What happens when the world’s second-fastest growing economy of 1.2 billion people goes crazy about a sport invented in the faraway land of its former colonial masters centuries ago?
You get a potent mix of sport and money: welcome to cricketonomics.
If you still have any doubt – like many – that England is where cricket rules from, think again.
As Mahendra Singh Dhoni’s Team India gets set to meet Kumar Sangakkara’s Sri Lankan boys in the final of the ICC World Cup in Mumbai, it is clear that India is the new hub of global cricket, aided by money, marketing and management.
With eyeballs in an estimated 140 million cable, satellite and terrestrial TV homes — roughly 700 million people in them — share their passion to watch the men in blue, as a pure branding exercise, cricket provides the widest possible single field for marketers. That is why space in almost everything from the scorecard to the sightscreens were up for sale during the 40-day tournament.
Understandably, official broadcaster ESPN-Star Sports (ESS) has jacked up the spot ad rates to a record level.
A 10-second ad-spot on the channel during the match will cost between R25 lakh—up from R18 lakh during the semi-final matches.
“The channel approximately has 8000 seconds for advertisement telecast and is slated to bag over R200 crore from the final match alone,” said a media buyer, who did not wish to be identified.
Some experts, however, said advertiser interest in the final may be less than the India-Pakistan semi-final clash.
“The sweetener has already been delivered during Indo-Pak clash. It will be a real challenge for advertisers that on what basis they should pick the finals,” said Sai Nagesh, executive vice-president, Dentsu Media.
“The semi final between India and Pakistan was not just a match. And I doubt, the TRPs (television rating points) reached during the clash will be reached or crossed this time,”said Basab Dutta, CEO, Madison India.
Whatever the detail, the backdrop of the final delivers a thumping message on India’s emerging sporting prowess.
The size of India’s economy would grow to $2 trillion (R90,000 crore) in 2011-12 and the country will join the elite league that comprises the US, Japan, Germany, China, UK, France and Italy as the mass of economic activity shifts to Asia.
Importantly, it is the by far the fastest growing economy in the cricketing world. India’s economy is forecast to expand at between 8.75 and 9.25% in 2011-12, despite high inflation that is keeping credit costly.
John Hawksworth, chief economist at consulting firm PricewaterhouseCoopers, UK said in a report titled “World in 2050” released last January that China and India will see a return to their “historical norm” that existed before the Industrial Revolution of the 18th and 19th centuries that moved global economic power to the West.
India now has 55 US dollar billionaires on the list of the world’s wealthy published by Forbes magazine. The number of so-called “high net worth individuals” — dollar millionaires — in India has grown at about 11% every year since 2000, to more than 1,15,000 at present.
A game called money
As affluence surges, so does sports, it would seem from the rise of the Indian Premier League (IPL) the Twenty20 cricket tournament fashioned on the lines of football’s English Premier League.
This “cricket as showbiz” cocktail of sports, Bollywood and global management strategies saw stadiums full despite seats going for as much as $1,000 (R45,000) a piece in a nation in which two-thirds of the population lives on less than two US dollars a day.
From a purely Return on Investment (RoI) perspective, the enterprise values of each of the 8 IPL teams have more than doubled in three years.
Consider this: the winning bid price for the two new IPL teams was $373 million and $333 million respectively, which is more than three times what the highest priced team — Mumbai Indians — fetched ($111 million) three years ago.
Sporting growth is seen closely linked to consumer growth.
That sets the ground for sports as an industry. If recent moves are any indication, it may not be limited to cricket. Reliance Industries Ltd has inked a deal with IMG to build sport infrastructure and set up sporting academies such as the Nick Bollettieri Tennis Academy, while the Mahindra group has signed up with US’ National Basketball Association to set up a community basketball league in India. Real estate majors such as DLF and Jaypee are investing in golf courses.
(With inputs from Himani Chandna Gurtoo)