• Opportunities

You remember the time when parents asked you to stop playing and get back to your books? Well, that time is truly over. For good. ’Cause sports in India means big money and if you get going as a capable athlete, you can set high goals for yourself. But that is just the talent side of Indian sports.

For businessmen and entrepreneurs, the Indian sports sector is going to go through the roof with global events like the Commonwealth Games later this year. From infrastructure to athlete management to merchandizing, the opportunities are endless for them to explore as other events like the Cricket World Cup in 2011 roll in. And they surely have to thank the Indian Premier League (IPL)  for this.

The first real attempt to marry sports and business, the IPL has created an exclusive market around it. With a franchise system that ensures that there is a team in almost all parts of India (with more being added every two years), it has also ensured that there are localized opportunities, which smaller players can tap as well as replicate for other non-cricket events. And yes, make truckloads of money along the way.

Ticketing
In recent memory, it is hard to find any sporting event that has been played to packed houses like the IPL has. With a franchise system that tries to emulate the club culture of the Western football leagues, emphasis has also been to make sure that fans throng the stadiums. One of the ways to do that has been to move away from the archaic stand-in-a-queue-since-dawn system and move to seamless ticketing channels.

An obvious recourse has been moving to mobile and online ticketing. Neetu Bhatia, CEO and Co-founder of Kyazoonga, an online ticketing portal with a focus on sporting events, tells us how the first edition of the IPL saw a huge rush for tickets online. “We were handling the ticketing for a couple of franchises [Mumbai and Delhi] in the first edition,” she tells us. “In some instances, our tickets would be sold out in the first four hours of them being available. The obvious ease of ticketing was definitely a factor here.” There is also a market in mobile ticketing, says Dan Devitt, of Dassler Business Intelligence, a Mumbai-based research firm focusing on mobile payments.

“Booking tickets on the mobile is big in the West with leagues like the NFL and NBA,” he says. “The only extra effort [needed] here in India would be to devise a process where even the most basic handsets could also participate in this process.”

Besides the above, franchises are also known to be interested in offline ticketing models where tickets could be sold through well-known local establishments like in Ahmedabad, where tickets for matches at the Motera stadium were being sold at well-known general stores. Estimates made by independent experts indicate that the ticketing market for each franchise could top Rs.5 crore per season currently.

Merchandizing
With any league that is based on a club culture or one that wants to develop a club culture like IPL attempts, merchandizing is a valuable tool to do so. It’s a loyalty generator rather than a revenue generator. And for that reason, franchises are ready to spend big and wide for merchandizing solutions.

Utkarsh Singh, Head, Business Development for the Rajasthan Royals, tells us that merchandizing is vital to the franchises’ plans and that out-licensing is the way such an exercise would go. “Merchandizing could range from products such as music, clothing, accessories etc. Ideally, franchises would look at well-established retailers for licensing their brand too in order to keep the brand experience for the customer at an acceptable quality.”

However, this is not to say that local and startup players cannot tap this. “The league is going to get bigger and the spread wider,” Singh adds. “The opportunities thus would only increase.” And there is evidence of that too. eYantra, a brand merchandising and corporate gifting solutions company, has tied up with IPL team Kings XI, Punjab for its sports merchandising needs. Having just secured a second round of major funding, the company expects the deal to strengthen its portfolio and translate to sizable revenues.

And just recently, SPORTXS, a Bengaluru-based multi-brand concept store, inked an agreement Puma and Adidas to sell merchandise of all eight IPL teams. So when the IPL expands to cities like Dharamshala and Guwahati, local entrepreneurs would do well to get their game on. Especially manufacturers of T-shirts, backpacks, key chains, fan caps, water bottles and wristbands. Especially since the merchandizing pie at the moment is estimated to be around Rs.70 crore annually per franchise.

Security
Sadly, bigger the event in India, bigger is the threat from extremists and terrorists looking to catch eyeballs. Given that conducting the IPL is such a huge exercise, even the Indian government shied away from providing state security when it had to allocate resources for the elections last year. The resulting fracas saw the IPL shifting out of India to South Africa.

But where the government fails, there is always an opportunity for entrepreneurs. This year too, threats from extremists almost put paid to the league’s hopes. To reassure players and team owners, the IPL hired Nicholls, Steyn and Associates, a South Africa-based security agency, this year to look after player security. The agency was also in charge of security of the IPL when it was held in South Africa last year.

“I think the event in Pakistan [when the Sri Lankan cricket team was attacked by terrorists] has proved that cricket can never be safe again,” says Bob Nicholls, founder of the agency which has also arranged security for cricket’s World Cup and Champions Trophy before. “It’s a high stakes event and so big that state agencies are obviously overstretched. So, there is a need for efficient and private security.”

And state agencies will be again overstretched when the IPL, which has already expanded to Kochi and Pune, will expand to more cities. The need for security will throw up a big opportunity for private players. While Nicholls declines to talk about financials in this case, he does point out that the IPL’s security budget has already gone 10 times over since the first edition and “should continue to grow”. How big is the market when can only be determined by how high are threat levels then, he adds.

Stadium Services
As talked about before, the success of the IPL is very much based on how much of fan loyalty and a club culture can they develop. With no fan base, breaking even for the team owners and other investors in the league is bleak. No wonder then that the stadium experience is so important for team owners.

Rajasthan Royals’ Singh tells us that providing a quality stadium experience is an extension of the brand experience and integral to franchise owners’ plans: “If fans have a bad experience watching a match, it hurts the team and the franchise as much. Watching a match has to be a top quality event and thus stadium facilities need to be in perfect shape.”

And because of that there are opportunities galore in providing such a stadium experience. For example, cleanliness in stadiums (so often a bane) throws up a viable opportunity. In charge of waste disposal for the IPL matches in Delhi in the first edition was the Delhi Waste Management Ltd (DWM). An engineering construction firm, DWM also carries out waste disposal at the Hyderabad and Delhi International airports.

“The company is in charge of disposing the waste collected through recycling at composts or dumping the non-renewable waste at landfill sites,” said Kishore Thakur, COO, DWM. Though it did not benefit directly from the garbage disposal since the stadium came under the ambit of the contractual agreement it has signed with Municipal Corporation of Delhi (MCD) for waste disposal, additional garbage means better revenue from the recycled waste.

Others like Delhi-based Rama Tent House, which provides the seating infrastructure at the IPL matches in Delhi, have benefited directly. “The association with cricket started after we worked for Delhi and District Cricket Association (DDCA),” said Vijay Kumar Batra of Rama Tent House. “DDCA was satisfied with our services and referred our name to GMR (Delhi Daredevils’ Owner).” IPL’s first edition matched the previous international events in terms of standard but Batra anticipates expectations to be much higher further on. “It was a learning experience last year and in terms of infrastructure support the event needs, it is a big business opportunity,” Batra says.

Gaming
The gaming world is throwing up an interesting opportunity for entrepreneurs, especially those from an IT and programming background. IPL-based games are a rage currently and are expected to create a niche money spinning market. The first moves have been made. Vishal Gondal’s Indiagames has managed to get the exclusive gaming rights for the third season of the IPL and the response to their first game, T20fever, has been enormous.

In fact, the game’s iPhone version is one of the most downloaded apps on Apple’s iTunes store. Indiagames has taken the game across social networks and expects to launch a version for the iPad later. Thanks to the franchise system, games are being launched for franchises. Also, new games are being launched which take on the excitement being created by cricket but do not directly associate with the teams. One such game is Dream11.com that explores the genre of fantasy cricket.

A flagship brand of  Mumbai-based Dream11 Gaming Pvt Ltd, the site boasts of 4.5 lakh users and is growing fast. How big is the market is anybody’s guess, but considering franchises would like games to be an extension of their brand, it will take a decent bite out of the potentially Rs.70 crore merchandizing market.

©Entrepreneur April 2010

Tags:
Bob Nicholls, Commonwealth Games, corporate gifting, cricket, Dan Devitt, Dassler Business Intelligence, Delhi Waste Management, DMW, Dream11, eYantra, Gaming, garbage disposal, Indiagames, IPL, Kishore Thakur, Kyazoonga, Merchandizing, mobile payment, Neetu Bhatia, Nicholls, Rama Tent House, security, services, SPORTXS, stadium, Steyn and Associates, Ticketing, Utkarsh Singh, Vijay Kumar Batra, Vishal Gondal