Sports like basketball & football aren't attractive investments but their potential has lured corporates. Abhijeet Kulkarni writes.sports Updated: Dec 25, 2010 23:40 IST
The history of non-cricket sports in India is littered with sad tales of athletes living and dying in penury, stories that have often stopped youngsters from taking up Olympic disciplines. But now national federations that had to go begging to the government and private bodies are suddenly being inundated with offers from a robust corporate world that is waking up to the potential commercial value of sports in India.
It all began as commercial deals with a few popular athletes who are doing well on the international circuit. But the formation of IMG Reliance - a joint venture between Reliance Industries and the International Management Group Worldwide - which plans to set up modern infrastructure and coaching facilities, bring sponsorships and TV deals, is fast changing the rules of the game.
Formed this March, IMG Reliance (IMGR) will identify talent and provide training in IMG academies in the United States while forging long-term partnerships with the national associations to create infrastructure. They began by signing a 30-year commercial rights deal with the Basketball Federation of India (BFI). This month, they inked a massive Rs 700 crore, 15-year deal with the All India Football Federation (AIFF) that was a huge indication of what the corporate thinks about where Indian football is headed.
Big-time corporate forays into sports management is only a logical next step of the economic surge witnessed in the last decade. While it is a sure-fire bet to improve company image, at the same time increasing interest of a young and empowered Indian populace beyond cricket means that other sports have become attractive investment opportunities.
Explaining the rationale behind long-term deals, Executive Director of IMGR, Andrew Wildblood, said: "You can't create value in sports through short-term agreements."
Though the joint venture is a part of Reliance Industries Corporate Social Responsibility initiative, both IMG and Reliance are business houses and would not be pumping in money if they had not mapped out the commercial potential. The successful launch of the Indian Premier League in 2008 should have made decision-making only easier.
Wildblood says: "If we don't have the security of long-term partnerships then we can't invest in short-term. We also need to be convinced our interests are protected. But like any other business we are willing to invest before we count the gains. The money we are paying to AIFF and BFI is not in return for their existing value, which is the norm in any (normal) sponsorship deal. We are paying them for the potential value that we will work to create in the future," added Wildblood. The company is also in talks with a few more federations.
Focus on grassroots
The All India Tennis Association and the Professional Golf Tour of India are also working with IMGR to scout talent across the country and send players for training in the US-based IMG academies. A group of budding sportspersons - 16 sub-junior footballers, five tennis players and eight basketball players - are already training at the Bradenton centre in Florida and the Nick Bollettieri Tennis Academy. IMGR is also looking to set up similar academies in India. "I won't like to set any deadline because in India things take time to take off. But once you roll out then the progress is accelerated," Wildblood said.
Huge untapped potential
While IMGR seem to be the first off the blocks, the attitude of other corporates is also changing in the wake of India's successes in the Asian Games and the Commonwealth Games that has built on the three medals won at the 2008 Beijing Olympics.
The Jindal Steel Group has reportedly promised to spend Rs 200 crore to refurbish football stadiums in Kolkata and Bangalore while the Mahindra Group has forged a partnership with the National Basketball League (NBA) to promote the game at the community level. Mahindra dissolved its impressive I-league club at the end of last season but now wants to help build a sports culture that can eventually become commercially viable.
"We feel that in the chain of sports development, this is one of the most important links," says Muffaddal Choonia, GM Corporate strategy, Mahindra Group.