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Last year in a bid to increase its presence in the sports world, Reliance formed a JV with IMG. The aim of the JV, called IMG Reliance, is to among other things create and operate major sports and entertainment assets in the country.
The JV has done deals with different organisations including the Basketball Federation of India (BFI).
It is also taking the Aircel Chennai Open tennis event to the next level. Indiantelevision.com‘s Ashwin Pinto caught up with IMG Reliance COO Ashu Jindal to find out more on the JV‘s plans.
Excerpts:
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What is the vision for the JV in terms of the impact you see it having on the sports landscape?
In the recent past, the Indian market has witnessed the rise of some of the world‘s strongest sports brands. As India‘s sports landscape grows, we are looking at bringing several successful sports properties to India in addition to creating newer ones tailored to fit the country‘s specific requirements. We will continue to build on the strong foundation and brand equity that India enjoys. |
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Which are the sports that IMG Reliance is focussing on developing and what are the various strategies being followed?
As you might know, we have signed a 30-year partnership with the Basketball Federation of India (BFI) to develop basketball. The BFI has granted IMG Reliance commercial rights, including sponsorship, advertising, broadcasting, merchandising, film, video and data, intellectual property, franchising and new league rights.
We have also signed a 15-year partnership with the All India Football Federation (AIFF). We aim to restructure, overhaul, improve, popularise and promote the game of football throughout India, from the grassroots to the professional level. |
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What challenges does the economic slowdown pose for you?
The success of the Indian Premier League and more recently the inaugural Indian Formula 1 Grand Prix illustrate the fact that the sports sector will continue to mature. Growth in the media and entertainment industry is expected to be at 14 per cent until 2015, and the entertainment and recreation arenas, including sport will be the greatest beneficiaries.
Organising world class sporting events is IMG Reliance‘s core competency and I am certain that the businesses we operate in will continue to enjoy success in the presence or absence of a slowdown. |
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On the tennis front, how has IMG Reliance grown the Aircel Chennai Open?
The support of the government of Tamil Nadu, Tamil Nadu Tennis Association and the All India Tennis Association since the tournament‘s inception has been invaluable. In many ways, the Aircel Chennai Open has been successful thanks to a combination of our global and local strengths. We are proud to have been associated with it since its inception and hosted the likes of Rafael Nadal, Boris Becker, Carlos Moya, Richard Krajicek, Patrick Rafter, Yvgeny Kafelnikov, Byron Black and India‘s own Leander Paes and Mahesh Bhupathi.
The fact that the number of spectators attending the tournament in the first round has gone up each year is evidence of the event‘s growing popularity. Chennai‘s tennis fans have given the tournament their unstinting support. Hardly surprising that the world‘s best players love going there because the fans they play in front of are knowledgeable and immensely committed to the game. |
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You have seen some tennis events including a WTA one in India close. What are the challenges involved in keeping a tournament financially viable?
With the people supporting our efforts, we have a dedicated and experienced team of individuals, both globally and nationally, who work on events like the Aircel Chennai Open. We are confident that any event planned professionally and executed well will continue to attract sponsorship and advertising. In addition, the Indian markets and populace are now opening up to accept and enjoy non-cricket sports, a fact that is making the growth of events like the Aircel Chennai Open easier. |
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Has it been harder this year to find sponsors given the economic slowdown?
All signs point to a market that is ready and eagerly waiting for additional sports to enter the mainstream, thus making the process of finding sponsors easier. Positive developments such as these, apart from the rising stock of Indian sportspersons and emergence of Indian team owners and organisers on the world sporting scene, have led several exciting new sports events being organised in India.
For Aircel Chennai Open 2012 too, we are very pleased to have Nature Valley, Parle Hide and Seek, Ricoh among others as first-time sponsors in addition to many of the others continuing their sponsorships. It is but safe to presume that the scope for marketing can only grow wider. |
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How is the Aircel event perceived by viewers in India and abroad vis-a-vis other ATP events?
It has grown to become South Asia‘s premier ATP World Tour event and come a long way since Leander Paes and Mahesh Bhupathi won the first edition doubles title in 1996. Though there is still a lot of room for improvement, we stand firm in our resolve to develop the event into one of the world‘s leading tennis championships. |
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Is tennis finding more acceptance from advertisers looking at targeting affluent audiences?
Advertisers from India and abroad are looking at this as an opportunity to build effective marketing programs, bring their brand into India or take it abroad, and in the process engage with affluent and global sports fan bases around the world. |
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What are the different ways in which sponsors leverage the Aircel Chennai Open?
The sport is a very interesting mix of athleticism and glamour, both of which offer a host of opportunities for partners and sponsors, this, besides the regular benefits of branding and visibility in the media. The tournament takes place every year in the first week of January. It offers brands a platform for launching new products. And owing to the timing of the tournament, the overseas players usually reach around the last week of December, just after Christmas and before new year, so brands associated with the event can use this festive period for a lot of hospitality and entertainment relates activities.
We have come up with a concept of ‘Market Square‘, this is a commercial area within the stadium premises where partners can showcase their offerings and get a captive audience who visit the stadium through the tournament. This apart, depending on the nature of sponsorship, the brands can get time from celebrity players for promotional activities. |
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In terms of ROI how does tennis compare to other sports?
So, while on the surface this may not seem the most attractive proposition for a brand to be associated with tennis, the fact of the matter is that the other three sports do not have much participation from India and neither does much action taking place here with the only exception being the Indian Grand Prix.
As against that, tennis in India is growing by leaps and bounds, not only do we have the honour of hosting South Asia‘s only ATP event (2012 will be the 17th edition), Indian players are carving a niche for themselves in world tennis – Mahesh Bhupathi, Leander Paes and Rohan Bopanna feature among the top 15 doubles players in the world and Somdev Devvarman is one of the most promising stars in the singles arena. From a brand‘s or an investor‘s perspective, a good mix of on-ground opportunities and emerging stars offer a world of opportunities to spread the word, and from that point of view, tennis does offer a bigger bang for the buck! |
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What does the deal with the AIFF encompass and what is it worth?
This agreement grants IMG Reliance all commercial rights to football across all football properties controlled by AIFF including but not limited to the national teams and all current and future professional leagues. It is valued at Rs. 700 crores for a period of 15 years. |
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How do you see television viewership of AIFF and the Aircel Chennai open growing?
In India too, football and tennis are among the most popular sports, and television audiences continue to grow at a steady pace. |
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Are advertisers now more receptive to non cricket sports compared to five years back? |
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There is a lot of talk that companies often use sports apart from cricket for CSR rather than looking at an ROI. Do you agree with this?
Increasingly corporations are moving towards the concept of ‘triple bottom line‘ which is comprised of ‘people, planet and profit‘, with people meaning the development the society within which a corporation functions. Given this, a lot of companies are now putting money into sports and development of sports at the grassroots level which could be considered a contribution towards the welfare of the society.
So if this were to be seen from the point-of-view of the new reporting framework, this investment would be contributing directly towards the bottom line of the organisation. However, even in the traditional view of ROI, the sports sponsorship market is evolving and with so many options for sponsorship, firms are now recognising the benefit to their brands in associating with world class, professionally managed sports events in India, in all sports. |
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Are you looking at cricket at all? |
Category: Sponsorship
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‘India is witnessing a sporting revolution’ : IMG Reliance COO Ashu Jindal
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Advertisers chase soccer World Cup
A day to go to the Fifa World Cup and fans are already geared up to pump their lungs that would scream and pound to cheer their favourite teams.
And to attract those fans, companies around the world are devising various strategies to build consumer connect.
These range from apparel manufacturers, airlines and TV hardware companies to gaming and DTH service providers. Everybody wants a piece of the action which comes around just once in four years.However, there is a certain amount of caution in the market in terms of marketing spends as the economic downturn is just over. Also, not all Fifa partners are doing activation around the event.
Products that will be the most active are youth centric and upper middle class brands that would be targeting the urban youth. This would be important as international footballers are treated almost on par with cricketers – at least in three states. There is, as expected, some amount of activation happening in Goa, Kerala and West Bengal where the interest for soccer is high.
Percept India joint MD Shailendra Singh notes that male specific brands for the foreseeable future would be active. “This is because marketing ultimately has to justify some sort of RoI and products that are looking for a higher sale during this period would be the ones that would market extensively,” he says.
Boon for ESPN Star Sports: Broadcast partner ESPN Star Sports is expected to clock an advertising revenue of Rs 1 billion from the Fifa World Cup.
ESS has sold most of its inventory and has roped in sponsors that include Vodafone, Airtel, Nokia and Samsung.
ESS MD RC Venkateish expects a 25 per cent growth in ratings this time around. “Last time the event managed an average TVR of 2.1. We also expect families to tune in besides males. That is because the soccer World Cup cuts across TGs,” he says.
ESS‘ bullishness is shared by a Nielsen study. According to it, eight out of 10 Indians surveyed would follow the event live on television.
While the ratings during Fifa World Cup in terms of absolute numbers may not go up by a lot, the sheer increase in the base will see larger audiences coming into the game. There has been a lot of coverage especially in newspapers which will drive people to ESS.
Venkateish is confident that the boost in viewership for the soccer World Cup will have a positive carry over effect to other soccer events as well like the EPL once the World Cup gets over.
TV companies get cracking: With the sporting extravaganza being on HD, television manufacturers are looking at boosting their sales of premium products. Brands like Samsung and LG who have a global exposure to the football platform through multiple fronts will be most active.
Analysts say television sales could grow in the region of 15 per cent as consumers prefer to upgrade to better and bigger sets. In the key markets of West Bengal, Goa and Kerala sales can actually double.
Sony Electronics, which is a Fifa partner, will focus on launching a full range of Bravia Full HD and LED 3D TVs. The 3D push is being done as it gives the consumer a new way of looking at soccer.
Says Sony India MD Masaru Tamagawa, “We are focussing on the soccer crazy Kerala and West Bengal. We have introduced consumer promotions in West Bengal and Kerala wherein on purchase of every Bravia LCD TV above 26 inches, the consumer shall also be a recipient of Official Fifa Football replica. Our aim is to sell around 30,000 units in West Bengal region and around 10,000 units in Kerala.”
Haier, meanwhile, has launched their Soccer Scheme in the form of the Haier ‘Free Kick offer‘. Haier India president Eric Braganza says that this is a scratch card scheme where on purchase of any LED/ LCD TV above 81 cms (except 32S9), a customer can win 100 per cent cash back or an Adidas track jacket with an autograph from its brand ambassador John Abraham, worth Rs 2290. In terms of new products, Haier has launched a range of 117 cm inch Full HD LED backlit TVs and 140 cm LCDs.
Panasonic India is targeting a sales turnover of Rs 750 million from Kerala, West Bengal and Goa during the event. Panasonic‘s marketing manager sports and eco products Kunal Dua points out that the company, which is the primary sponsor of the Indian football team, has kicked off road shows to promote its products during the World Cup in Kochi, Kolkata and Goa.
“Panasonic has introduced a unique ‘Panasonic Soccer Mania 2010‘ offer on their range of ‘Viera‘ Plasma TV and LCD TVs where the customers can get assured gifts. The aim is to maximise the wave of excitement and joy during the football seasons,” he says.
The Merchandise Scene: On the merchandise front, adidas, Nike and Puma will be active.
adidas will supply outfit and gear to 12 teams including Spain, Argentina, Germany and France while Nike is working with nine teams and Puma with six. adidas, in fact, is sponsoring the teams that play the opening match – Mexico and South Africa. These companies leverage on the iconic status of some of the footballers. It is likely that the winner of the event will be wearing gear from one of these companies.
Nike is cashing in on Ronaldo as part of their ‘Write The Future‘ campaign. The company will benefit in a big way if Brazil win. Puma is outfitting defending champions Italy. Adidas, meanwhile, focussed on a three-city selection event in New Delhi, Mumbai and Chandigarh to select six students. They will be the official ‘adidas Fifa Fair Play Flag Bearer‘ at the 2010 Fifa World Cup in South Africa.
More recently in Johannesburg, adidas launched The Quest with its interactive Fifa World Cup football campaign. Kicking off with a star-studded film, created in the style of a movie trailer, The Quest challenges fans from all over the world to sign up to a multi-platform digital innovation. Highlights include a Live Graphic Novel that combines live action and animation in an interactive experience that reacts as the tournament unfolds.
Online marketplace eBay will be having some official Fifa Merchandise listed on eBay India from adidas which will be promoted on eBay. An eBay spokesperson says that this will mark the first time that eBay is promoting Fifa merchandise in India. The issue though is whether this entire buzz will translate into strong retail sales for jerseys, boots etc.
adidas India MD Andreas Gellner says that he expects sales to multiply.
Relay Worldwide India GM Mahesh Ranka, though, notes that companies need to get their price points right. “The fact that a jersey costs a few thousands of rupees means that a large section of fans are excluded. While merchandise will sell, it may not be significant. Also, the consumer today is very value conscious. He wants RoI on every rupee spent. Also, consumers are still facing difficult economic conditions due to inflation, home loan rates etc. Therefore, spending could be more discretionary compared with 2007 and 2008.”
He also notes that Indians still have to grow in the merchandise realm. “We are happy following the sport, speaking and debating about it and probably have an expert comment or two. But when it comes to spending the greenbacks for the team, there has to be a good reason to do so, and for better value to prevail. Having said that, the EPL teams‘ Jerseys have sold in decent numbers – especially the bigger clubs like Man U and Chelsea.”
Interestingly, DVDs around the event are not expected to fare as well. Collectibles are still to grow but a start should be made.
As far as retail stores are concerned, Shoppers Stop and Landmark are rolling out Fifa-licensed merchandise. While Shoppers Stop and adidas are selling the official casual wear range, Landmark is focussing on non-apparel merchandise.
Ranka adds that while the mood in the market is much better compared to 2006, it hasn‘t translated much in terms of marketing spends by companies. The economy has come around a full circle in last two years and even now people are being cautious of spending money on marketing.
What is good for companies, though, is that there is more awareness about soccer. This has grown over the past four years with all the sports channels pushing it. In addition, the number of foot-balling icons has grown and the competition this time is more open. There are more than the usual two or three suspects. So the reach for the event will be much more compared to 2006.
According to a recent study, Manchester United has close to 13 million fans in India, while Chelsea has close to nine million fans.
In South Africa, meanwhile, the rush for merchandise related to the event is high. But there is a lot of counterfeit merchandise that is also being sold which is hurting the manufacturing industry. Fifa‘s official World Cup suppliers are losing thousands of dollars.
Gaming: Another product category that will benefit is gaming. Zapak, for instance, expects millions of game plays for Power Soccer which is its MMOG launched last year.
7Seas Technologies will launch two games, Soccer Ball and Soccer Tournament, to coincide with the event. Indiagames is distributing Electronic Arts‘ Fifa game on its portal and will also be doing activities with telecom operators to push the game.
Says Indiagames COO Samir Bhangara, “Soccer games will see thrice as much activity during the one-month period that the World Cup is on. After that it will reduce to an extent but interest will still be there.”
Globally, it is expected that 10 per cent of Internet users will play soccer related games.
A sponsorship windfall for Fifa: The IEG Sponsorship Report says that the tournament has generated $1.6 billion between 2007 and 2010 as opposed to $584 million between 1999 and 2002.
Fifa had introduced a three-tier sponsorship system with the levels being Fifa Partners, Fifa World Cup Sponsors and National Supporters. Partners received exclusive marketing assets and international rights to various Fifa activities including the World Cup and other competitions. FIFA‘s six partners are adidas, Coca-Cola, Emirates Airlines, Hyundai-Kia, Sony and Visa and they pay between $ 24 to 44 million every year.
The eight companies, Anheuser-Busch InBev‘s Budweiser, BP Castrol, Continental tires, McDonald‘s, MTN, Mahindra Satyam, Seara and Yingli Solar, are at the World Cup Sponsor level and pay anywhere from $10 – $25 million in annual fees. These companies have acquired the rights to the event at a worldwide level and they also have chosen marketing assets, secondary media exposure and the assurance of category exclusivity.
In India, in terms of Fifa‘s partners, one of the companies that is being aggressive is Castrol. In fact, the campaign is its largest ever consumer promotion activity being carried out in India. As part of its promotional activity, Castrol has a contest. It will fly 50 winners along with its brand ambassador John Abraham for World Cup matches.
Another company that will have a big presence at the Fifa World Cup is Mahindra Satyam which is the IT services provider. To manage ticketing, accreditation, transport, materials management and overall event management, Fifa employees will be using a software solution developed by Mahindra Satyam.
Team Valuations: The Spanish team is the most valuable with an estimated value of 565 million euros, according to Euromericas Sport Marketing and Gerardo Molina and Associates.
Number two is Brazil, with an estimated value of 515 million euros. France is third, with an estimated value of 450 million euros, followed by England which is worth 440 million euros.
The rankings calculate the market worth in terms of economic rights, or contract value, of the 25 players who have played most frequently for their teams during the qualifying round of the World Cup.