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OCTOBER 9, 2005
 Cover Story
 Editorial
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 BT Special
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Changing Equation
Mid-rung Indian pharmaceutical companies such as Lupin, Torrent, Strides Arcolab and others are looking at global acquisitions to bolster their product portfolios and growth prospects. Will the strategy pay off?


State Of Apathy
Lesson from Mumbai: India's cities are dangerously ill-prepared to tackle nature's fury. Here's what India's CEOs think of her urban hell-holes.
More Net Specials
Business Today,  September 25, 2005
 
 
BT SPECIAL
A Nation's Progress: Engineering To Sport

Middle-class India's obsession with education fuelled the great Indian IT boom. Increasing affluence is now fuelling the creation of a sports-minded nation.

Tomorrow's stars? Kids practise at the DLTA courts in New Delhi

$10 billion. Rs 43,000 crore at the then exchange rate. That was the value Fortune magazine put on hoop-meister Michael Jordan's contribution to the us economy. It also put him on the cover of the magazine. That was way back in 1998. Sure, the calculation included sales of clothing and footwear lines that were either named after or endorsed by the man, but $10 billion is a lot of money (and 12,192, the number of baskets Jordan has scored in his lifetime in the NBA, is a lot of baskets).

The number is significant because it is about the same value this magazine puts on the size of the sports market (leaving out sales of products endorsed by sportspeople, but including pretty much everything else) in India by 2010. That's five years from now, and if the number still looks like an exercise in inspired extrapolation (it isn't and is actually based on sound math and plain common sense) blame it on the Indian psyche. For instance, were the estimate to be about the size of the offshored Indian it services industry and were this magazine to say $80 billion (Rs 3,52,000 crore) by 2010 (the actual number, according to India's software lobby nasscom will be $48 billion or Rs 2,11,200 crore) no one would have any problems accepting the number. That's because India is an it nation. Not a sporting one.

It's one thing to look at the size of a nation's population and economy and derive the ideal 'sporting-quotient' for it, something similar to what audit firm PricewaterhouseCoopers did before the Athens Olympics (the study showed that India should win 10 medals; see A Sporting Nation...). It is another to realise that the way Indians look at sports is changing, something that could eventually result in an Indian winning Wimbledon or earning a podium-finish in f1, and something that will definitely mean that the sports economy grows beyond this magazine's Rs 40,000 crore projection by 2010. "In our current culture of consumerism and self-assuredness, sports are kind of becoming a make-me-feel-good-about-myself thing," says Santosh Desai, President, McCann Erickson. Sports is still far from being a way of life in India, unlike in Australia, where an average household spends upwards of 10 per cent of its monthly household budget on the pursuit of sports, perhaps every kind known to man and more. But what is important is that the very idea of sports in India is morphing from mere entertainment (huge television audiences) and enchantment (the culture of the sports celebrity) to also become an attractive activity and indulgence, if not a serious career option as yet, for the affluent middle class in India, a good 40 million households across the country. "Indians are realising the importance of giving their kids a well-rounded and healthy upbringing and, therefore, you see lots more kids on tennis courts and more men on golf courses now," says Ravi Krishnan, CEO of sports marketing company IMG India. With obesity amongst middle class Indian kids taking epidemic proportions, smart parents are pushing their kids towards outdoor sports as means to expend those extra calories.

THE RS 40,000-CRORE OPPORTUNITY
By 2010, that's how big the Indian sports economy could be.
COACHING: Today, around 10 million Indians spend an average of Rs 2,000 a month on tennis, cricket, swimming, squash, or basketball classes for their children. That's Rs 24,000 crore a year. Even conservatively, that number would grow to Rs 30,000 crore by 2010

BROADCASTING: Today, sports broadcasting is a Rs 600-700 crore industry; by 2010, even if nothing changes, it would be a Rs 1,500-2,000 crore one. However, pay-per-view, broadband and non-television broadcasting could change everything and the industry could well be worth Rs 5,000 crore by 2010

ENDORSEMENTS: A mere Rs 150-200 crore worth today, things will change once India is represented in the top 10 in the really rich sports, tennis, say, or golf. Maria Sharapova, for instance, makes around $20 million (Rs 88 crore) from endorsements. By 2010, then, this slice of the pie could be worth at least Rs 1,000 crore in India

TICKET SALES: Across sports, this is an insignificant statistic in India right now. The English Cricket Board made £5 million (Rs 39.5 crore) from the sale of tickets for the recently concluded Ashes 2005 test series. If any professional league, either in football, or hockey, even cricket takes off in India in the next few years, it would contribute significantly to revenues from ticket sales

TITLE SPONSORSHIPS: Linked to the success of a professional league in any sport, this too, could contribute significantly to revenues

Source: All figures are BT estimates with inputs from industry players
Do Economically Developed Countries Do Better?
It would seem so; should India be happy?
Though sporting success has a kind of correlation to a country's population and more so, to economic wealth, the correlation is far from simple or straight. For it is in fact developed countries, and those belonging to the former Soviet block and China, that tend to punch above their weight at most big international sporting events such as the Olympics. "Sport it seems is one area where a planned economy can succeed," says a PricewaterhouseCoopers report (published: 2004), titled Modelling Olympic Performance. And other unquantifiable invariables, like relative levels of state and corporate funding, hungriness for success, attitude and genes play a crucial role. So what explains India's dismal performance relative to its economy, for according to the same PwC report, it should have come home from Athens with 10 medals, not just Rajyavardhan Rathore's sole silver? "As people, we're not competitive. And till now the incentives for doing well in sports were minimal," says sociologist Ashish Nandy.

On A Cusp, And Prayer

 

Rahul Dravid: #2 today

"The very idea of earning a living through sports is alien to us, but it's changing," says sociologist Ashish Nandy. That's because, as a nation and people we are close to an inflection point where we are becoming less paranoid with our concern for the future, partly because a whole new generation has grown up working in a post liberalised economy. Today, these individuals are in the 30-45 age group (that would mean they were 15-30 years old when India decided to throw open its economy). They have benefited from an explosion in livelihood choices and salaries. They have learned to celebrate consumerism, not denial. And (thanks to TV) they have watched young Indians falteringly make their way to the top echelons of their chosen sport. "And that's when the only-good-education-brings-success-in-life thing gets to loosen and the feel for nurturing natural talent (in sports, for instance) rises up the ladder," says McCann's Desai.

A Career Choice
Nike Bhupathi Tennis Village's C.K.G. Bhupathi: 14 it is

When do you take the call to pursue a game you are good at as a career option? According to C.G.K. Bhupathi, who runs the Nike Bhupathi Tennis Village on the outskirts of Bangalore (he is the father of Mahesh Bhupathi, probably the best tennis-doubles player India has ever produced), the magic age is 14. "From the age of seven to 14, they train really hard and essentially pull a double shift almost every day," he says, looking at a batch of students, "combining the rigours on the court with their academic requirements." With sports just beginning to emerge as a viable career option, however, it still doesn't make sense to focus exclusively on sport (unless you are very very good or very very rich or, ideally, both). That's because of the limited opportunities that exist, says Anirban Blah of Globosport, a sports management firm promoted by Mahesh Bhupathi. He points to the case of Shikha Uberoi, ranked 125 in the world and seen as another rising star, who "continues to struggle in terms of sponsorship".

Not entirely, though. For, although aspirations and the amount of money people are willing to spend on sports (typically on lessons for their wards) have soared, infrastructure, both physical and marketing, haven't kept pace (see The Business Of Sport). If there are any heroes in this story, it has to be the parents who perform a variety of roles ranging from sponsor and cheerleader through ball boy and chauffeur to coach and when the chips are down, motivational speaker. "My parents have sacrificed a lot for my sake, right from the time in school when they had to cart me around for practice to my dad helping with my finances," says Joshna Chinappa, the world's #2 squash player in the junior league. And when Aaron D'souza, now all of 13, showed promise in swimming, his father, Agnel D'souza, packed up everything and moved the family from Mumbai's Thane district (where full-size pools are non-existent) to Bangalore and the expert coaching at Basavangudi Aquatic Centre, a place that shot into limelight when the world discovered that the Millet sisters, Nisha and Reshma, the brightest stars on India's swimming horizon for some time, had trained there. "We did well in it because Indian parents were willing to sacrifice everything to see their kids succeed in engineering. We are now beginning to see some kind of societal momentum building up for sports," says Anil Khanna, Secretary General of All India Tennis Association (AITA). "I have been in the tennis coaching business for over 17 years now, but the change in parents' and kids' attitude has been phenomenal over the past one-two years. Now they're coming in droves. The business for people like me is booming," adds Shekhar Menon, who runs Shanti Tennis Academy in New Delhi. AITA has set itself a target of producing 100,000 certified tennis coaches in the next four-five years, up from under 10,000 currently. It has also woken up to the fact that hundreds of tennis academies are mushrooming across the country and is in the process of commissioning a count to facilitate regulation and promotion.

Cricket Nation
Blinkers or not, our obsession for cricket is enduring.

It's a simple case of a good product and great marketing. "Cricket perhaps is the single largest cultural product consumed in this country," says Santosh Desai, President, McCann Erickson. It is also the single largest builder of our national identity, perhaps even above our (mutual) animosity with Pakistan.

Little wonder, then sports television rides on Indian cricket, with over 80 per cent of the total Rs 450 crore sports advertising spend (2004) going to cricket; in viewership terms, cricket accounts for 70 per cent of all sports eyeballs. And cricketers are only celebrities who walk shoulder to shoulder with film stars, both on popularity and earnings. "For any sport to become a success, you need icons whom media can hype," says L.V. Krishnan, Head of television monitoring agency, TAM. For all the glamour associated with tennis, and Sania Mirza notwithstanding, can anyone still think of making a Hindi blockbuster based on any other sport, but cricket, as Aamir Khan did with Lagaan (left)? This is something that non-cricket sport federations need to understand as they set out to promote their disciplines, something that the Board of Control for Cricket in India (BCCI) realised a long time ago.

Yet, it is only at the international level that cricket has any appeal, for players, broadcasters, advertisers and the like. "BCCI is the richest cricket body in the world. It can easily support 50-60 academies to tap talent in small towns and villages," says Navjot Singh Siddhu. That it can.

Cause And Effect

Everything has a role to play. Broadcasters and marketers will rush to cover and sponsor events where Indian sportspeople do well, and, in turn, this coverage and interest will spur others to take up the sport. Sports broadcasters, such as ESPN star Sports and Zee Sports, are picking up and repackaging-for-TV sports such as hockey (Premier Hockey League; see The PHL Experiment) and football that were once considered too insignificant to cover in the Indian context. And Sania Mirza's fourth round appearance against Maria Sharapova at the us Open, says former world billiards champion Geet Sethi, will "be a big subconscious booster for a whole generation of Indian tennis players, especially women".

Children Of a lesser God?
Not really, but it isn't quite cricket.
The new ambassadors: Fast, driven, and on target, but will marketers bite?

Cricket still comes in first, but there seems to be a fatigue setting in for cricketers, and therefore openness for other sports," says Latika Khaneja, Director of Collage Sports Management, on changing corporate attitudes towards sponsoring other sports. It helps that non-cricket sportspersons, Sania Mirza (tennis), Arjun Atwal (golf) and Rajyavardhan Rathore (shooting), are winning international tournaments. Khaneja has already roped in Sahara and Hero Honda for Rathore, at Rs 75 lakh a pop, significant numbers even by cricketing standards. That it isn't always a case of happily-ever-after is evident from the case of long-jumper Anju Bobby George who is, as this magazine goes to press, in India, trying to raise some of the Rs 55-60 lakh she needs to continue to compete in the international circuit. "Indian companies looking at going global should sponsor (Indian) golfers in the USPGA," says Ravi Krishnan, Managing Director, IMG and TWI for India and South Asia. That's a thought. After all, if Accenture can get Tiger Woods for its campaign, why can't Infosys, TCS, or Wipro sponsor an Atwal or a (Jyoti) Randhawa?

Read in the larger societal context, the question of the business popularity of cricket versus other sports, in terms of broadcast or endorsement money, is actually irrelevant. "In sports, success and popularity loop into each other," says B. Narayanswamy, Director of Indica Research. In cricket it was India's victory in the Prudential World Cup 1983, and the presence of icons such as Sunil Gavaskar, Kapil Dev and Sachin Tendulkar that made the sport an Indian obsession. Such icons are emerging in other sports now, and, surprise surprise, some of them are actually going out and winning events.

Maria Sharapova: Her 2004-Wimbledon win set off the rush

"Sania's success, though ephemeral, will certainly prop up tennis as popular culture," says sports writer and sociologist Ramchandra Guha. Last year, according to media monitoring agency tam, the average viewership of a Formula 1 race was 0.1; this year, with India's Narain Karthikeyan in the fray, the number has increased to 0.3, a jump of 7 lakh households. "Globally, celebrity and celebration have become the core value of sports," says McCann's Desai. With celebrities arriving, though belatedly, marketing across sports federations and broadcasters getting slicker, and consumer mindsets and purse strings loosening, the party for sports for India has just begun.

 

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