnessed that leagues that with players at the international level success factors, such as: support from the approved federation increases interest in the game and, • Players: Involvement of the top have been able to sustain. ICL failed consequently, the league. players of the world creates interest due to lack of support from the BCCI, • League timing: The tournament among viewers and improves the and WSH is facing similar troubles due should be held at a time when: to the non-recognition of the founding quality of the game. IPL and IBL are –– No international tournament is some successful examples. On the federation as the official national sports federation of hockey. being organised simultaneously other hand, I-League is struggling to that can divert a significant section attract top players, resulting in poor • Stadium infrastructure: Quality of of the viewers viewership. stadium infrastructure contributes –– Maximum players are available • Marketing: An effective marketing to the viewing experience, which campaign is another critical factor in increases the level of interest in –– The weather is suitable for holding increasing a league’s popularity. Again, sports. This, in turn, leads to an matches. involvement of various celebrities increase in the value of media rights. The length of games and timing of as brand ambassadors or owners • Fan base: An effective strategy to matches are also some other important in IPL contributed to increased increase a franchise fan base is the factors, as gathered from the IPL viewer interest in the league. In engagement of respective franchisees experience. fact, the collaboration of the Indian with the local community. This helps entertainment industry and cricket has generate greater TV viewership, aided in making the IPL a commercial increases attendance in matches and success. sale of merchandise. Business of Sports 38

Case study: The launch of the Japanese J-League

Japanese football was in disarray Japanese teams are comprehensive reliance on big names was short- until the late 1980s and in need of sport clubs that provide entertainment lived once domestic players started reform: the quality of play was low to people of all age groups. They are also establishing themselves. Today, the and low attendance figures confirmed tasked with promoting sports in their earlier trend seems to have reversed people’s disinterest in the sport. A region and with encouraging people to with Japanese footballers playing series of re-organisational actions participate in local sporting initiatives. for major European teams (Shinji resulted in the launch of the Japanese Kagawa for Manchester United and To further increase public support, J-League. The founders (the Japanese Yuto Nagatomo at Inter Milan are a few the teams tried to connect with their Football Association) in 1991 had three examples). respective local communities. First significant primary goals in mind: of all, every participating club was Building fan bases and creating a • Improve the quality of the game; renamed after its home city. Since the culture of football were also important. base city of a team cannot be changed, The J-League aimed at reaching out to • Develop a sporting culture; the naming process helped in creating people with diverse backgrounds and • Earn international recognition. a mutual commitment between a club interests. Hooliganism was kept at bay and the locals. Every club is required to to ensure people can enjoy the games The J-League was incorporated as an operate teams at various levels, such as with their families. Singing and chanting autonomous, non-profit organisation, under 18, under 15 and under 12. This during the games was encouraged unlike the English Premier League, in motivates — and creates opportunities to create a good atmosphere. The 1992, as a limited company. However, — for children to play football. league contracted a leading global it is different from European football creative agency to rebrand the teams in the sense that its management is Several other initiatives were taken and enhance their appeal among centralised, which implies that the to make the sport more spectator- fans. Mascots and logos became an J-League — not the clubs — makes friendly and exciting for the Japanese integral part of teams’ identity, further decisions concerning sponsorships and consumers. The first official season reinforcing the bond between fans and licenses for the league. The goal was (1993) started with 10 clubs (later it clubs. Bright and eye-catching kits with to create equal financing opportunities was expanded to 18 teams). The league high recall value were also introduced. for every club (it was doubtful whether adopted a two-stage season system Like major American sports, significant each club would be able to survive on where the winners of each stage played focus was given on developing a variety its own from the beginning, because a final play-off at the end of the season of merchandise. of low interest in football). The fact that to determine the champion. Moreover, all teams are highly competitive further matches could not end in a tie after The launch of the J-League proved enhanced the league’s popularity. 90 minutes. In case of levelled scores to be a commercial and sporting after the time limit, a 30-minute extra success. Well-planned commercial Currently, there are 36 corporate time game commenced, followed by and merchandising activities, which sponsors of the league and, by a penalty shoot-out (if required). The leveraged communal and regional extension, of the clubs. This number system reverted to ‘classic’ rules in 1999 pride, resulted in the creation of a includes large multinational companies. with a one-stage league format and the strong fan base. Interest in the sport They usually compete with each other possibility of ties. There are plans to rose steadily with average attendance to acquire the status of teams’ preferred revive the two-stage format in 2015. reaching as high as 18,000 per game. supplier for different services. There Football gradually became one of the are, however, no public funds used in To improve the quality of the game and most popular sports in Japan, since professional football. increase attendance, the J-League the J-League provides the country invited foreign football stars to the The biggest challenge the founders with a domestic alternative to the teams. Among others, Gary Lineker, faced was the lack of an established English Premier League, which usually Dunga, Jorginho, Patrick M’Boma and base of football in Japan. Sumo and overshadows domestic football. Dragan Stojkovic arrived in the early baseball were far superior; only a Moreover, it also helps Japanese players years for wages reportedly as high as few children took up football as their in showcasing their talent and rising JPY300 million (USD 3 million) a year. sport. Naturally, the limited number to the top without being forced to play Numerous foreign coaches were also of players lowered football standards for other countries’ clubs. Thanks to employed, such as Arsene Wenger in the country. However, to turn this the J-League, participation in football (the current manager of the EPL team around, J-League clubs were required boomed in the country and currently Arsenal). The J-League’s embracing to go beyond being football teams and about 5 million people are estimated of the European best practices and serve as community centres. Modelled to play professionally or at the amateur systems helped it quickly improve the after the German professional clubs, level. quality of the games. However, their

Source: http://www.j-league.or.jp/eng/, KPMG in India Analysis 39 Business of Sports

Realising the potential of the sports A share of the central revenues of the sector from commercial and marketing league, local revenues and performance perspectives, several leading companies revenues constitute major revenue and business groups have invested in the sources of a league franchise. franchisees of various sporting leagues.

Figure 2.10: Major revenue sources for a franchise in leagues

Source: KPMG in India Analysis

• Share of Central Revenue: This and commercial revenue includes team sports, cost and quality issues includes a per centage of the revenue funds from franchise sponsors, and lack of an active sporting culture. to the league from media rights and merchandise sales and revenue Even an IPL team generates only central sponsors. In India, media rights generated from membership with about INR 20–25 million from 4–5 serve as a major revenue source for the franchise club. Revenue from licensees, which constitutes a minor the league as well as franchises, since franchise sponsors constitutes the per centage of their total revenue.35 other revenue streams are not strong. majority of the commercial revenue. The contribution of gate revenue to the This can be gauged from the fact that A franchisee is unable to generate overall revenue of franchises is low due media rights constitute ~70% of the significant revenue from licensing to inexpensive ticket pricing, especially total revenue of an IPL team34. and merchandising, since sports in non-cricketing leagues. This is in licensing is still in a nascent stage and • Local Revenue: Local revenue for contrast to the leagues abroad where plagued by multiple challenges such as a franchise stands for revenue from gate revenues contribute significantly to rampant counterfeiting, low fan affinity, match day ticket sales (gate revenue) a franchise’s revenue. low popularity and development of

Table 7: IPL/I-League

IPL I-League

IPL teams generate INR10–30 million per match Average occupancy of I-league depending on occupancy and ticket prices matches is 500 people36 I-league ticket prices range from IPL ticket prices range from ~INR500–20,000 ~INR 30–300 IPL teams are generating 10–15 per cent of their revenues from gate receipts.

Source: Industry discussions & KPMG in India Analysis

• Performance Revenue: This is the from international case studies. performance-linked revenue source for However, association with sports franchises. has significant other benefits in the form of increased brand recognition, 34. Khushboo Narayan, “Profits still elude some IPL teams”, www.livemint. Returns on investments made by the com, 2 April 2013 connect with the target segment, and 35. Industry Discussions, KPMG in India Analysis franchise owners would have long increased sales in the core business 36. Binoy Prabhakar. “I-league struggling to find sponsors; IMG-Reliance gestation periods as understood facing difficulties in promoting football”, Economic Times, 4 November of franchise owners. 2012 Business of Sports 40 41 Business of Sports

Ways of monetising sporting assets/leagues

•• Re-packaging existing sporting heroes as brand ambassadors of stores, book and music stores, etc. competitions like the various teams and engaging with in existing stadia, to transform in- and I-League to capture audience schools and colleges by organising stadium sport viewing into a family interest. This could be achieved nationwide tournament- specific exercise, and so that they could through timings conducive to family quiz competitions, for instance, serve as a popular entertainment viewing, both on television and a ‘Ranji Quiz’, and sponsoring other spot for non-traditional sports fans as in-stadium, suitable ticket pricing nationwide inter-school/college well. A hike in ticket prices could be structure with special offers for family competitions. considered consequent to a rise in tickets and student tickets to drive in-stadium viewership. The existing •• Apart from re-packaging the audience, refurbishment of stadia, stadia may also be monetised by tournaments themselves, it is better viewing angles, spectator organising multiple sporting events important to create supporting friendly game formats, broadcasting and entertainment shows, wherever infrastructure like restaurants, bars, in both Hindi and English, strong possible. fast-food chains, merchandise marketing involving celebrities/local

Case Study: Verizon Centre, Washington DC, USA

The Verizon Centre is a multi-purpose host to more than 36.5 million people sports and entertainment venue with who have attended the 3000 plus40 a seating capacity of 20,00037 seats events organised at the venue. and is home to the NBA’s Washington Supporting funds during the Wizards, the NHL’s Washington Capitals, development of the arena came from the WNBA’s Washington Mystics, and the arena naming rights deal that were the NCAA’s Georgetown Hoyas men’s sold to Washington based MCI Inc. for basketball team. USD 44 million,41 over 20 years, and the The Verizon Centre is the result of a arena was subsequently named the MCI USD 7 Billion38 redevelopment plan, Centre (after Verizon Communications that was launched 17 years ago by took over MCI, the arena was renamed sports entrepreneur Abe Pollin, who the Verizon Centre), multiyear deals with envisioned a new sports arena in corporate sponsors and the sale of the downtown Washington as opposed to arena luxury suites that were priced the older U.S. Airways Arena that he USD 100,000-USD 17500042 in 1997. operated, which was too difficult to get The Verizon Centre is considered a to—since it was situated in the suburbs commercial success and following Abe of Washington DC, and also out of date. Pollin’s death, the stadium was sold to The Verizon Center boasts of 100 plus39 Ted Leonsis (owner of Verizon Centre’s luxury suites, a high-definition center- tenant Washington Capitals professional hung scoreboard, an indoor basketball football team) who subsequently practice facility and 10 dressing rooms. established a new management This is supplemented by a variety of company-Monumental Sports and concession stands and restaurants. Entertainment that stands as the The arena also houses various sports current owner of the Verizon Centre. bars and grills, clubs, the Volkswagen Theatre, a fitness centre and a salon. Other benefits: Since its inception, the arena has The Verizon Centre has revitalised

hosted high profile sporting events like the surrounding neighbourhood in 37. “The Verizon Center Official Website”, http://verizoncenter. the 1998 Stanley Cup Final, the NBA downtown Washington DC, with the monumentalnetwork.com/about-verizon-center, accessed 15 January2014 (2001) and WNBA (2002, 2007) All-Star opening of numerous restaurants, bars 38. “The Verizon Center Official Website”, http://verizoncenter. games, and the 2003 World Figure and other businesses. monumentalnetwork.com/about-verizon-center, accessed 15 January2014 Skating Championship, besides being 39. “The Verizon Center Official Website”, http://verizoncenter. the venue for numerous family shows monumentalnetwork.com/about-verizon-center, accessed 15 January2014 and concerts. The stadium has served 40. “The Verizon Center Official Website”, http://verizoncenter. monumentalnetwork.com/about-verizon-center, accessed 15 January2014 41. http://www.sportsbusinessdaily.com/Journal/Issues/2011/09/19/In- • Sponsors should drive more fan club in incremental sales but can also have Depth/Naming-rights-deals.aspx, accessed on 15 January 2014 activities and promotional campaigns. significant intangible RoI associated 42. Thomas Heath and David Montgomery, “Pollin: With Opening of MCI Center,’I’ve Got Everything I’ve Ever Done in My Life on the Line’”, Sponsorship in sports not only results with it. Washington Post, 30 November 1997 Business of Sports 42

Figure 2.11: Sponsorship in sports

E.g. Sponsorship of the Olympics, European Championships Incremental sales and Champions league helped boost sales by 15% (1). Tangible RoI

Greater brand High sports viewership and mass popularity provide a potent marketing lever to various brands of reaching out to consumers recognition and increasing their brand recall Sponsorship in sports Connect with the Heavy marketing investment in sports by brands and firms with a strong youth connect. E.g., aerated drinks, snacks, mobile target segment services, etc. Intangible RoI

Building brand E.g. Tournaments and sports programs organised by companies loyalty through in geographies where their operations/ manufacturing units community are located. Sports are seen as a lever to enable community engagement connect and mobilization.

Source: KPMG in India Analysis, (1) http://online.wsj.com/news/articles/SB10000872396390444320704577564222724263842

Case Study: P&G Thank You Mom Campaign

P&G that signed on to become a global Benefits from the ‘Thank You Mom’ Olympic sponsor for 10 years chose campaign: to use the platform of the Olympics • Sponsorship of the U.S. team at the to connect with its target audience— 2010 Vancouver Winter Olympics moms all around the world. The ‘Thank delivered USD 100 million43 in You Mom’ ad campaign was aimed at incremental sales increasing brand loyalty among key customers who use P&G products • Sponsorship of the 2012 London most, i.e. women of age 18+ and Olympics has resulted in incremental ‘moms’, by bringing across the message sales of USD 500 million44 or more that behind every Olympian, there is an • Increased brand loyalty with a 5-10% ‘equally awesome mom’ who deserves increase in sales and market share of to be thanked. The campaign thanks participating P&G brands moms of not just Olympians, but moms all around the world who work hard to • Increased brand awareness of P&G. raise their children. The ad campaign For instance, awareness of P&G in therefore, helped P&G to connect Russia increased from 0% to 15%, emotionally with target customers with 75% linkage to P&G brands45 (moms) by showcasing that P&G • P&G ‘Thank You Mom’ ad campaign understands what it takes to be a mom. garnered more than 75million P&G is also an example of a non- YouTube views46 traditional sponsor that identified the opportunity that a competition like the Olympics presents, to attain its marketing objectives.

43. http://prsany.org/downloads/BigAppleAwards2013/p_g_builds_consumer_loyalty_during_london_2012_olympics__marina_maher_communications.pdf, accessed on 15 January 2014 44. http://thearf.org/images/uploads/documents/2013_Ogilvy-Awards_Case-Study_Procter-Gamble.pdf, accessed on 15 January 2014 45. http://prsany.org/downloads/BigAppleAwards2013/p_g_builds_consumer_loyalty_during_london_2012_olympics__marina_maher_communications.pdf, accessed on 15 January 2014 46. http://prsany.org/downloads/BigAppleAwards2013/p_g_builds_consumer_loyalty_during_london_2012_olympics__marina_maher_communications.pdf, accessed on 15 January 2014 43 Business of Sports

Sponsors in sports can also be classified of their product positioning and have as traditional sponsors and non-traditional high proportion of youth in their target sponsors. Traditional sponsors come segment. Non-traditional sponsors belong from business categories/ sectors that to sectors that may not have a direct have a direct linkage with sports in terms linkage with retail consumers.

Figure 2.12: Sponsors in sports

Sponsors in sports

Traditional sponsors Non-traditional sponsors

E.g., Aerated drinks and food Real estate companies, Personal product makers, alcohol care/household products companies, mobile service manufactures, Infrastructure providers, airlines, etc. development firms, heavy engineering companies, etc.

Association with sports provides a infrastructure, etc. have also forayed into strong marketing platform to businesses. sports sponsorship due to the visibility Companies from sectors that have it provides and high potential RoI, both typically not associated with sports, tangible and intangible such as real estate, household products,

Key issues

•• Lack of transparency in the and can dissuade potential corporate governance of leagues: There have investment. been instances of controversies •• League monetisation: Non-cricketing around conflict of interests. For leagues, such as the I-league, has instance, being a franchise and a found it tough to become profitable. league owner at the same time; controversial auctioning of players •• Limited engagement of franchisees and spot-fixing. Such incidents have with the local community: This could raised questions on professional have resulted in limited viewership governance and transparency in these and failure to generate interest in the leagues. They also tend to result in game. loss of faith among league sponsors Business of Sports 44

2.6 Sports as a career — opportunities and performance incentives

Incentives to encourage people to pursue sports professionally There are various incentives for youngsters to pursue a career in sports, which can be broadly categorised, as shown in Figure 2.11: Incentives to encourage people to pursue a career in sports.

Figure 2.11: Incentives to encourage people to pursue a career in sports

Incentives Financial Cash rewards Monetary by the assistance by the central Alternative Incentives gains through Government for and state careers and PSUs education other sources Governments

Coaching, sports management/ Jobs, marketing, pension Cash and Scholarships Sponsorship sports funds, land awards by UGC deals and psychology, Examples perform- to Olympic based on product sports ance-based medal performance endorsements education, promotions winners sports journalists, analysts, commentators

Source: KPMG in India Analysis 45 Business of Sports

Role of the Government in providing incentives and creating a safety net for players

Government initiatives for the creation persons winning a medal(s), at •• Scheme of pension to meritorious of a safety net for players include the international competitions, an out- persons: This scheme allows following: of-turn promotion, with a maximum monthly pensions to medal winners of three such promotions. at the Olympic Games, Asian Games, •• Sports quota in Government jobs Commonwealth Games, World and public sector undertakings Similarly, state Governments also Championships and Para-Olympic (PSUs): According to rules established have the provision of sports quota in Games in the range of INR 3,000– by the Government of India 47. Government jobs: 10,000, when they turn 30, or later if –– Meritorious sportspersons –– Various state Governments provide their sports career is active52. However, who have represented about 2 per cent sports quota in there is no central pension scheme for organizations/states/the country Government jobs48 49. Haryana, medal winners at the National Games. at international, national, state which provides 3 per cent sports Since sports is a state subject, some or university-level games or quota, is an example of a state states like Gujarat have launched national games for schools that boasts of a well-established pension schemes for people who have with requisite qualifications are incentives structure49. participated in national-level games as eligible for recruitment under well53. Moreover, the sports ministry recently the sports quota in various announced direct recruitment of all •• National Welfare Fund for Government departments or PSUs, Olympic participants as SAI coaches, Sportspersons 54: This fund provides withstanding total candidates equivalent to Group B officers50. financial assistance to former through reservation do not exceed sportspersons living in indigent 50 per cent. •• Performance-based financial conditions, to players for medical assistance for education under the –– Recruitment of sportspersons treatments and the former players sports quota: Elite sportspersons against the sports quota is done who are now disabled. It also provides who are medal winners at national for Group C and D posts and financial assistance to budding games or participants of recognised cannot be done for Group A and B sportspersons in need. international games/championships posts under direct (no qualifying are provided with financial assistance The Indian Parliament recently discussed examination) recruitment. by the University Grants Commission the possibility of formulating a policy on –– To motivate players to continue (UGC) for undergraduate and graduate pensions for former sportspersons who performing well, the Government university courses51. have been successful in national-level has decided to provide sports- games55.

Role of the private sector The Indian sports sector is at a stage •• Non-profit organisations where it requires thrust from both supporting athlete development: Government and the private sector for Presence of organisations such as realization of its true potential. Some of OGQ and Mittal Champions Trust, the ways in which the private sector is which raise funds from corporate helping provide performance incentives players and individuals to support and career opportunities to sports training requirements of athletes, is persons in the country are as follows: motivating. Such companies could increase the chances of winning •• Sports consulting firms: Sports medals and, thereby, monetary 47. Government of India,http://ccis.nic.in/WriteReadData/CircularPortal/D2/ consulting primarily includes D02est/14034_01_2013-Estt.D-03102013.pdf, accessed on 15 January rewards on winning in international 2014 consulting for sports clubs, games. 48. “Sports Authority of Andhra Pradesh-Draft Sports Policy 2012”, Sports player management and player Authority of Andhra Pradesh, accessed on 15 January 2014 49. Virendra Singh Rawat,“UP sportsmen demand 2% job quota”, Business representation. The latter two help Standard, 11 December 2012 players make choices and connect 50. Sports Policy of Haryana , 2009 51. PTI, “Ministry offers coaching jobs to Olympians current and former”, them with appropriate resources The Times of India, 27 July 2012 suited to their career requirements 52. “Guidelines for providing ‘free education for sports medal winners/ participants of national/international events’-During the XII plan” , and post-retirement plans. However, University Grants Commission, accessed on 15 January 2014 increasing such practices could only 53. “Pension to Sports Persons”, MYAS(Government of India), accessed on 15 January 2014 be possible with the advent of leagues 54. TNN,“Gujarat govt launches pension scheme for veteran sportspersons”, for sports and the implementation The Times of India, 4 July 2013 55. Tushar Tere (TNN), “Pension scheme for ex-sportspersons in the offing”, of a proper framework on player The Times of India, 25 August 2013 management practice by respective national/international federations. Business of Sports 46

Case study: Ways to attract and incentivise sportspersons to pursue a career in sports — the U.K.

There are two major channels of public –– Development: athletes whose athletes on the ‘podium’ level is about funding for professional athletes in the performances suggest they can be £18,500 per annum, the average figure U.K.: the World Class Pathway (WCP) competitive. These athletes usually for ‘development’ level athletes is programme and the Athlete Personal do not spend more than 3–4 years at approximately £7,500. Award (APA). this funding level. As part of private financing, Sportsaid, a The former, initiated by the U.K. Sport in –– Talent: targeted at athletes who charity fund established in 1976, aims 1997, aims to support athletes who are have the potential to progress to support young talent between the genuinely interested in winning at the through the World Class Pathway age of 12 and 18, who train in one of the Olympics. Each funding cycle lasts for programme. This is a kind of ‘R&D’ Olympic and Paralympic sports at the four years, starting after the Summer investment at the youth level. amateur level, but have the potential to Olympics year. Money from WCP is first succeed in the future. This project relies transferred to sports governing bodies The number of ‘podium’ and on raising funds from the corporate so that it reaches athletes indirectly. ‘development’ grants awarded to each sector and private individuals. sport depends on recent performances There are three different types of and demonstrable future potential. It should also be noted that financing funding within the WCP programme: is also channelled to professional The other notable channel, APA, is sportsmen from private sponsorship –– Podium: athletes with the most paid directly to the athletes. It serves deals, which either flow through the realistic winning capabilities at the as a contribution toward personal sport federations and sports clubs or are next Olympic Games (duration: living and sporting costs. Similar to the directly signed between sportsmen and maximum four years) WCP programme, there are different sponsoring companies on an individual performance categories. While the basis. current average APA payment to

Source: http://www.uksport.gov.uk/pages/wc-performance-programme/, http://www.uksport.gov.uk/pages/athlete-personal-awards/, http://www.sportsaid.org.uk/ KPMG Analysis

Other factors aiding the creation of a safety net for players

•• Cash rewards by central and state •• Backup careers: These are and sports consulting in the future Governments: Players who win opportunities provided by the if the trend of league-based sports medals or perform well in international Government and the private sector to in India gains acceptance widely. competitions such as the Olympic retain players in the sports ecosystem Similarly, to fulfil the demand of Games and Commonwealth Games even after retirement from active coaches in line with the Government’s benefit from rewards from various sports. The sports ministry’s decision vision, pursuing courses in sports state Governments, the Central on direct recruitment of all Olympic education, psychology and nutrition Government and companies. participants as coaches is aimed can also be potential backup options. Such awards could not only act as at providing financial security to Sportspersons may also get training to incentives but they also help secure players. Players could also consider become analysts, commentators and players’ future. backup options in the fields of journalists. sports management/marketing

Key issues

•• Lack of policy ensuring financial •• Non-recognition of the Indian security post retirement: There sports industry: The absence of a is no pension policy or policy to sports industry in India often restricts ensure financial security of players opportunities in sports management/ representing India at international marketing/consulting. This can games who are not able to win restricts the possibility of retaining medals in such events or national-level elite sportspersons in the sports sportspersons. ecosystem after they retire. 47 Business of Sports

3. Taxation in the sports sector Business of Sports 48

Background

Taxation of artistes, sportspersons and gravity of the matter, one may recall that foreign teams participating in various the Standing Committee on Finance national and international sporting/ had to present a comprehensive report entertainment events in India is in 2011 before the Lok Sabha on ‘tax complicated, especially from a direct tax assessment/exemption and related perspective. This is primarily due to the matters concerning IPL/BCCI’1; that difficulty around the characterisation of Usain Bolt, the fastest human on planet, their incomes. This is principally driven refrained from participating in an event by the extremely creative and complex held at Crystal Palace, London, in August manner in which contracts are structured 2010, owing to ‘unfavourable’ laws — multiple jurisdictions are involved since of the United Kingdom on taxation of artistes and sportspersons are generally sponsorship and winning income.2 always on the move. To substantiate the

Broad overview of the direct tax framework

In India, Section 115BBA, under Chapter country and the country of residence of XII of the Income Tax Act, 1961 (‘the the artiste/sportsperson. Such income Act’), provides for taxation of artistes/ is taxed as per the domestic tax law of sportspersons and establishes a specific the source country in India, in terms of manner in which the income earned Section 115BBA of the Act. Further, the by a non-resident sportsperson and MC does not provide for any time or fee sports association shall be computed threshold to trigger the application of and brought to tax in India. Certain Article 17. However, some bilateral tax specific income streams of non-resident treaties that India has entered into act non-citizen athletes and sportspersons, as an exception to this rule by providing such as guaranteed participation fee, either for some time (e.g. India-Egypt Tax advertisement income and income from Treaty) or fee threshold (e.g. India-US tax contribution to articles in newspapers treaty) to trigger the application of Article and journals are liable to be taxed in 1 7. India at the rate of 20 percent (excluding Article 17 also provides for specific surcharge and education cess) on gross anti-avoidance provisions to counter any basis. Further, the Central Board of Direct devices/schemes, pursuant to which Taxes (CBDT) has also issued a Circular3 incomes of an artiste/ sportsperson that addresses certain issues relating to accrues not to him but to any other the taxation of national and international person. It further provides for exemption events and shows for entertainment and by the source state of the performance sports. income that an artiste/sportsperson The Organization for Economic may earn from performances that are Cooperation and Development’s Model substantially supported by public funds. Tax Convention (‘OECD MC/MC’) This reservation or exemption is included provides special provisions under Article in the majority of bilateral tax treaties that 17 for taxing artistes/sportspersons India has entered into. who perform internationally. Simply An artiste/sportsperson earns income put, Article 17 of the MC allocates to the from various sources; however, only country of performance (‘source country’) incomes ‘from his personal activities the right to tax the consideration paid to as such that is incomes that are a non-resident artiste/sportsperson for predominantly attributable to an performance therein. This is irrespective artiste/sportsperson in the capacity of whether the artiste or sportsperson of a performer or his other activities is self-employed and has a permanent or property rights as a performer, are establishment in the source country or is covered within the ambit of Article an employee. In other words, Article 17 17. Some typical streams of income of overrides the normal taxation provisions an artiste/sportsperson and their tax of the MC (i.e. Article 7 and Article 15). implications are as follows: Further, Article 17 of the MC does not provide for any computation mechanism 1. Circular No. 787 dated 10 February, 2000 2. 38th Report of the Parliamentary Standing Committee on Finance - Tax but, as stated earlier, merely allocates Assessment and Exemptions and Related Matters Concerning IPL-BCCI the taxing rights between the source 3. Usain Bolt snubs London meeting over tax laws”, BBC, 12 July 2010 49 Business of Sports

Participation fees and prize money:

Article 17 applies to all remuneration income from winnings, which includes fee/prize money. Accordingly, there is a paid to an artiste/sportsperson with winning from any game or sport played in need to evaluate whether unguaranteed respect to his performance in the source India, and brings them to tax at the rate participation fee/prize money can be said country and is liable to tax. As discussed of 30 percent (excluding surcharge and to be governed by Section 115BBA of the above, Article 17 does not provide for education cess). Act. If not, would the normal provisions any beneficial rate or mode of taxation of the Act apply? Accordingly, there is a The presence of several provisions has and hence, the same would be governed need to evaluate whether the provisions given rise to a controversy wherein the by the provisions of the domestic tax of Section 115BBA apply to unguaranteed industry seems to be debating whether law — in the Indian context, this would participation fee/prize money. If not, prize money earned by artistes or be according to Section 115BBA of the whether a reasonably attributable share sportspersons should be taxable under Act. In terms of the said Section, certain of such unguaranteed participation fee/ Section 115BB or 115BBA of the Act. The specific income streams of non-resident prize money to the performance of the fact that neither of them begins with a non-citizen athletes — which includes the artistes/sportspersons in India be liable non-obstante clause while both of them guaranteed participation fee — is brought to tax at the rate of 40 percent (exclusive constitute the special provisions chapter to tax in India at the rate of 20 percent of surcharge and education cess) on the further aggravates the issue. (excluding surcharge and education cess) net income basis in terms of the normal on gross basis. Further, Section 115BB of As discussed above, Section 115BBA provisions of the Act. the Act specifically deals with taxation of applies to only guaranteed participation

Sponsorship and advertisement income

Besides performance fees, artistes/ There is an ongoing spate of sight. Similarly, other matters are also sportspersons often receive income in controversies surrounding the taxation being debated such as whether there the form of advertisement or sponsorship of global advertisement and sponsorship is a possibility to cover within the ambit fees (includes fees received for the arrangements that artistes/sportspersons of Article 7, instead of Article 17, the encryption of logos, trademarks or enter into. It has been debated, now advertisement and sponsorship revenues trade name on the clothes or their in fact for quite some time, whether it that an artiste/sportsperson earns from other apparatus). The commentary to is possible to cover within the ambit of arrangements that are global in nature but OECD MC 2010 states that, typically, Article 17 a reasonably allocable share of do not relate to any specific tournaments. royalties for intellectual property rights global advertisement and sponsorship Consequently, in the absence of will be covered by Article 12 (royalties revenues of artistes/sportspersons and any permanent establishment, such and fees for technical services) and not offer to tax them in various countries of payments may not be liable to tax in the Article 17; however, general sponsorship their performance. The OECD discussion source country. There is a similar issue income directly or indirectly linked to the draft on Article 17 inter alia includes with Global Prize Money too. performance in a source country would discussion on this aspect. However, be covered by Article 17. the resolution does not appear in

Some other contentious issues on which the industry awaits clarifications from the Government

Besides the concerns outlined above, The jurisprudence on the taxation following are some key issues that merit of artistes/sportsmen has been consideration: continuously evolving for the past century-and-a-half, while India has only •• Taxation in case of a triangular treaty: recently started tackling issues related For example, payments made by to special taxation rules. Given the Rajasthan Royals, an Indian company, complexities, coupled with limited Indian to Shane Warne, an Australian and international judicial precedents resident, for participating in IPL 2, on the subject matter, the debate on played in South Africa4. the taxability of income earned by •• Section 115BBA covers within its artistes and sportspersons is likely to ambit only guaranteed income. continue in the near future. Hence, the However, there is no clarity on what Government could do well to understand constitutes guaranteed income. the industry’s requirements, rationalise the tax structure and put to rest these •• Tax implications on the player transfer issues by issuing appropriate legislative fee, signing fee/joining bonus, which commandment. are common in soccer leagues worldwide.

4. “Pruning Rajasthan Royals squad was horrible job: Warne”, , 17 April, 2009 Business of Sports 50

Overview of the Indian indirect tax regime:

Indian sports have overhauled over for customs and 12 percent for excise. the last decade-and-a-half with strong State Government continued to levy commercialisation and globalisation of entertainment and entry taxes. related activities. Similar modernisation With the maze of taxes and both central is also reflected in the changes in and state Governments taxing activities/ tax treatments and consequently tax goods, the indirect tax regime in India disputes. Meanwhile, there were some is undoubtedly complex. However, with more important changes in the form increasing complexities in the field of of the value-added tax (VAT) replacing sports — with sponsors, franchisee, sales taxes during 2005–2007, service event managers, sports bodies and tax expanding its ambit to cover almost Governments playing their respective all services in the economy while excise roles — the application for indirect taxes and customs duties held the fort by has become complex for the industry as reducing a plethora of notifications and well as the Government. rates stabilising at about 25–30 percent

Key indirect tax issues in the sports sector

The manufacturing of sports goods office equipment. The Government often The service tax law provides for is concentrated in a few pockets in allows duty-free imports for mega events exemption to services provided by India and was traditionally a labour- on some conditions. But frequent delays certain professionals or sponsors to intensive industry serving India as well often keep organisers on tenterhooks. A a recognised sports body. However, as other countries. The Government simple system may help the Government there is no clarity on whether such an had granted exemption from excise to and organisers to address such issues. exemption can also extend to services sports goods, which was withdrawn in provided to franchisees, since the league The advent of service tax coincided 2011 to bring them in line with those by is ultimately organised by the respective with the commercialisation of sports in state Governments to pave way for the sports governing bodies. Given the high India. A small honorarium that cricketers Goods and Services Tax (GST). Duty was stakes involved in such franchisee-based used to get for playing for the country increased from 1 percent to 2 percent sports leagues and the fact that the in the past has turned into a massive in the following year and the industry trend of leagues is getting popular, the business through endorsements, wanted it to be rolled back. exchequer may want to tax each leg of sponsorships and franchisee events the commercial arrangement among Internationalisation of sports meant such as IPL (and similar events) with the various stakeholders, whereas the getting sports and other equipment different stakeholders (sports boards, sports professionals may want to claim (Formula 1 cars, yachts, boats and even franchisees, sponsors and players) and exemption. the video recording gears of the TV crew) service providers (event managers, into the country for a few days and then broadcasters, caterers, transporters and The business of sports is expanding the returning them. The customs law in India TV anchors) playing their respective roles. world over, including in India. Organisers have a provision to refund duty if the The Government became a crucial player should appreciate that the Government goods are re-exported within a particular for providing security (police), safety (fire intends to support them in exchange time period. However, players and their protection services), electricity, water of only a small share of profits in the franchisee consider this as a major and various permissions for such events. form of taxes. On the other hand, hindrance due to the time it takes to get The success of sporting events has the Government should also aim at refund. In January 2014, the Commerce attracted tax sleuths who wade through proactively supporting them in building Ministry proposed a duty-free import of contracts to identify any “activity for the requisite infrastructure to identify and racing vehicles after executing a bond and consideration” that can be potentially cash in on the country’s talent as well undertaking to re-export within 30 days. covered under service tax but may have as in promoting the commercialisation been disguised by organisers under of sports similar to other industries, by In international events such as the Cricket “sharing of profits” model to avoid paying addressing challenges and providing World Cup, sports bodies are often found taxes. additional incentives. struggling to get exemptions for the sport, medical, broadcast and other crucial 51 Business of Sports

4. Issues and Recommendations Business of Sports 52

This chapter intends to discuss recommendations on key issues identified across various segments of the sports ecosystem, which have been discussed in detail in the earlier chapters.

Table 8: Key issues and recommendations

Segment Issue Recommendation Examples/case study

Overall Lack of a sports Nationwide campaign to raise awareness on sports Campaigns like those run for culture in India • A nationwide media campaign stressing the other Government schemes e.g. importance of sports and involving famous Pulse Polio program, the adult personalities/celebrity endorsements could help literacy program, NDTV Marks encourage uptake of sports in the country for Sports, etc. • Promoting uptake could induce a demand for training Means could include TV facilities inviting investment in establishing the same commercials, regional and national newspapers, marathon • Cricket’s popularity in India is primarily the reason for campaigns etc. the commercial success of the IPL. Thus, promoting sports culture in other sports could make leagues a lucrative format inviting more corporate investment, leading to further sport development.

Implementation of a uniform sports policy across all Case study on Haryana states Government’s sports policy 4. Issues and • Build a uniform sports framework (as bare minimum) shows initiatives around for adoption by all states improving talent scouting efforts by implementing Recommendations • Make case studies of successful initiatives taken up advanced methods like the by leading sporting states, which are available to all SPAT test, etc. Also, innovative states schemes to encourage uptake of sports by providing incentives Active regional/local media supporting the cause of to even coaches and villages developing sports in India of sports achievers has helped • State Governments may encourage local/regional build a culture for sports in the media to promote sports by showcasing local, state. school-level competitions, organising sporting quizzes and increasing sports coverage to create a sporting culture • The local media can involve local sporting/non- sporting heroes and icons in their campaigns to inspire the youth to pursue sports • The benefits of investing in promoting sports will be reaped in the long term when the country has a flourishing sporting culture. This would increase demand for such sports and the media would have more options on content, resulting in returns from higher advertisement rates and more viewership. • Increased popularity of sports through the media will help attract sponsors and advertisers to support various community-level competitions/leagues in the long run as well. 53 Business of Sports

Segment Issue Recommendation Examples/case study

Overall Limited funding Provision of industry status to sports avenues in sports • The Government may institute flexible policies and comprehensive laws to make way for an investment- conducive sports environment while trying to ensure that the industry is regulated. • Entry of private sector could boost sports professionalism and the quality of sports infrastructural facilities, which could have a positive impact on Indian sports performances. • Industry status to sports could help expand associated industries like sports manufacturing, education, sports medicine, etc. • Professionalization and increase in opportunities in sports could incentivize a larger segment of athletes to remain part of the sports ecosystem, assaying different roles post retirement, leading to further advancement of the sports sector.

Sports Lack of Strict implementation of the ports Bill 2013 governance transparency • The bill would help ensure strict adherence to age and tenure rules, and the prohibition of charge framed persons in the governing bodies. • The bill’s proposition of a Sports Election Commission for conducting free and fair elections within all sports governing bodies, and the inclusion of more athletes in the executive bodies of the same, could aid in avoiding corruption. • Non-corrupt functioning of the IOA and the federations could also circumvent the issue of tussle between groups for being recognised as the apex federation for a particular sport.

Limited Incorporation of a Community-level Engagement Case study on Australia community-level Team governance model highlights engagement in • This team, under the aegis of MYAS, could be a the importance of the sports despite support system for the NSFs and advise them in Community-level Engagement PYKKA planning and holding of events and competitions, Team. thus increasing the scope of reach to the grassroot.

Limited Institution of a Corporate Relations Team Case study on Australia commercial focus • The Corporate Relations Team under the aegis of governance model highlights of governing MYAS, could be a support system that looks after the importance of the Corporate bodies marketing, sponsorships, and budgets of the SAI and Relations Team. the Community-level Engagement Team proposed above with the latter working on building capability of the NSFs and promoting community level sports • This could help bring more focus to the primary objectives of the SAI and the Community-level Engagement Team, i.e. provide training facilities to upcoming athletes, and help organise competitions to monitor participation & budding athletes, respectively. • This could also lead to more professional handling of funds, encouraging corporate participation. Business of Sports 54

Segment Issue Recommendation Examples/case study

Talent Lack of co- Identifying and promoting networking among all scouting ordination concerned stakeholders and between • For each sport, the total number of stakeholders training of concerned investing in/holding rural and district level players & bodies affecting competitions could get connected and work in trainers professional unison through the institution of a board perhaps; uptake of sports since it has been observed that there is a lack of interaction between various organizations like the SAI, NSFs, private companies, PSUs, etc. who go about conducting competitions for talent scouting independently. • A strong interaction of all the stakeholders could also give rise to more PPPs where for instance, trainees could train at infrastructure provided by SAI and private companies could fund player scouting & training or vice versa.

Lack of coaches Collaboration between SAI and NSFs for training and technical coaches know-how of • Government organizations like the SAI which have sports in India good sports education infrastructure may collaborate with national sports federations that have up to date knowledge of present day techniques used in the respective games in order to develop a pool of expert indigenous coaches. • Such interactions are currently missing and could help in tackling the challenge of lack of expert coaches. • This could also help private academies become sustainable by reducing their reliance on expensive foreign coaches.

Scarcity of Allowing access of public infrastructure to private Case study on AFC Ajax Youth playing spaces training academies in lieu of reasonable fees Academy, Amsterdam, The and high capital • Opening of public infrastructure like stadia and Netherlands- expenditure residential schools to private training academies AFC Ajax is one of the most required to could aid in public/legacy asset monetization and advanced football academies establish prove sustainable for both the Government and the in Europe. Nonetheless, the private training private academies. main stadium of the academy academies is owned by a private-public holding company and the Government of Amsterdam. 55 Business of Sports

Segment Issue Recommendation Examples/case study

Talent Consider alternative modes of financing Case study on Manchester scouting • Some examples are obtaning revenues from naming United Academy- and rights by private academy owners Manchester United Academy training is the youth development of players • With the advent of leagues in India, some clubs owning academies could generate revenue from academy/program of the & trainers Manchester United Football governance the transfer of players to other clubs in the game of football. Club. The academy has generated innovative revenue streams like: • Revenue from sale of players: David Beckham was sold to Real Madrid for £ 24.5 million (most expensive home-grown player) • Academy naming rights: Manchester United agreed on an eight-year naming rights agreement with Aon in April 2013 that resulted in the Trafford Training Centre being renamed to the Aon Training Complex. The deal has been estimated to be worth around £ 120 million.

Imposition of Relief/exemption from duty for private academies customs duty upon certain conditions on training • Private academies may be exempt from a percentage equipment of or full duty, provided the equipment is being imported imported for training of certain top players in the by private academy. academies vs. duty exemption • A minimum criterion could be set for players whose on the same training equipment is exempt from import duty such imported by the as those who have consistently performed well at Government inter-state/national level games or above.

Inadequate Continued increase of public-private fund like the support to former National Sports Development Fund(NSDF) sportspersons • The NSDF1 is a public-private fund that is funded by opening private the Central Government, a few state Governments academies and some private entities, and is used for the training of elite sportspersons for important international level games and for the development of sports organizations. The NSDF donated requisite funds for a synthetic athletic track (to meet international training standards) to the Usha School of Athletics. • Similarly, the Government could formulate a policy to fund a specific number of foreign coaches for private training academies, opened by former sportspersons of repute or by those who have brought international laurels to the country. Such measures from the Government would incentivise sportspersons to remain a part of the Indian sports ecosystem, further leading to its development.

1. Sourjya Bhowmick, “What does it cost to win an Olympic medal”, www.indiaspend.in, 9 August 2012 Business of Sports 56

Segment Issue Recommendation Examples/case study

Talent Lack of Central and state Governments and NSFs may scouting awareness of promote awareness of opportunities for sport and training opportunities for coaches of players & sports coaches • The Government could build case studies of typical trainers career paths and opportunities available, as sports coaches, nutritionists, psychologists, etc., to create awareness regarding the career progression in these fields, which would inspire more people to take up sports as a career. • The Union Government / state Governments or sports federations could maintain a repository of various companies and PSUs that look to recruit coaches and make that accessible to players who would like to take up coaching as full time career upon retirement. • A uniform policy could be implemented mandating all state Governments to maintain a database of all state sports coaches and ensuring that a minimum number be sent for refresher courses whenever such courses are organised by SAI. The database could be used to select the most suitable candidates for the refresher courses.

Lack of Evaluation of demand by the Government for these The case study on the strong specialised courses and establishment of lucrative incentives by emphasis on sports courses courses in the Government for their inclusion in existing private in the UK explains that from a nutrition, sports and public universities financing perspective, majority medicine, • The Government may assess demand for sports of the universities/courses are psychology, etc. sciences and sports management; on the basis funded from public sources with that incentives are provided to established private very little funding coming from and public universities to support inclusion of such payment of tuition fees. courses as a separate stream of study. 57 Business of Sports

Segment Issue Recommendation Examples/case study

Sports Insufficient Legacy planning to be done before the An example of effective legacy infrastructure legacy planning construction of stadium/assets begins planning is that of the Glasgow for various • Legacy planning with future stakeholders Commonwealth Games 2014. games hosted of the property could be done before Glasgow announced its initial legacy by India leading construction begins. It is important to plan in late 2009; in contrast Delhi, the to poor asset incorporate requirements such as the venue for the games in 2010, had not monetization inclusion of a restaurant, hotel, size of started legacy planning even by then. administration block, etc. in the design of Case study on the City of the stadiums as per the legacy plan, for Manchester Stadium- optimal use and monetization of assets after The stadium was the main athletics the games are over. stadium for the Commonwealth • A current instance where legacy planning Games 2002. However, for effective needs to be stressed upon from now itself monetization, the City Council struck is the new mega cities that the Government an agreement with the Manchester is planning to develop from scratch, for e.g. City FC to convert the stadium to a the Delhi Industrial Corridor (DMIC). football stadium with the club paying Such projects could provide immense for stadium redevelopment. Apart from opportunities for PPPs and economic activity the Council that generates revenue for all industries including sports. from the rent paid by the club, the club itself has been able to make the venture profitable through innovative deals like: • Selling of naming rights of the stadium to Etihad • Using the match day sales to pay rent to the council, with no money due if ticket sales did not exceed the capacity of their previously owned stadium. Another example of legacy planning is the Naya Raipur Sports City whose development is underway: • The sports city is being built on the BOT model with a private player building the city and handing it back to the Naya Raipur Development Authority • An area is ear-marked as residential space to cross-subsidize the sports facilities built. Business of Sports 58

Segment Issue Recommendation Examples/case study

Sports Limited Mandatory implementation and periodic infrastructure implementation Central Government review of the status of of existing implementation of schemes like PYKKA, National schemes Playing Fields Association of India, at the state level across all states • The Central Government may mandate the implementation of these schemes at the state level and conduct periodic assessments of the extent of implementation of the schemes • An annual conference of all state sports ministers could be held to discuss key sports initiatives and schemes being adopted by various state Governments so that various state Governments may learn from states that have been successful in implementing innovative schemes and circumventing common challenges in instituting central schemes • State Governments may also work closely with state level sports associations to implement schemes such as PYKKA. This would help ensure state sports associations’ involvement and awareness regarding various PYKKA competitions that are being organised and the state players participating in the same. State sports associations should aim to ensure that they maintain a database regarding the outcomes of these PYKKA competitions and relay this information to the NSFs.

Limited Establishment of flexible policies and sports Case study on Amsterdam corporate investment- conducive efforts by the Government Arena, Amsterdam, the investment to attract corporate investment Netherlands- in sports • The Government may look to revise policies and • The City of Amsterdam infrastructure consider methods like innovative PPP models for identified the opportunity of development attracting corporate investment in sports. supporting the development • The Government may also create a repository of AFC Ajax’s (one of Europe’s of case studies of successful instances of top academies) new stadium corporate investment in infrastructure, available as a catalyst for city activities to all companies willing to venture in sports and urban commercial infrastructure development. development around the stadium (potential revenue generator for the municipality). • The City of Amsterdam received the naming rights of the stadium in exchange of the financial support extended to development of AFC Ajax’s new stadium. 59 Business of Sports

Segment Issue Recommendation Examples/case study

Sports Lack of a unified Integration of sports apparel exports with the Equipment representation Sports Goods Export Promotion Council (SGEPC) for the sports • Sports goods exports and sports apparel exports equipment are promoted by separate councils under the industry aegis of separate ministries which is unique to India, as in most other countries sports exports are monitored by the same organization. • These councils should work holistically for development of sports products sector and help small and medium enterprises (SME’s) to work towards developing strong Indian brands. • Developing strong indigenous sports brands could make the sports retail landscape more competitive and further aid advancement of sports manufacturing industry. Such a boost could potentially increase inexpensive accessibility to quality sports equipment thereby serving a larger market right down to the grassroots.

Non-recognition Government policy targeted at bucketing Examples of boxing gloves being of some import equipment for sports training under sports goods classified as general gloves and items as sports only and levying commensurate customs duty wrestling mats, being classified goods • Fair policies around customs duty charged on as general mats, and hence levied sports training goods/equipment could boost a customs duty higher than that sports retail and manufacturing industry in India. for the import of sporting goods have been observed. • This could also encourage corporate investment in the sports training segment of the ecosystem.

Leagues and Lack of Implementation of a uniform robust legal tournaments transparency in framework for governance across all leagues the governance • The design of the governance framework may of leagues ensure requisite professionalism and transparency. • This would also encourage corporate investment in leagues.

Poor Improved packaging of events to make the leagues Part of the IPL’s success can be monetisation of spectator-friendly attributed to its ability to deliver leagues • This may involve improving the quality of stadia, effectively on the critical success timing the events in a way that they suit a majority factors identified earlier in the of the audience and broadcasting shorter versions report. For example, broadcasting of the games (if possible) to grip audiences’ matches in prime time to attract attention. non-traditional cricket spectators, improved quality of stadia, and • Critical success factors, as identified earlier in the involvement of various celebrities report, may be considered while packaging events in the league to aid marketing, to make the league popular. broadcasting the shortest version of the game and involving popular international players. Business of Sports 60

Segment Issue Recommendation Examples/case study

Leagues and Limited Concentrated efforts by franchises to engage with Case studies on academies tournaments engagement local communities such as the Manchester United of franchises • Community engagement by franchises could help Academy demonstrate how with local build a fan base and promote a culture for the trading home-grown players is communities respective sport within the community. a major source of revenue for football clubs. • This could aid in popularising the franchise by attracting more sponsorships and endorsement deals in the future, enabling high returns on investment. • Moreover, through community engagements, franchises could train domestic talent for reducing reliance on foreign players, ensuring sustainability in the future. • Training local talent may also translate into inter-club trading of players in football, which is a potential revenue stream for clubs.

Performance Lack of policy Collaboration among NSFs and sports consulting incentives for ensuring firms to plan player careers after retirement sportspersons financial • NSFs may collaborate with various sports security to consulting firms to help all their players develop some players their retirement plans and gain requisite skills in after retirement their post-retirement streams of choice. • Sports consulting firms can help in making players aware of various options in their post-retirement careers, as well as in raising necessary funds (from sponsors and charity events) to train players in the same.

Limited career Provision of industry status to sports options within • Recognising sports as an industry in India could the sports increase opportunities in the areas of sports ecosystem management, sports marketing and sports consulting. • Is is important to invest players back into the Indian sports system, albeit in different roles, taking the industry forward.

Source: KPMG Analysis 61 Business of Sports

Way forward

A majority of the challenges identified policy that regards sports as a –– Sports consulting firms: extending in the existing sports ecosystem can be subject, for instance, would further sports consulting services to more traced to the singular issue of the lack create demand for coaches and sports, beyond cricket and football of a sporting culture in India. A thriving physical education teachers, which –– Leading corporate organizations sports environment depends not only is likely to also boost the uptake of that have been involved in on the interest among spectators, but sports coaching as a career the sports sector through also on an efficient support system –– Ministry of Finance: allocation of CSR activities: operating that continuously fuels their interest. commensurate budgetary funds non-profit sports foundations, Therefore, the scope of the term ‘sports based on the understanding of the for-profit academies and other culture’ extends beyond the popularity of developments in the sports sector for-profit ventures such as owning sports and mostly entails policy-making franchises in sports leagues are designed to encourage participation –– Ministry of Commerce and likely to take the industry forward. in sports and builds an ecosystem Industry: establishment of more comprising of connected, informed and SEZs for the manufacturing of •• Government organizations/ aware stakeholders. sports equipment and FDI in retail agencies: departments such as the Central Board of Secondary Education Thus, a Joint Working Group (JWG) could –– State Governments: (CBSE), National Skill Development be formulated that works to strengthen a implementation of grassroot-level Corporation (NSDC) and National sporting culture in India by taking action initiatives suggested by the JWG Council of Educational Research and on the recommendations provided in • Sports governing bodies: JWG Training (NCERT) can support JWG’s this report and implementing additional should ideally include representation decision-making process by providing initiatives identified by the JWG. The from all sports governing bodies such vital statistics and content. Group should ideally have representation as IOA, NSFs, SOAs and SSAs. from various stakeholders identified JWG can segregate them as short- across the sports ecosystem and include • Private bodies: The private sector in term and long-term recommendations members from: sports may be represented by: based on their ease of implementation and potential impact on their • Government bodies: –– Broadcasters: packaging non- establishment. Besides providing cricket sports to increase their –– Central Government bodies in specific recommendations for the popularity charge of sports in India such as Government and private sector players, MYAS and SAI –– Sports manufacturers and retailers: JWG may expedite work on — and the marketing and distributing high implementation of — the remaining –– Ministry of Human Resource quality and inexpensive sports recommendations. Development: implementation equipment to improve their access of sports-oriented education and at the grass-roots level employment policies. An education Business of Sports 62

Short-term and medium-term recommendations for implementation

•• Promote the idea of a nationwide •• Work towards mandating the creation media campaign involving celebrities of player identities for players of to spread awareness and generate every sport who participate in their interest in sports. This can be respective sport competitions at executed in the same way as the the community level and above. The Pulse Polio Program. player identity database could be managed by SSAs and linked to their •• Promote the adoption of a common respective NSF databasees. minimum sports policy/framework by all states after preparing a database •• Create a database of typical career of successful initiatives established paths/ progression and organizations by some states such as Haryana, and that recruit sports coaches and including them in the framework. physical education teachers to spread awareness on these streams. •• Deliberate on Government policies and work on streamlining PPP models •• Establish common rules on player in sports infrastructure and sports transfers and player management— training, such as monetization plans similar to those by FIFA — to help for all SAI-run institutes. ensure that the sports whose international federations don’t •• Work on additional suggestions for have similar laws may follow these the Sports Bill 2013 or underline on its common rules. This would help bring importance in improving transparency. more transparency and provide impetus to leagues in other sports.

Long-term recommendations for implementation

•• Work towards formulating detailed •• Promote the role of SSAs in the rules on the incorporation of a implementation of PYKKA schemes community-level engagement team, by making it compulsory to establish and a corporate relations team a council of State Government to support MYAS.Work towards, authorities and SSA officials mandating collaboration between monitoring the implementation of NSFs and SAI to jointly train sports such centrally-sponsored schemes. coaches by leveraging their respective Player identities can be mandated knowledge and strengths. for all PYKKA competitions as well. The SSAs could then relay important •• Work on establishment of a information regarding the same to community-level league and elite NSFs. player league. for a major part of the year, for all sports and in each state, •• Prepare guidelines for infrastructure according to the standard rules of the for each sport and mandate respective NSF. improvements in existing infrastructure, and the construction •• Work towards establishing an annual of new infrastructure based on the domestic competition where a team same. This would also help in better from each state — preferably funded packaging events. by the Government and staffed by the SSA based on player performances •• Work towards the implementation — plays throughout the year in of a uniform legal framework to community sports. facilitate effective governance across all leagues. •• Promote legacy planning as a practice before the construction of games •• Propose regulations that the facilities/sports cities and bring to Government can adopt to provide the fore related opportunities to raise relief from the customs duty to awareness among corporate houses. private academies importing sporting equipment. 63 Business of Sports

Table 9: Major stakeholders, their ultimate targets, benefits from investment in sports, and potential benefits to stakeholders from the formation of the JWG

Potential benefits from investment Potential benefits from the formation Stakeholder Targets in sports of JWG

Central and state Socio-economic • Improved fitness levels of India’s • Holistic policy formulation through Governments development of human resource increased awareness of various the country • Economic boost through benefits Government ministries/entities on in inter-related sectors such as the challenges faced by various tourism, education, sports exports stakeholders in the sports ecosystem and retail. • Realising the Government’s vision on • Instill national pride through sports sports by leveraging existing capabilities of other JWG stakeholders. For instance, collaborations with the media to broadcast a nationwide sports campaign.

Sports governing Self- • Increase popularity of the sport • Potential increase in sponsorships bodies like NSFs, sustainability that the respective governing by connecting with broadcasters and SSAs and IOA bodies by organising competitions, keeping corporate organizations abreast leagues and events to become with latest developments/competitions self-sustainable. in the respective sports. • Inclusion of suggestions from sports governing bodies in the formulation of a common governance framework across all sports and collaborations with sports consulting firms to create safety net for players.

Corporate Profitability • Brand building and recognition • Increased awareness among various organizations by reaching out to a significant stakeholders on private sector activities segment of the population, i.e., in various segments of the sports eco- youth system. • Opportunity for business houses • Increased support to corporate houses to diversify into sporting avenues investing in sports through increased such as leagues, merchandise focus on streamlining PPP models, and brands that have a more legacy assets monetization and relaxing prominent youth connect. Government rules on duty.

Media Profitability • Generating more content • Exploring opportunities for increasing to broadcast by investing in popularity and viewership for sports in popularising various sports and India promoting their viewership • Brand building

Other Government Improvements • Supporting the Government in • Support from various stakeholders, agencies/societies in school socio-economic development by especially the Government, in such as NCERT, education, skill investing their human resources implementing a holistic education CBSE and NSDC development and in supplementing vital content and and workforce training policy/plan to training Indian statistics. motivate the youth towards sports youth Business of Sports 64

An analysis of various segments of returns on investment in sports. However, keeping in mind the advent of leagues in the sports ecosystem demonstrates they also indicate the high revenue several sports and an active Indian media the involvement of private players, generating potential of sports leagues. —corporate houses already involved in besides Government bodies and sports Nonetheless, it has been observed that sports should now consider for-profit authorities, albeit in a limited scope and investment in sport provides private ventures in sports such as owning mostly in the form of CSR activities, due organisations with significant social franchises and providing sponsorships to the respective organization’s inherent return on investment (RoI) in terms of to various leagues and tournaments. culture for sports. The business of sports enabling brand recognition and brand Moreover, with CSR becoming in India is yet to pick up steam and this building by reaching out to a large mandatory under the Companies Act could largely be driven by the introduction segment of the population. This is due 2013, business houses are increasingly of more leagues on the lines of the IPL to the high appeal sports enjoy with the considering sport as an avenue for CSR in cricket. Case studies on domestic and youth and the fact that they create brand activities due to its significant social RoI. international events indicate the relatively loyalty by engaging local community long gestation periods of commercial members. Considering this — and 65 Business of Sports

Glossary

ABSC Army Boys Sports Company Scheme

AIFF All-India Football Federation

APA Athlete Personal Award

ASC Australian Sports Commission

BAI Badminton Association of India

BBFS Baichung Bhutia Football Schools

BCCI Board of Control for Cricket in India

CII Confederation of Indian Industry

COX Centre of Excellence

CSR Corporate Social Responsibility

CWG Commonwealth Games

DCMS Department for Culture, Media and Sports, UK

F&B Tax Food and beverage tax

FDI Foreign Direct Investment

FIDE Fédération Internationale des Échecs (International Federation of Chess)

FIFA Fédération Internationale de Football Association (International Federation of Football)

GBA Gopichand Badminton Academy

GDP Gross Domestic Product

GVA Gross Value Added

HI Hockey India

IBL Indian Badminton League

ICC International Cricket Council

ICL Indian Cricket League

IHF

INR Indian National Rupee

IOA Indian Olympic Association

IOC International Olympic Committee

IPL Indian Premier League Business of Sports 66

LNCPE Lakshmibai National College of Physical Education Thiruvananthapuram Thiruvananthapuram

LNUPE Gwalior Lakshmibai National Institute of Physical Education Gwalior

MCT Mittal Champions Trust

MLB Major League Basketball

MYAS Ministry of Youth Affairs and Sports

NBA National Basketball Association

NFL National Football League

NGO Non-Governmental organisation

NHL National Hockey League

NISSM National Institute of Sports Science and Medicine

NOC National Olympic Committee

NPFAI National Playing Fields Association of India

NSDF National Sports Development Fund

NSF National Sports Federation

NSO National Sports Organisations

NSTC National Sports Talent Contest Scheme

ODI One-Day International

OGQ Olympic Gold Quest

PPBA Prakash Padukone Badminton Academy

PPP Public-private partnership

PSU Public Sector Undertaking

PYKKA Scheme Panchayat Yuva Krida Aur Khel Abhiyan Scheme

R&D Research and development

SAG Special Area Games

SAI Sports Authority of India

SEZ Special Economic Zone

SME Small and Medium Enterprises

SOA State Olympic Association

SPAT Sports and Physical Aptitude Test

SSA State Sports Associations

STC SAI Training Centres Scheme

T20 Twenty20

U- Under 67 Business of Sports

UGC University Grants Commission

UK United Kingdom

UKS United Kingdom Sports Council

US United States

USA United States of America

UT Union Territory

VIP Very Important Person

WCP World Class Pathway

WLBSA World Ladies Billiards and Snooker Association

WSH World Series Hockey Business of Sports 68

Definitions

•• Gross domestic product (GDP): Market value of all officially recognised final goods and services produced within in a given period of time.

•• Gross value added (GVA): The contribution of each individual producer, industry or sector to the economy. To obtain GVA, the value of intermediate goods and services is subtracted from gross output.

•• Public-private partnership (PPP): A public-private partnership is a service or venture that is financed and operated through a partnership between the Government and private company/companies.

•• Special economic zone (SEZ): SEZs are geographical areas created with an intention to promote export of products, provide employment opportunities and develop quality infrastructural facilities with minimum possible regulations like exemption on taxes of export income.

•• Corporate social responsibility (CSR): CSR could be defined as actions taken by corporate firms to further a social cause, beyond the business interests of the firm and that which is required by law. 69 Business of Sports

About KPMG in India

KPMG in India, a professional services firm, is the Indian member firm of KPMG International and was established in September 1993. Our professionals leverage the global network of firms, providing detailed knowledge of local laws, regulations, markets and competition. KPMG in India provide services to over 4,500 international and national clients, in India. KPMG has offices across India in Delhi, , Ahmedabad, Mumbai, , , Bangalore, , and Kolkata. The Indian firm has access to more than 7,000 Indian and expatriate professionals, many of whom are internationally trained. We strive to provide rapid, performance-based, industry-focused and technology-enabled services, which reflect a shared knowledge of global and local industries and our experience of the Indian business environment. KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 156 countries and have 152,000 people working in member firms around the world. The KPMG Audit practice endeavors to provide robust and risk based audit services that address member firms’ clients’ strategic priorities and business processes. KPMG’s Tax services are designed to reflect the unique needs and objectives of each client, whether firms are dealing with the tax aspects of a cross-border acquisition or developing and helping to implement a global transfer pricing strategy. In practical terms that means, KPMG firms’ work with their clients to assist them in achieving effective tax compliance and managing tax risks, while helping to control costs. KPMG Advisory professionals provide advice and assistance to help enable companies, intermediaries and public sector bodies to mitigate risk, improve performance, and create value. KPMG firms provide a wide range of Risk Consulting, Management Consulting and Transactions & Restructuring services that can help clients respond to immediate needs as well as put in place the strategies for the longer term. Business of Sports 70

About CII

The Confederation of Indian Industry (CII) works to create and sustain an environment conducive to the development of India, partnering industry, Government, and civil society, through advisory and consultative processes. CII is a non-Government, not-for-profit, industry-led and industry-managed organization, playing a proactive role in India’s development process. Founded in 1895, India’s premier business association has over 7100 members, from the private as well as public sectors, including SMEs and MNCs, and an indirect membership of over 90,000 enterprises from around 257 national and regional sectoral industry bodies. CII charts change by working closely with Government on policy issues, interfacing with thought leaders, and enhancing efficiency, competitiveness and business opportunities for industry through a range of specialised services and strategic global linkages. It also provides a platform for consensus-building and networking on key issues. Extending its agenda beyond business, CII assists industry to identify and execute corporate citizenship programmes. Partnerships with civil society organizations carry forward corporate initiatives for integrated and inclusive development across diverse domains including affirmative action, healthcare, education, livelihood, diversity management, skill development, empowerment of women, and water, to name a few. The CII Theme for 2013-14 is Accelerating Economic Growth through Innovation, Transformation, Inclusion and Governance. Towards this, CII advocacy will accord top priority to stepping up the growth trajectory of the nation, while retaining a strong focus on accountability, transparency and measurement in the corporate and social eco-system, building a knowledge economy, and broad-basing development to help deliver the fruits of progress to all. With 63 offices, including 9 Centres of Excellence, in India, and 7 overseas offices in Australia, China, Egypt, France, Singapore, UK, and USA, as well as institutional partnerships with 224 counterpart organizations in 90 countries, CII serves as a reference point for Indian industry and the international business community. KPMG in India contacts: Confederation of Indian Industry (CII) contacts: Business of

Richard Rekhy K Jawaharlal Sports CEO Director T: +91 124 307 4303 T: +91 124 4014079 (D), 4014060, 4014067 E: [email protected] F: +91 124 4014080 E: [email protected] Shaping a Successful Dinesh Kanabar Innings for the Deputy CEO Rajiv Baluni Chairman - Sales & Markets Executive Officer Indian Sports Industry T: +91 22 3090 1661 T: +91 124 4309443 (D), 4014060, 4014067 E: [email protected] F: +91 124 4014080 E: [email protected] A Report Jaideep Ghosh Partner Management Consulting T: +91 124 307 4152 E: [email protected]

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