Sports primer
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The document discusses the business of sport and provides context around key revenue drivers. It notes that sport competes with other forms of entertainment for viewership. Some of the main factors that drive demand for sport include the uncertainty of outcomes, admiration for athlete prowess, developing common interests with others, enjoyment of competition, and the pure joy of winning. It also highlights that the main revenue sources for sports teams are matchday sales, broadcast rights, sponsorships, and licensing. The document advocates that shorter tournament formats like T20 cricket could help grow the global game.
Sports primer
- 1. Sport Business A Primer A Vijay Bharadwaj 1
- 2. What is Sport? QuickTime™ and a decompressor are needed to see this picture. 2
- 3. Do we remember this What emotions did we go through? 3
- 4. Key Element Sport like any other form of entertainment provides non tangible psychic satisfaction. Sport like any other form of entertainment provides non tangible psychic satisfaction. 4
- 5. So where do we fit? Learnings ‣ Sport is a part of the entertainment Industry Cricket ‣ We all need leisure and find it in different forms Sport ‣ Sport competes with other forms of Entertainment entertainment including TV, movies, theatre, Malls etc 5
- 6. What drives the demand for sport or Why do we watch sport? 6
- 7. Here goes Uncertainty of outcome Prowess Non scripted entertainment - The best Admire something which is a reality show ever? personification of the human body and mind Commonality Competition Develop common topics and friends Absolute and relative Our pals at facebook have taken this to a new 7
- 8. The pure joy of winning 8
- 9. Some facts and figures ‣ Sports related activities 13th largest contributor to the US GDP ‣ The London Olympics will generate £10bn in revenue for the British economy as a whole.(Lloyds TSB) ‣ Indian cricket rights for a 6 year period went at Rs 3851 Cr (40 cr a match) • IPL Year 1: Mumbai Indians -$ 124 m • IPL Year 4: Sahara Pune warriors - $375.2 mn • 52% of olympic revenue comes from TV rights approx 32% from corporte sponsorship 9
- 10. Our working life depends on this 10
- 11. Lifelong aim move from D1 to D2 11
- 12. As a business person our As a business person our key aim is to maximize key aim is to maximize demand and hence raise demand and hence raise revenue. revenue. 12
- 13. Demand Shifters Team Quality Population Is it worth following my team?, Am i Population of city winning? Create new markets Competitors Fan Income The more you earn - More can you spend Price of competitive goods So Mumbai is more expensive than a 13
- 14. Other shifters Future expectations Media coverage Player investments, New stadium, better More media coverage future Lifestyle changes Short term peaks Get a fillip Get fitter 14
- 15. A sports product? - What creates revenue Sportsper The Sportsperson is a product - endorsements, son player transfers, merchandise For a team sport the team identity and brand is a The team product The biggest element without a contest nothing Contest works Ancillary Equipment, Academies etc products 15
- 16. Strange economics? 16
- 17. We all would love this 17
- 18. In Sports a team which wins everything or has a huge share of revenue kills the market. Hence monopoly is destructive. 18
- 19. Revenue elements All sports teams mainly have 4 sources of revenue Match day Broadcast Sponsorship Licensing sales 19
- 20. Sporting contests Each team plays the other - All teams have a League minimum no of matches - EPL League+pl NFL, IPL ayoff Knock out Tennis matches Others Golf 20
- 21. Is T20 the best way to grow cricket globally? 21
- 22. Why? 22
- 23. IPL Salary Cap Why? 23
- 24. Thank you 24