Sanjay Gupta, managing director of leading broadcaster Star India Pvt. Ltd is confident that the business of sport is only going to get “bigger and better” in the coming years. He attributes the success of sporting tournaments like Pro Kabaddi League (PKL) and the Indian Super League (ISL) to a change in the mindsets of audiences. On the sidelines of a sports summit organized by the Confederation of Indian Industry, Gupta spoke of the rise in sports sponsorship, kabaddi’s role in India’s journey to becoming a multi-sport viewing nation and the likelihood of Star India’s sports business breaking even in the current financial year. Edited Excerpts:
In 2013, Star India started to build a national sports network with an investment of $1 billion. What’s changed in the last four years?
Two big changes have happened. One at a society level, the number of young kids who are both playing and following sports has grown manifold. It is no longer only about cricket. Today you see the power of cricket, kabaddi, hockey, football, badminton, and tennis. There is a variety and there are new leagues coming in. There is a boxing league which has just been announced, a table tennis league which is coming very soon. The love and desire for sports in young kids who are into many new sports is a big dramatic shift that’s been happening over the last few years.
Even parents are saying sports is a good thing for my kids, especially when they see young kabaddi players earning Rs90 lakh–Rs1 crore in one season of footballers making Rs50-70 lakh to one crore. Nobody could have thought of these as opportunities.
The second is the culture of not only watching but the culture of brands and communities seeing value of sports. Overall in the ecosystem, the mindsets have changed. The businesses are thinking about sports as an opportunity to grow their brands.
So, in some way, the culture and mindset around sports, both with parents and businesses, has seen a movement. Is it enough? No, I think there is still a long way to go. But a big change from 4 years ago.
How has that affected the business?
There are a few things that only sports can deliver, which no other content delivers. One is the scale, in terms of the number of people a sport talks to. Let’s take cricket and the Champions Trophy which reached out to 42 crore people but even a kabaddi game today, when it's aired on television, it has reached 40-45 crore people in one season.
The second big thing which sports delivers and brands are recognizing is the depth of engagement that viewers have. People very passionately believe in the sportsman of the sport they watch. The association value that you get when Vivo sponsors kabaddi or a Hero sponsors ISL, people remember not only ISL, but Hero ISL and that associative value is very good. Hero is then looked at as a progressive brand that’s trying to build football in this country.
This year, across companies, across businesses, sports beyond cricket will clock sponsorship revenue of close to $100 million (Rs647.8 crore), this number was zero in 2013. I think this is the first big year for other sports because earlier, people were still tentative, they were still not sure if these (leagues) would stay. In the first few years, everyone is wondering if it’s a one-off or is it a real sustainable phenomenon. The last year has proven that it is.
What’s brought India closer to becoming a multi-sport viewing nation?
The first season of kabaddi, that, for me was a turning point personally and as a part of Star India. I knew this country is ready just by virtue of the number of people who turned up in the stadium, the way they talked about Anup Kumar (captain of Indian national kabaddi team and captain of the world cup winning Indian team of 2016) and Rahul Chaudhari and all the stars. They suddenly became big celebrities. I still remember a newspaper photograph where an air hostess posed next to Anup Kumar. When a player of a rural sport becomes an icon for a set of people travelling in an aircraft, (that) tells you how the country has adopted the sport. Kabaddi is truly a case study.
Star India has made consecutive losses since FY 2014, the year it announced its sports investment. James Murdoch had earlier set a target to deliver half a billion dollars of profit by 2018. Will that happen?
As you know, we have been investing behind the sports and digital businesses. Sports is seeing a growth, both in revenue and viewership. Last year was still an investment phase in the sports business, but this financial year we should break-even and have a profitable year as far as sports is concerned.
Even at Hotstar, while its revenue and viewership has increased, Novi Digital Entertainment Pvt. Ltd’s (the company that operates Hotstar) losses have only widened.
So, digital is in a growth phase in this country. Given the way consumers are adopting smartphones, data prices have become so much cheaper, I think this country is moving to digital consumption in a very big way. In the just concluded Champions Trophy, there is a metric called the number of people who concurrently see a particular video; we had close to 4.7-4.8 million users who came to the platform at the same time, which I’m told is the highest for any sport activity or any activity in the world ever.
So yes, revenues are coming in. But digital continues to be in its growth phase, it will need investments. It’s difficult to predict the timing for profitability, but it’s changing so fast, growing so quickly and the opportunity is so large that it’s difficult to comment on how long it will take.
Are there any new sports that Star India is looking to invest in, going forward?
The new league that we are starting to air on our network from 13 July is the Ultimate TT (Table Tennis). We don’t own the league but we will air it.
In the last few months, companies like JSW, Tata and Adanis have bid for teams in both the PKL and ISL. What do you think prompted these companies?
Businesses are viewing these as opportunities. They can gauge the power of how big these leagues are becoming and will be in the future. If you look at all the businesses which have now bought teams, (they) are all very smart businesses.
All of them talk about how sports is more than just a business. They feel it is a far more purposeful thing to invest behind. The third factor is they see the power of youngsters in this country and if you had to take a bet on them, then what better than sports to be connected to the young Indians. For most of these owners, having a sports team is linked to communicating to the youngsters of this country in a big way. They see building their brand in a significant way by leveraging the power of sports