The business of sports 36 39_44Presentation Transcript
The Business of Sports Prepared by: MukeshRathi(10810036) Nishant(10810039) PranjalSrivastava(10810044)
Topics Top earning sports stars Most valuable sports teams Sponsorship BCCI IPL and related issues ICC Cricket World Cup CWG Delhi Beijing Olympics Betting in sports How betting works? Should gambling or betting be made legal? Sports management
Top Earning Sports Stars Tiger Woods Sport: Golf Income: $105 million Has won 14 major golf championships and 65 PGA tour events. In 2000 he signed a 5-year $105 million contract with Nike Woods' company Tiger Woods Design creates golf courses around the world
Top Earning Sports Stars Floyd Mayweather Sport: boxing Income: $65 million His May fight against Shane Mosley netted 1.4 million pay-per-view buys, the second-most lucrative non-heavyweight bout ever.
Top Earning Sports Stars Kobe Bryant Sport: basketball Income: $48 million Five-time NBA champ has the bestselling jersey in Asia, Europe and the U.S.
Most Valuable Sports Teams I. Manchester United Sport: Football Value: $1.83 billion Revenue: $459 million The Red Devils lay claim to having 333 million followers and 139 million core fans worldwide II. Dallas Cowboys Sport: American Football Value: $1.65 billion Revenue: $280 million New stadium landed NCAA Men's Final Four, NBA All-Star Game and Super Bowl.
Most Valuable Sports Teams III. New York Yankees Sport: Baseball Value: $1.6 billion Revenue: $441 million Leveraged most valuable brand in sports to create rich cable network and venue hospitality business. Source: Forbes
Sponsorship (The FA Premier League Case) Source: Branding, sponsorship and commerce in football, Department of Sociology, University of Leicester, UK
Competition Sponsor One who is the title Sponsor of the Competition. Promotion with advertisements in the stadium, on TV. Barclays-FA Deal worth GBP 65m for 3 years
Broadcast Sponsor One who has the right to broadcast the Competition on TV or the Internet. Different for different regions Earns from the sponsors. Sky Sports paid GBP1.314 bn for 92 games(Times UK)
Main Sponsor of a team in the competition
In most cases, different from the competition sponsor
Aon-Manchester United deal is worth GBP 80 million for 4 yrs (Times UK)
The providers of the players kit
Earn from Replica kits
Nike-Manchester United deal for 13 yrs. Is worth GBP 302.9 million (BBC News)
Football Championships and Jersey Sponsors' Stock Prices: An Empirical Investigation-Michael Hanke and Michael Kirchler Defeats show a significantly negative impact on the jersey suppliers‘ stock returns Positive impact after matches where both teams have the same jersey supplier Higher importance to knockout games
The richest body in world cricket.
One of the richest and most influential sporting concern in the World.
A net worth of more than US $1.5 billion as in 2006.
Of all the 10 full members of ICC (International Cricket Committee), BCCI contributes almost 70% of ICC’s expenses on cricket.
Revenue generated by BCCI
Mumbai Indians: $111.9million (Rs 447.6 crore) Royal Challengers Bangalore: $111.6 million (Rs 446.4 crore) Deccan Chargers: $107 million (Rs 428.04 crore) Chennai Super Kings: $91 million (Rs 364 crore) Delhi Daredevils: $84 million (Rs 336 crore) Kings XI Punjab: $76 million (Rs 304 crore) Kolkata Knight Riders: $75.09 million (Rs 300.4 crore) Rajasthan Royals: $67 million (Rs 268 crore) Sahara Adventure Sports (Pune): $370 m(Rs 1702 crore) Rendezvous Sports World (Kochi): $333 m(Rs 1533 crore)
Some facts and figures about IPL The auction of these eight franchisees fetched approximately US $724 million for BCCI. It earned another $700m from the Pune and Kochi Teams in the 4th edition of IPL. Global broadcasting rights for the entire IPL Twenty20 tournaments till 2017 has been secured by World Sport Group (WSG) at a cost of US $1.026 billion. Top teams such as Chennai Super Kings, Mumbai Indians and Delhi Daredevils have commanded an average of Rs 25 crore a year for the lead sponsorship slot, and Rs 4-10 crore for associate sponsorship slots. The number of people watching IPL matches on television in India went up 17% to 143 million for the third season last year compared with 122 million in the 2009 edition.
Categories of Sponsors in IPL Official Multiplex Sponsor – Q-Cinema Title Sponsor – Emirates Principal Sponsor - TVS Apparel Sponsor – Reebok Team Partner – ACC Official games for challenge partner – USL Performance & protection partner – Gulf Oil Official Chewing Gum – Wrigley’s
IPL – Business of Brands
Brand IPL The latest Brand Finance study pegs the IPL's worth at $3.67 billion, down from a peak of $4.13 billion a year ago. Aircel has signed the most expensive sponsorship deal in the Indian Premier League (IPL) with Chennai Super Kings. It paid more than 85 crore to renew its sponsorship contract with the Chennai team for three years. The deal beats two-wheeler maker Hero Honda's estimated 75-crore deal to sponsor Sachin Tendulkar-led Mumbai Indians for three years. The IPL organizers have this year allowed teams to sport different sponsors' logos for home and away matches. So, local companies can sponsor teams in the area of their operation.
ICC Cricket World Cup
Brand Sachin vs Brand Dhoni Talent management Group, which manages Sachin’s brands peg his earnings now at Rs 50 crore (Rs 500 million) a year. Coke, it is understood, is paying Tendulkar Rs 20 crore for a three-year deal. That’s more than what Dhoni is getting from PepsiCo. Dhoni signed a Rs 26 crore endorsement contract with Vijay Mallya’s UB Group, making him the highest paid sportsperson for a single endorsement deal in the country. Both Tendulkar and Dhoni get paid as much as Rs 5 crore per endorsement, which is set to rise to over Rs 7 crore this year. Sachin is endorsing 15 brands at present, compared to Dhoni’s 24.
CWG – Delhi 2010 India promised to provide US$100,000 to each participating country, along with air tickets, boarding, lodging and transport. The initial total budget estimated by the Indian Olympic Association in 2003 for hosting the Games was 1,620 crore (US$359.64 million). In 2010, however, the official total budget soon escalated to an estimated 11,500 crore (US$2.55 billion), a figure which excluded non-sports-related infrastructure development. Business Today magazine estimated that the Games cost 60,000 crore (US$13.32 billion).
Beijing Olympics 2008 The Beijing Organizing Committee for the Olympic Games reported that total spending on the games was "generally as much as that of the Athens 2004 Olympic Games", which was about $15 billion. Other sources, however, estimated that approximately $40 billion had been spent on the Games – making it the most expensive Olympic Games by a wide margin. The centerpiece of the 2008 Summer Olympics was the Beijing National Stadium, nicknamed "The Bird's Nest“ which alone cost around $500m.
Betting in sports Sports betting is the activity of predicting sports results and placing a wager on the outcome. It is illegal in India and throughout most of US but common in European countries. In Indian cricket alone, conservative estimates for the year 2007 put the turnover of the illegal industry at Rs.10,000 crore (more than $2 billion) per annum. In the recently concluded ICC CWC 2011, total betting estimates stood at more than Rs.5,000 billion(source: www.sportzpower.com).
How betting works?
Types of odds
Fractional odds(UK format)
- Ratio of the amount won to the stake
Decimal odds(European format)
- Ratio of the full payout to the stake in a decimal format
Money line odds(US format)
How does an oddsmaker decide the odds?
Setting the odds is a matter of intense research, carefully cultivated contacts, years of experience and plain old intuition. An oddsmaker's reputation is based on his accuracy, and he has many variables to consider when determining the odds:
The teams' performances this season, in prior seasons, in last week's game, and against each other
The playing surface
Home field advantage
The weather forecast
Injuries, especially those of star players
Events in the personal lives of the players
Online betting industry A number of websites offer online betting
Should betting or gambling be made legal in India? Worldwide, gambling is an important source of economic activity and also of employment. The gambling industry comes under the 'leisure' part of the travel and transportation industry. It includes sports betting, lottery, Bingo, casino, poker, horseracing and other games that might end up making or losing money for those who play it.
Should betting or gambling be made legal in India? According to H2 Gambling Capital, May 2010, the global e-gambling (gambling on the Internet) market is worth over $30 billion. In terms of output and employment, in the UK the gambling industry contributes significantly. In 2008, gambling was responsible for 3 billion pounds ($4.65 billion) in gross value-added terms and helped create 40,700 equivalent jobs. The total economic impact of the betting industry, in terms of direct and indirect influence, is to the tune of 6 billion pounds ($9.3 billion) and it also supports over 100,000 jobs in British economy. In Europe, countries such as France and Italy are in the process of drafting laws that would allow online gambling.
Should betting or gambling be made legal in India?
South-East Asian nations like Singapore and Thailand which have much smaller number of tourist spots compared to India are able to attract more international tourists and tourism-related revenue than India owing to this very aspect.
But such a practice needs to be well regulated and it requires local and national laws to be amended suitably.
Sports Management Sports Management is an inter - disciplinary field and comprises in itself, the elements of economics, accounting, marketing, psychology, law and communications. The profession of Sports Management involves three elements - events, sportspersons (celebrities as also newcomers) and infrastructure.
Sports Management(contd.) A Sports Manager creates and markets events and sportspersons and manages all those activities that transform a sportsperson into a brand. For example, a Sports Manager associated with tennis star SaniaMirza works towards packaging and marketing her as a brand. This is done by the proper media interaction of the athlete, thereby maximizing his or her commercial benefits. Another example is that of the marketing strategy adopted by ESPN for the promotion of hockey, by the introduction of the Premier Hockey League.
Sports Management(contd.) In today's world, sports is a serious business with the adoption of sophisticated and complex operations of sports programmes. In fact, sports is one area where a lot of money is being pumped in and sports is considered to be a big business activity that generates a lot of revenue. Cricket is the most popular sport in India and is worth thousands of crores.
Sports Management(contd.) Professionally successful teams from different sports activities, and similarly successful individual players rake in a lot of money by the way of match fees, tournament prize money, advertisements, contracts, etc. A sportsperson or a team needs skillful marketing in order to reap the maximum profits. Coupled with the busy schedule of training and matches, it has become necessary for sportspersons to employ agents or managers for themselves.
Corporate organizations handling sports With the growth of competition in the packaging and presentation of sports events, it has now become the practice to rope in professional corporate bodies to stage and manage major sporting events - national as well as international.
College Sports Management
World Sport Group
Earnings of sports agents Source: www.sportsmanagementworldwide.com