New Delhi: Sports sponsorship growth has slowed to 14.1% in 2017 from 19.3% in the previous year because of fewer major sporting events and economic disruptions such as the introduction of goods and services tax (GST).
The findings are a part of a report jointly published by GroupM ESP, the sports and entertainment arm of GroupM, a media buying agency that is part of WPP Inc., and SportzPower, a sports business news company. The overall sports sponsorship market stood at Rs7,300 crore in 2017 from Rs6,400 crore in the preceding year, the report released on Wednesday in Mumbai said.
Media spending dominated sports sponsorship commanding 55% of the overall spends followed by on ground sponsorships. While cricket continues to charm viewers and advertisers, football outpaced kabbadi to emerge as India’s second biggest sport by participation and attendance. Along with eyeballs, the game also churned revenue with on ground partnership growing by a massive 63.8% to Rs179 crore from Rs110 crore in 2016. The upswing can be attributed to the Fifa Under 17 World Cup, which successfully pulled over Rs40 crore worth of ground sponsorship money, along with Hero MotoCorp renewing its Indian Super League (ISL) title sponsorship for Rs38 crore, up from Rs18 crore it paid in 2014. While football’s on-ground partnership grew, Kabbadi’s slipped from Rs122 crore in 2016 to Rs114 crore in 2017.
“In 2016, there was a Kabbadi World Cup and because of that the revenue of the kabbadi league was high. With any additional sporting event, revenue (both sponsorship and media spend) goes up. We have to look at this year’s report from the absolute numbers standpoint and not just go by growth percentage," said Vinit Karnik, business head, GroupM ESP.
In 2017, ground sponsorship grew to Rs1,337 crore from Rs1,165 crore in the previous year, team sponsorship across leagues and tournaments rose from Rs700 crore to Rs819 crore and franchise fees went up from Rs548 crore to Rs684 crore.
Overall, ad expenditure growth rate for sports events slowed to 15.8% in 2017, according to the report. Overall media spending stood at Rs4,065 crore in 2017 from Rs3,511 crore in the year earlier. The popular Indian Premier League itself attracted over Rs1,200 crore of advertising.
2017 also saw the inception of five new franchise based leagues in India—Ultimate Table Tennis (UTT), Super Boxing League (SBL), Super Fight League (SFL), Cue Slam (Indian Cue Masters League) and P1 Power Boating. Brands are bullish about investing in emerging sports; the report stated that 25% increase in franchise fees came from developments in other sports, as cricket remained unchanged. Thirty-six new franchises were added across all new and existing leagues last year.
In terms of brand endorsement deals, endorsement value dropped 16.8% in 2017 to touch Rs395 crore from Rs476 crore in the previous year. Virat Kohli emerged as the star endorser with his brand value soaring over Rs150 crore with 19 brands in his kitty. P.V. Sindhu was the only non-cricket endorser who stood out with her brand value doubling from Rs12 crore in 2016 to over Rs30 crore in 2017 with 11 brand deals.
“The report rightly highlights that cricket is not the only sport which brands are looking at. When it comes to sponsorships and endorsement deals, PV Sindhu, Mithali Raj and Pankaj Advani are coming up in a big way," said Tuhin Mishra, managing director of sports marketing firm Baseline Ventures.
“Leagues with sustainable economic model and high-quality sports performance will thrive. 2018 will be a great year for the sports industry with all eyes set on how the Indian Premier League fares in the new avatar and also the new leagues which have the potential to take off in a big way," he added.