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Sports sponsorship grew 19.33% to touch Rs 6,400 cr in 2016

MUMBAI: Demonetisation may have hit overall ad expenditure in 2016 but the sports sector grew at a much faster pace. Led by media spends, sports sponsorship spending grew 19.33% to touch Rs 6,400 crore in 2016 and accounted for 11.5% of the overall ad pie.

Total ad expenditure, on the other hand, grew at 12% to stand at Rs 55,671 crore in 2016.

As has been the case for the last two years consecutively, cricket owned the majority chunk of sports sponsorships, but witnessed a 3% downsize in its overall contribution. Kabaddi saw a massive surge and raked in almost triple the sponsorship than 2015 at Rs 122 crore in 2016, according to a report jointly published by ESP Properties, the sports and entertainment arm of GroupM, and SportzPower.

Media spends surge: Media spends grew 24.63% to Rs 3510.8 crore in 2016 from Rs 2816.9 crore a year ago, according to the fourth edition of ‘Sporting Nation in the Making’.

On air: Spending in sport grew 34.74%, from Rs 1756.9 crore to Rs 2367.2 crore.

  • Cricket was obviously the golden egg laying duck with Rs 1020 crore + net in ad sales revenues for Sony Pictures Network India (SPNI), a good 25%+ over 2015’s numbers.
  • For IPL 2017, SPNI is reportedly quoting spot rates at over Rs 600,000 for its SD channels while for the HD feed it is Rs 200,000 a spot.
  • On the television eyeballs front, IPL’s 2016 season garnered 361 million viewers, as per data provided by BARC. Pertinently, the views not male-dominated, with women
    (41%, including rural) and kids comprising a significant portion of the TVOn Ground Image 11
  • For the first time, there were separate SD and HD sales for IPL in 2016
  • Riding high on sustained interest in IPL from categories like Telecom, Auto and Ecommerce, Sony had 80+brands associated with world cricket’s biggest annual property in 2016.
  • Within Cricket, and excluding IPL, the number of Team India play days was 111. So,
    the total India Cricket days being higher in 2016 vs. 2015 also contributing majorly to Media spends growth.
  • It was also a year when India hosted multiple events of international stature—the ICC World Twenty20, the Kabaddi World Cup and the Junior Hockey World Cup. Host broadcaster Star Sports could pull in Rs 260 crore net on-air ad sales revenues for the sixth edition of ICC’s Blue Riband T20 event.
  • Innovations introduced for World Cup 2015, which saw the first global telecast of
    cricket in 4K and drone cameras above the stadiums, and Star giving feeds in regional languages, were carried forward into the 2016 World T20, which incidentally was the first major ICC event produced by ICC TV.
  • Multiple events of international stature such as ICC World Twenty20, the Kabaddi World Cup, and the Junior Hockey World Cup enabled broadcasters to pull in higher ad sale revenues.
  • Media spending increased proportionately to live content duration which essentially increased in 2016 for all sports
  • The Rio Olympics live broadcast made technology history in 2016 – simulcast on all eight Star Sports channels (four in SD and four in HD), the network’s OTT platform Hotstar’s 14 live feeds and 36 concurrent feeds with over 3000 hours of live coverage for a record 191 million viewers

Non-cricket: If cricket was riding high, non-cricket sports, too, showed healthy growth. Longer live content duration with Pro Kabaddi League, Indian Super League, Hockey India League, Premier Badminton League, etc. helped push up media spending.

However, interest for non-cricket sports properties is resting only within a few categories and among a few advertisers. Wider reach and consistent performance metrics of these non-cricket league properties in subsequent years can help in garnering more spends in future.

Print’s share in sports media spend pie grew by 4% from Rs 840.0 crore to Rs 873.6 crore; and digital by 22.73%, from 220 crore to Rs 270 crore.

Media Spends

On-ground sponsorships:  On-ground sponsorship grew from Rs 1030.5 crore to Rs 1165.2 crore – a steady 13% growth in 2016

  • Kabaddi rode forward like the proverbial dark horse and showed a momentous 154% increase in On Ground sponsorship, thus accruing Rs 74 crore over and above earnings from the previous year due to Kabbadi World Cup and additional season of Pro Kabbadi League
  • Not surprisingly, cricket added Rs 33.2 crore over its numbers in the previous year
  • Three new associate sponsors—Pepsi, Hyundai and Jana Financial Services—together accounted for Rs 1.6 crore in additional revenue per match
  • PWL took a hit allegedly due to demonetisation
  • In other sports, HIL and PBL were the only two sports principally driving on-ground sponsorships upwards by 15%, thus taking the figures to a solid Rs 257 crore, from Rs 223 crore in 2015

On Ground Image 2

Team sponsorships and franchise fee

  • Overall team sponsorship grew by 25.33%
  • Cricket as a sport sprung forward on team sponsorship as
  • compared to the rest of the pack with 51% more matches played in 2016 as
    opposed to 2015
  • As many as 22 new brands tested IPL waters in team sponsorship causing it to
    tumult forward by 9.5% in 2016
  • Football, while trying to stay neck to neck with cricket, instead witnessed a loss from Rs 99 crore in 2015 to Rs 98.2 crore in 2016
  • Sponsors went down marginally for ISL as well with numbers dropping to Rs 37.2 crore as against Rs 38 crore in the year-ago period
  • Kabaddi saw a 45.76% increase in its two-season swing – the highest by any sport
  • Franchise fee pie has remained constant despite additions (TNPL, PBL and two teams in IPL) and deletions (Champions Tennis, Chennai Super Kings and Rajasthan Royals)

The major insight of this report is that both cricket and non-cricket held their own trajectory, and together pushed the industry forward. 2016 also seemed like a make-or-break year for some leagues, with some repositioning themselves to garner greater viewership, while others launching with a hungry audience base. Indian Cricket was on a high in 2016, both on the field and off it.

vinit karnikESP Properties business head Vinit Karnik believes that 2017 is definitely going to gain momentum in terms of the previous year’s high. “The report insights are the key to devising more refined viewer engagement. Gone are the days of male dominance in sports viewership. The year’s biggest chunk of spectators came from women and kids. This is ground-breaking data for brands to take that much-desired leap of faith and traverse new grounds. Cricket continues to be the poster child for sponsorships, and non-cricket sports still have a fair leap to make to match revenue.

“However, it is interesting to focus on the mushrooming of a very defined health and fitness consciousness within the country. Young digital India is breaking barriers and creating new records especially when it comes to live feeds. Their smartphones are their all access pass to the insider world of sports, sportsmen and their strengths and weaknesses. Sports start-ups are trending and the success achieved by league-based events across multiple sports indicates a strong potential to consume sports other than cricket.”

Thomas Abraham“Viewership data demographics have been an eye-opener in 2016. Demonetisation disruptions aside, 2016 was a great year for the industry and this year will be even more so. Team sponsorships may have experienced certain upheavals and newer leagues will change the sporting diaspora even more so this year. However, what remains to be seen is franchise sustenance, endorsement rates and the manner in which technology and data influence these numbers. We expect 2017 to only get bigger, not just on the back of growth from the leagues that are now up and running, but also from new kids on the block that are debuting in the year—Table Tennis being a notable one,”  emphasises SportzPower co-founder Thomas Abraham.