Playing in the big leagues

A first-generation entrepreneur, Amit Mavi, who established a real estate development company in 2007, is banking on the Indian Badminton League (IBL) to put his brand in the spotlight. Mavi, who founded real estate consultancy BOP Ltd and owns Bangalore franchise Banga Beats, believes this is a great branding opportunity for his company.

“We always wanted to invest in sports which are inclusive, like badminton. We also plan to build badminton and tennis academies within our townships that we will sell to our clients. I would prefer putting money into something that engages with the audience, rather than ads in print and TV,” he says. After all, real estate firms are leaving no stone unturned, be it signing on Maria Sharapova as brand ambassador or co-branding with Disney to sell its offices and flats.

But for PVP Ventures’ founder Prasad Vara Potluri, an entrepreneur and film financier, foraying into sports made perfect business sense. “We have been associated with films and entertainment as financiers for some time, so sports was a natural extension and led us to own Hyderabad Hotshots at the Indian Badminton League. Everyone in India, at some point of their life, has held a badminton racket and it has a great connect with audience,” he says. This is not PVP’s first attempt to get into sport; it had also bid to acquire the beleaguered Deccan Chargers at the Indian Premier League (IPL) in the past.

Be it glamour or the business opportunity it affords, India Inc is not shying away from putting big bucks in sports. While IPL for cricket was just the start in 2008, five years later there is a flood of leagues trying to replicate its success. From Hockey India League to Golf Premier League to the latest entrant, Indian Badminton League, name a sport and there is someone out there attempting to launch a league. Reliance-IMG is learnt to be trying to sew up a new football league, while the much-hyped Machdar Motorsports-backed motorsports league has not yet seen the light of the day.

Shailender Singh, Joint Managing Director, Percept India, says, “Owning a team is trendy. It’s like everyone who has the money has the dream of either being able to support a sport or make a Bollywood movie. It’s the glamour that woos people.”

But glamour is just one aspect of it. “India has a fast growing young population and companies need to build a youth connect. They can do it either through music, movies or sports,” he adds.

The league format also has other advantages. The fact that the leagues are not run by government bodies and face little political interference gives corporates and entrepreneurs confidence to invest in them and hope for returns.

Vinit Karnik, Head of Sports and Live Practice at Group M ESP, which has advised companies on sponsorship deals in IPL, said, “The concept might be new to India. But in the US and other countries, sports have always evolved with the help of the leagues. I don’t think everyone is trying to replicate IPL, every game has its own audiences and structure and will have to leverage them.”

Karnik believes it is the sense of ownership of a team that has led promoters of business firms and entrepreneurs to put their money more likely in personal capacity rather than through their companies.

So for a league to be born, is it all about tweaking a sport, launching it in a shorter avatar and getting some corporates to put in the money?

Not really. From wooing international stars to come and play in India to getting a sporting channel to buy telecast rights to making the league financially viable, there are many pieces that need to be put in place.

Neeraj Sareen, co-founder of the Golf Premiere League which saw its inaugural season in February being played this year, says a lot goes into organising a league. “Having Shiv Kapur as the co-founder of the Golf Premier League helped in convincing the international golf stars to take time out from their tight schedules to come and play. Also, getting a sports broadcasters like Sony Six, which is also the official IPL channel, to do a live telecast, helped,” he adds. Sareen and Kapur took about two years to conceptualise the league and believe it will take 3-5 years for the franchisees to break even. “With the next Olympics not being very far, we hope a star from the golf league wins it for India,” he adds.

Indian Badminton League’s commercial partner Sporty Solutionz too has gone all out to make it a success. If Ashish Chaddha, CEO of Sporty Solutionz is to be believed, the Indian Badminton League has managed to strike a cool deal with Star Sports for the first season.

After all, live television contributes the biggest chunk of the revenues for the central pool which is shared with all the team owners in the franchisee model. In addition, if a league has international stars, striking international broadcast deals become easier; this means additional revenues for any league. Also, with badminton courts in India having very little seating capacity, ticket sales’ contribution will be minuscule.

“The value of media rights for a badminton property is usually nothing much to talk about in India. But for IBL’s first edition, we have managed to sell our media rights for figures that are unheard of for badminton tournaments globally,” says Chaddha, without giving specifics. IBL has managed to rope in Vodafone as the title sponsor; other key brands such as Pepsi have also come on board as pouring partners.

So why will brands invest in badminton? “Badminton is watched and played by people who have disposable income. Though one cannot compare it with cricket … for brands which advertise on cricket for a consumer product, for instance, the conversion will be just 5-10 per cent. But we believe badminton has a different kind of audience,” he said. Franchisees who had to pay a minimum of Rs 3.5 crore to own a team believe they will break even by the second or third year.

“We are supporting the team owners in various ways.We are taking care of the costs of travel and boarding of teams. Also, we have introduced them to brands like Yonex and Petronas which have invested in badminton globally,” adds Chaddha.

But for certain individuals such as Mohit Burman of Dabur and the Sahara Group, who are heavily invested in IPL, Hockey India League and Indian Badminton League, it’s not just about pure commercials.

Abhijit Sarkar of the Sahara Group says they have been supporting sports for a long time and this is part of the company’s CSR efforts. “Not only cricket, hockey or badminton, we have been always supporting athletes and other sportsperson for Olympics and other tournaments,” he adds. For groups such as Sahara, the investment required in hockey and badminton are much less than what they had to pay to own an IPL team or be a sponsor of the Indian cricket team.

But as Percept’s Singh says investment in sports, at least in the first year, has to be 70 per cent passion and 30 per cent investment. “It is only after 7-8 years do the teams start making profits,” he adds.

It remains to be seen whether we will finally produce a golfing star or have enough Indians following hockey and badminton for the sports broadcasters, team owners and league owners to finally get their cash registers ringing.

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