It looks like 2021 will turn out to be a good year for sports, especially from an advertising revenue perspective.
Sports, which contributes in the 10-15 percent range, will see its share going up, thanks to sporting properties like the Indian Premier League (IPL), T20 World Cup, and Tokyo Olympics, among others.
“It (sports) was around 15 percent, but now it will be in the 18-20 percent range to the overall TV advertising ecosystem," Rammohan Sundaram, Country Head & Managing Partner, Integrated Media of advertising company DDB Mudra Group said.
Pre-pandemic, on a base of around Rs 28,000 crore, sports accounted for Rs 2,500 crore TV ad revenue. This year, experts say this number will be significantly higher.
“This year, there are many sporting properties. So, this number will be closer to Rs 4,500 crore- Rs 5,000 crore, thanks to Olympics and the T20 World Cup. In 2018-19, without Olympics and the T20 World Cup, this number was around Rs 3,000 crore - Rs 3,500 crore," said analyst Karan Taurani, senior VP, Elara Capital.
He said that the 14th edition of IPL alone will add around Rs 2,500 crore. In addition, the T20 World Cup will mint close to Rs 1,200 crore and Olympics in the range of Rs 300-400 crore from ad revenue.
According to Dr Sandeep Goyal, MD of ad agency Rediffusion, the T20 World Cup matches will attract similar ad revenue as IPL matches. "Take Rs 50 crore per T20 World Cup match. That's the amount that will go in the near future. Sports will take a large chunk of spends (on TV)," he said.
Star India, the official broadcaster of IPL 14, that charged Rs 14 lakh for a 10-second ad slot during the league, is charging a similar amount for T20 World Cup matches.
The remainder of IPL 14 will be played from September 19 till October 15, and the T20 World Cup will start from October 17 and will go on till November 14 with a total of 45 matches.
While two big cricketing properties are scheduled back-to-back, Sundaram thinks that there will be growth in advertising expenditure (AdEx) than a clash.
"AdEx will grow and the clash won’t be significant. IPL is not for all brands and so there will be enough and more room for others to play in the T20 World Cup. T20 World Cup is being sold at a better time when things would have somewhat settled as far as COVID-19 is concerned. This automatically reflects in the growth we are seeing in the economy whereas 85-90 percent of inventory for IPL was already sold out during the second wave," he said.
"And that is why you will see a lot better demand mix on T20 World Cup than on IPL where you had a whole lot of new-age companies than the traditional ones. My conjecture is that we might see a lot more participation from the traditional companies vis-à-vis IPL," added Sundaram.
While sports will add more revenues to the overall ad spends, Goyal noted that there will be no major cannibalisation from general entertainment channels (GECs).
"FMCG, apparel, food ... they will largely remain GEC guys. Cricket is now more fantasy games, ed-tech, payment platforms."
So, this year, along with non-fiction shows on GECs, sports will be a big contributor to TV advertising, noted Sundaram.
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