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The Indian sports industry experienced a remarkable 49% growth in 2022, surpassing ₹14,000 crore in revenue. While India has witnessed a surge in sports enthusiasm in recent years with the popularity of leagues such as IPL, Pro Kabaddi League, Indian Super League and others, cricket continues to drive 85% of the spends with massive fan following, lucrative sponsorships and broadcast deals. As the cricket franchises continue to flourish, they are paving the way for a new era in team operations, fan engagement, and overall sports development.
To understand the potential future of these franchises, it is worth looking at the evolution of sports in the West. Football clubs in the UK, such as Manchester United, Liverpool, and Arsenal, have transcended their roles as mere sports teams, evolving into global brands with enormous fan bases, merchandising opportunities and commercial partnerships. Across the Atlantic, the National Football League (NFL) teams like the Dallas Cowboys and New England Patriots have mastered the art of combining sports with entertainment. With halftime shows and innovative marketing strategies, they have turned the Super Bowl into an annual cultural phenomenon, attracting millions of viewers globally.
A look at Manchester United’s revenue model reveals that broadcasting contributes around 32%, sponsorships 29%, ticketing 21%, and merchandising adds 18% to their revenue. In contrast, the revenue breakdown of Indian cricket franchises shows considerable dependance on broadcasting at 73%, sponsorships 22% while ticketing and merchandising constitute a mere 3% and 2%. This is a clear call for franchises to explore and diversify their business model for balanced and sustainable long-term growth.
So, what is the next opportunity for cricket franchises? The next frontier lies in the world of merchandising, not only as a significant revenue generator but also as a powerful tool for fan engagement and global brand building. In a recent milestone, the ICC Men’s World Cup 2023 witnessed a groundbreaking achievement in sports merchandising as sales of the Indian team jersey soared to unprecedented levels, surpassing half a million. This is a wonderful example of merchandising done right – while Adidas laid the foundation with a great pricing strategy, distribution partnerships with Blinkit and other e-tailers such as Amazon, Myntra and Meesho, became the driving force behind the surge, ensuring that fans received their coveted jerseys and other merchandise for key matches and celebratory moments.
The market potential for merchandising is huge and is intrinsically tied to the understanding of the fan base and deployment of effective engagement strategies. Fans no longer want to be passive spectators; they desire an immersive experience, often transcending the conventional boundaries of ‘just watching the game’. Therefore, there is a need to forge a deeper connection by understanding and engaging them better, both online and offline. This necessitates harnessing comprehensive data analytics and building deep and pervasive Customer Relationship Management (CRM) infrastructure to delve further into their behaviors, preferences and trends and deploy actionable insights to foster a symbiotic relationship between sports franchises and their consumer base.To achieve this level of understanding, there is a growing need to bring in talent from diverse industries into the realm of sports management. Conventionally, cricket merchandising has been steered by individuals with a background rooted solely in media/ sports. However, the potential for growth lies in challenging this status quo. By bringing in professionals with diverse expertise from FMCG, Retail and Consumer Tech, the industry will benefit from fresh perspectives, creativity, and innovative approaches.
A memorable instance of harnessing merchandising for expansion is Inter Miami’s clever response to Lionel Messi’s arrival. The franchise successfully shifted its merchandising strategy leading to record-breaking sales. These strategic moves, grounded in innovation and foresight, underscore the necessity of an analytical foundation, highlighting the crucial role of talent convergence in advancing the sports industry. Professionals from the consumer and retail world, equipped with profound understanding of consumer behaviors, product positioning, data driven decision making, branding and distribution excellence can play a pivotal role in this transformation. By cross-pollinating talent, cricket franchises can break the clutter, devise innovative products, and elevate the overall fan experience. The future of Indian cricket will not be just about what happens on the pitch; it will be about the experiences and products that fans can carry with them, fostering a lifelong bond with their favorite teams.
With the addition of live sports, Netflix emulates the old-school cable TV playbook. Netflix said on Tuesday it will carry World Wrestling Entertainment’s (WWE) flagship weekly program, “Raw,” from next year, deepening its investment in live programming and offering its subscribers outside the U.S. other weekly wrestling shows including “SmackDown”.
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