A Study on Commercialisation of Sports

TABLE OF CONTENTS

CHAPTER NO. CONTENTS PAGE NO.

1. INTRODUCTION 5-7

2. AIMS AND OBJECTIVES 8-9

3. IMPACT,PRESENT 10-18
SCENARIO AND
GROWTH OF
MICROFINANCE IN
LAST THREE DECADES

4. MODES OF DELIVERY 19-22

OF MICROFINANCE

5. REVIEW OF 23-26
LITERATURE

6. CONCLUSION 27-28

7. REFERENCES 29-30
 CHAPTER 1
INTRODUCTION
 INTRODUCTION

DEFINITION OF COMMERCIALISATION

Commercialization or commercialisation is the process of introducing a new product or

production method into commerce—making it available on the market. The term often connotes
especially the entrance into the mass market as opposed to earlier niche markets, but it also
includes a move from the laboratory into even limited commerce. Many technologies begin in a
research and development laboratory or inventor's workshop and are not practical for
commercial use in their infancy (as prototypes). The development segment of the research and
development spectrum requires time and money as systems are engineered that will make the
product or method a paying commercial proposition. The launch of a new product is the final
stage of new product development and the one where advertising, sales promotion, and other
marketing efforts encourage commercial adoption of the product or method.
COMMERCIALISATION OF SPORTS

Time has changed a lot for human beings. There were times when people used to live in caves
and cover their bodies with leaves. Although, it took centuries for man, but still the caveman has
managed to enter the modern life of super computers and super conductors, today. Over the
course of history many things have changed significantly for human beings. The ways of
thinking as well as procedures of doing various things have changed incredibly, for example, the
way of living. Like countless other things, an immense transformation can be seen in the field of
sports today. In the beginning, main form of the sports was to show bodily strength and compete
with others on the basis of this. Ancient Greeks used to play these kinds of sports, since they
believed that their gods liked the powerful and strong men . Then gradually more and more types
of sports came into practice. Today, we see millions of people in the world playing thousands of
games involving bodily strength like wrestling, boxing and karate etc. Many sports are there
which need different techniques besides bodily strength like soccer and cricket etc. Then, there
are games that involve only brain power like chess and solving various kinds of puzzles. Many
people in the world follow their favourite sport and sport stars crazily. Markets are full of shops
that sell sports uniforms and goods. Fans love to buy shirts which have names of their favourite
players. People are getting more and more into sports, and it can be analyzed by looking at the
profits made by different sports clubs of today. Soccer clubs make hundreds of millions of
dollars annually. This revolution in sports was not possible if there wasn’t the commercialization
of sports.

Commercialization has taken sports to the level where they are today. It has brought lot of
changes to the sports, especially by making sports a big and profitable business. Sports can now
be followed by everybody, everywhere, and every second. More competitions are held every
year as compared to past. For example, in tennis there are a number of tournaments played every
year like Grand slam, U.S. open, French Open, British open and various others. Money is rained
over player of these tournaments. More and more people want to participate in the sports
because of this shower of grand prizes. It has helped sports in getting quality players. The sports
have become much more exciting, interesting, and competitive because of commercialization of
sports, and it has brought a very positive change in sports.

Commercialization means to apply methods for gaining profit. Commercialization of sports

means to use sports in order to make a financial gain. There can be various ways of using sports
in earning money. The shirts having monograms of different teams are bought extensively by
fans all over the world, and a big amount can be earned by this means of business. These are just
few of the numerous ways in which sports is making big cash. Sports’ stars themselves make a
lot of money by advertising products of different companies. Ashraf tells on a website that a
cricket star, Sachin Tendulkar, used to make Rs. 20 million ($ 0.25 million) by promoting
products of a soft drinks company . More and more ways are being introduced to make money in
sports, like displaying banners near the playing field and giving advertisements on T.V. while a
game is being broadcasted.

“Sports” have become a new concept than it used to be few decades ago. Many people give it as
importance as matters of life and death. Trends and traditions have changed over the years, and it
is all because of commercialization of sports. People used to go to the playing fields themselves
to see a game, but now it doesn’t matter whether one can go to a playing field himself or not.
Games are broadcasted all over the world. Nowadays, fans just gather around a big T.V. screen
and enjoy a match as they are in the actual field. Young and old are equally observed in cheering
their favourite teams, though they are in front of screens. The spirit of these spectators is no way
less than the crowd witnessing the game live at the actual place where the game is being played.
People colour their faces according to the colour of the uniforms the teams they are supporting.
This
craze and excitement has been given to game by commercialization.

Commercialization of sports has been there from almost ancient times in one way or the other.
Ancient Greeks used to compete for prizes, but there is a great difference in commercialization
of sports in the 21st century. The only common thing in today’s commercialization and ancient
one is that these both are a means of player’s pay. However, sports are commercialized to far
greater level now. More money has been brought to the world of sports now, and players get
highly paid. Today’s commercialization has made sports a full time job for players, while in
earlier times it was only a part time job. Sports have evolved and have become a very big
business today. Many big businesses are heavily involved in sports too . A professor of
University of Otago, New Zealand, Slack, said, “Athletes in the major spectator sports are
marketable commodities, sports teams are traded on the stock market, sponsorship rights at
major events can cost millions of dollars, network television stations pay large fees to broadcast
games, and the merchandising and licensing of sporting goods is a major multinational
business.” In sports there are usually some big names like Cristiano Ronaldo in soccer, Shahid
Afridi in cricket or Mike Tyson in heavy weight boxing. These are called superstars of their
respective sports, and they have an enormous number of fans who love them very much. Such
people are picked by different companies, contracts involving heavy money are signed, and love
of their fans is cashed. Companies are generating a lot of profit in this way, and will definitely
create job opportunities in many countries. So, commercialization of sports has positive affects
besides the good it is doing to sports.

Commercialization of sports has served sports in many ways. It helps in organizing big events.
Without money given by the sponsors it would have never been possible to arrange and organize
events like world cups of cricket and football. The biggest event of sports all over the world is
Olympics. It is an event that is arranged after every four years. Billions of dollars are involved in
making arrangement for this event, like building suitable stadiums for the event of this
magnitude, to provide accommodation for players, and security issues etc. This money comes
because sports are commercialized. Dr. Jacques Rogge, President of the International Olympics
Committee is quoted by Monroe in his book, and he says, “Without the support of the business
community, without its technology, expertise, people, services, products, telecommunication, it’s
financing the Olympic Games could not happen. Without this support, the athletes cannot
compete and achieve their very best in the world's best sporting event.” The event like Olympics
involves almost all the countries in the world, and it creates a gesture of goodwill between all.
The participation of so many countries is possible because the money for player’s travel comes
from the sponsorships due commercialization of sports. Today, sports’ events have become part
of life style of many people. It has become a solid business as well. It is very helpful in
generating profit in the world of today, the world of marketing, promotion, and advertisements.
Today most of the university sports are sponsored by various companies. This trend in sports has
enabled a number of emerging players to display of their skills who might not have got any
chance otherwise. It has made easy for colleges and universities to hold different competitions to
give a chance to students participate in co-curricular activities. Like in Beijing, the University of
Aeronautics and Astronautics, track team is sponsored by a tire company. It is helping the
students to groom well. Commercialization is proving to be very beneficial in this regard too.
Some of the sports have become famous all over the world because of the colours and
excitement given by the commercialization. Cricket, for example, used to be a longer game, but
now it is has been given a new name, T20, and shorter format. Like in India, a T20 tournament,
champion’s league, attracted a sponsorship of Rs. 1700 million ($30 million). Another
revolutionary change can be seen in the game of soccer. In England there are various clubs
which make hundreds of millions of dollars in a year. That’s why these clubs get the best players
in the world to play for them, and it improves the quality of the game too. Best players mainly
get attracted because of the big incentives given by various clubs. It is the main reason soccer
has become best in term of quality, and it is the only game that is played by every country in the
world. Sports thrive if they are getting good sponsorships, as it helps to get and hunt the best
players in a country. For example in Pakistan, Cricket is becoming better and popular day by
day, while hockey isn’t showing any sign of life in the same country. Although, there are many
reasons, but the availability of sponsorships is the main cause of the present situation of these
sports.
Cricket is the most successful sports in generating good monetary support from marketing and
private sponsors, but hockey is unable to have sticker of even a single sponsor on their shirts
.Commercialization has also helped sports’ fans very much. It is due to commercialization that
so many TV channels pay millions of dollars to buy the broadcasting rights; it enables the sport
viewers from all over the world to watch the sports they love. “NBC paid well over $600 million
for these Olympics. The games have long been a favourite for viewers and the network says
more than 170 million Americans have seen the games on NBC and its sister channels”. If
somebody likes to follow a game, then there are many channels which help him in this regard,
and it is all because of commercialization. Now, most of fans don’t have to travel long distances
in order to enjoy the thrilling moments of their favourite sports rather they can watch it very
easily and comfortably in their homes. A broadcasting company made a deal of Rs. 82000
million ($1200 million) to get the rights to broadcast a T20 tournament of cricket. Although
there are so many goods done to sports by commercialization, however there are some issues
which are not liked by most of the people. Some people think that it is because of
commercialization that the problems like mach fixing have become more common. Many people
talk about fair play these days. An interesting survey was done on the use of word “match
fixing.”. It tells us that the use of this word is more common than any time in the past, and it has
increased up to ten times than last year. Kuang, an instructor, at Taipei Physical Education
College thinks that modern sports have lost its ethical stance. He also says, “Commercialization
has damaged the concept of fair play and led to the priority of profits over good sportsmanship;
and those sports are no longer the honest competition they used to be” . UNESCO Education’s
Code of Sports Ethics (1992) defines fair play as “much more than playing with the rules”, a
notion that “incorporates the concept of friendship, respect for others and always playing within
the right spirit”. It is very clear that money from above facts that money has some got priority in
sports over everything because of commercialisation and it is not acceptable to many sports’
fans. Sometimes players have to play more than their stamina to satisfy the sponsors. A report
that was published in gulf news, recently, told us that European Tour members might be
participating in more events in to please the sponsors. If players will start caring more about
sponsors than the sports, then it will affect the quality of the game of many players. This is
something that isn’t noticed very much by the fans, because they love to see their stars more and
more in action, and they forget the fact that it can spoil the game of their heroes. Wrestling can
serve as a very good example of the negative impacts of commercialization of sports. When
there was real wrestling going on in the past there weren’t many people interested in watching
them. Since, wrestling is being shown all over the world by World Wrestling Entertainment
(WWE), there are many people who not only watch but also follow it with great enthusiasm.
Here, commercialization has spoiled the real spirit of the game, but it has made the “fake”
wrestling a good business though. Michael says that Wrestle Mania, an organization that
arranges the wrestling tournaments, is close to make almost fifty million dollars. In these ways
commercialization can prove to be very harmful to the sports, but there are many goods that
commercialization has done to sports, so its pros outweigh the cons.

Well, commercialization, the way sports is transformed into business, has proved to be
extremely beneficial for sports in many ways. It enabled team management to pay their players a
handsome amount, which in turn helped to look for better players, and it improved the quality of
the game. It has also helped big companies to promote and advertise their goods using the fame
sports’ stars, which has been helpful to economy of various countries.
Because of the availability of money better stadiums have been built today, which have made
sports more colourful, fun, and exciting. Since, advertisement pays off the TV channels, so they
broadcast the various matches all over the world, and it has made easier for fans to witness the
excitements of the sports coming from all over the world.
Commercialization has some negative impacts too, like it appears that it might be because of
increasing match fixings.

It definitely has prioritized the money over sportsmanship, and that is somehow against the spirit
of sports. By looking at both sides of the picture, one can easily go in the favour of
commercialization of sport. Although, there are some negative impacts, but the benefits of
commercialization outnumber its harms greatly. So, commercialization made it easy to see more
and better quality players, and it has also made the sport much more fun than they use to be.

CHAPTER 2

AIMS AND OBJECTIVES

CHAPTER 3
 IMPACT, ADVANTAGES AND
DISADVANTAGES OF
COMMERCIALISATION OF
SPORTS

IMPACT OF COMMERCIALISATION OF
SPORTS

POSITIVE IMPACT OF COMMERCIALISATION

OF SPORTS

The star Indian batsman, Sachin Tendulkar, has been recently named among the top fifty Indian
billionaires. He is from a middle class family. Similarly, Michael Jordan earned nearly seventeen
million dollars a year before he retired from the professional basketball. Chelsea has spent nearly
two hundred million pounds since the takeover of the club by the new owner. These illustrations
depict the fact that sports have been highly commercialized. Sport has changed its form and
dimension. It is not just the form of mere entertainment. It has gained commercial recognition. It
is no more confined within a field, court or a diamond. It’s viewed throughout the world by the
means of radio and television channels. This has been good for the players. They are financially
secured. Other business sectors also have boomed along with the sport. They also have been
benefitted.

Players now enjoy a financially secured life. It was not the case few decades ago. Players had to
hold another part time job along with playing to sustain their livelihood. Players now receive
huge sums of money to play. Each and every Indian cricket player gets approximately half a
million rupees per one-day international match and a million for a test match. Ronaldo gets
millions of pounds for playing for Real Madrid. Furthermore, the sports stars get millions from
endorsing various products. Sachin Tendulkar alone earns nearly 30 million a year for endorsing.
Similar is the case of David Beckham; he has the highest commercial value around the globe. He
gets millions by endorsing the products ranging from Pepsi to hair gel. They earn a lot now and
this has definitely made their life easier.

Commercialization has helped the other business sector to sustain. The television networks and
sponsoring companies have boomed along with the sports. The big sporting events such as
World Cup and Olympics are covered live by the televisions. Each and every English Premier
League match is covered by ESPN. The millions in their home view these events. And while
doing so, the sports as well as the television networks get advertised. The recent cricket
tournament was named DHL cup. It was named after the sponsoring company DHL. The
hoarding boards and the big logos were used all around the ground to promote the company. The
event was a success so was the promotion of sponsoring company. The mobile company,
Vodafone has sponsored the English cricket team. Similar is the case of Samsung. Its name is
printed on the vest of Chelsea players. The sponsors get the product advertised and clubs get
money for that. Thus this has benefited club, sponsoring companies and television channels.
NEGATIVE IMPACT OF COMMERCIALISATION
OF SPORTS

However, commercialization has had some negative impacts also. This has changed the attitude
of the players. The players no more play for the thrill and love of the game. The primary
motivator now is money. They play to earn. And in the case where sports do not provide
sufficiently, they are prepared to cross the conventional border of earning. This has given rise to
the phenomenon called the match fixing. Players are found under performing for sums of money.
Hanse Cronje, the former South African cricket captain, was guilty in this charge. He gave one
of his mediocre performances against the Indians for alleged sum of two millions. Similarly
another South African batsman, Herselle Gibbs, was also found guilty. He was bribed to score
less than twenty runs in a match. There are numerous such incidents. Players have been lured
and entangled into the vicious web of match fixing. This has hampered and defamed the spirit of
the game.

Commercialization has initiated sledging and conflict in the game. The players are paid millions
and are expected to win. They sometimes take extra steps of sledging and fighting. Boxers
sledge and fight in the pre match press interview. Australian cricketers sledge a lot on and off the
field. They target a particular individual of the opponent team and sledge. VVS Laxman, an
Indian batsman, was the victim of such incident. Australians openly discussed the vulnerability
of Laxman while facing the short balls in the press. Furthermore they claimed that they had
sorted him out. This provides them with the psychological edge over the opponents. They also
do this on the field. They are often taped commenting the batsman on his technique and making
joke of him during the match. They play just to win. And this might be a possible outcome of
commercialization.

However, commercialisation also has jeopardized the true spirit of the game. It has given rise to
match fixing and doping scandals.. The players are using performance-enhancing drugs. They
want to win and for that they are prepared to do something more than just play. Pakistani fast
bowler, Shoaib Akhtar and Mohammad Asif were convicted of this charge recently. Nepali
double gold winner athlete, Rajendra Bhandari, was stripped off his medals after he was tested
 positive in the drug test. The fact that the country had promised ten lakh each for the winner of
gold might be responsible for this.
A lot of money has been poured in to the sports. It has brought about certain changes. Few of
them have been bad but most of them have been for betterment. Doping and match fixing have
defamed the game. And also sporting environment has been deteriorated. But the heroes of the
games, players, have benefited from this. The business circle also has boomed along with the
sports. It has induced better economic growth. So in the overall context, commercialization has
been good for sports.

ADVANTAGES OF COMMERCIALISATION OF
SPORTS

Exposure

 Commercialization is about media exposure for the sport. If a major company sponsors an event
it is much more likely to get prime time television coverage, bringing in greater advertising
revenues and exposing more people to the sport. This will bring in more fans, improve the
profitability of local sports clubs, which in turn helps the local economy and revives community
spirit when the team is performing well.
 Participation

 With increased exposure of the game comes increased participation. For example, when a
national team does well at the Olympics the number of children taking up the sport increases.
This is at a time when there is national worry about the health of young people with regards to
what they eat and the level of exercise they participate in. The commercialization of sport which
leads to increased exposure, encourages children to get more exercise and reduce obesity. It can
also help young people find a hobby which gets them off the streets and discourages them from
crime.

DISADVANTAGES OF COMMERCIALISATION
OF SPORTS

Increased Costs

 One of the main problems with increased commercialization from a fan's perspective is the
feeling the increased costs are passed on to them. Ticket prices, refreshments and team shirt
prices have all gone up at the same time more and more advertising space is sold around the
stadium and television rights are sold for almost every game.
 Player Distraction

 It has been claimed in some sports that commercialization results in poorer player performance
at international levels. For example the underperformance of the England soccer team despite the
domestic Premier League having the highest wages of any soccer league in the world.
Commercialization also offers a distraction from the game as the top name players are signed up
by major labels to promote products.

THE GAMES ARE CHANGING

Sport is regarded as one of the largest industries globally in terms of employment and revenue.
The Business of Sports is a multi-billion dollar global industry propelled by enormous consumer
demand. The sports business means many different things to different people. This is a truly
global industry, and sports stir up deep passion within spectators and players alike in countries
around the world.
But in past, it was just a loss-making affair in India. Now, sport is going to be the next big
industry in India. In developed countries, sports contribute around 2 to 4 percentage of total
employment. It includes a variety of career profiles such as athletes, coaches, trainers, event
managers, public relation officers, Coordinator of sport organizations, Marketing Consultant,
Program and Facility Manager, Professional Sport Promoter, Sport equipment and product sales,
Sport Event Planner and Manager and Sport Sponsorship Specialist.

Nowadays, cricket is no longer a game. It has become a business or a profession of sort for
Indians. No longer do cricketers have to search for alternate sources of income like they used to
in the old days. The same shall become true for hockey and football in India if the current trend
continues. The commercialization of sport is a newer phenomenon for Indians. Gone are the
days when sports was only about international rivalries, nowadays club culture dominates cricket
as well football (to some extent) in India.

INDIAN PREMIER LEAGUE

One can attribute all this to the Indian Premier League (IPL). It started as a spectacle. It began
pitting players of the same nation against each other and establishing mouth-watering
permutations and combinations to allow players of different nationalities to play together. From
the outside, it promoted the entry of youth into this much-revered sport. From the inside, it
turned out to be money-churner. Its lure was too much to ignore for the cricket bigwigs. Revenue
flowed like the Ganges to the BCCI and the cricketers. Controversies continued unabated. It has
been blamed for deterioration of test cricket and turning the game into a mere money-machine.

PRO KABADDI LEAGUE

While this was the ugly aspect of sports commercialization, it didn’t turn out like this for the Pro
Kabaddi League. Kabaddi, a rural sport with little international relevance and even lesser
audience took off like a fever. As stars descended on the kabaddi scene, Indians found the link to
their roots. Little known kabaddi stars became household names overnight. He game got a huge
fillip. It was a shot in the arm for a dying game. So far, kabaddi has represented the most
successful transformation into a commercial event with the least number of controversies and the
greatest success for the game itself.

INDIAN SUPER LEAGUE

A study in contrast to both IPL and Pro Kabaddi League is the Indian Super League (ISL) which
started as an exquisite football competition. It managed to attract a few aging international stars
and along with vast celebrity visibility, it became another money-churner. ISL has been
criticized for doing little work at the grassroots level which matters for a dormant footballing
nation like India. Exposure of local Indian players to stars like Nicholas Anelka and Alessandro
Del Piero can do unimaginable wonders for the game. Although it is at a nascent stage, it has
attracted crowds like football never before did in India. ISL must make sure that it doesn’t end
up the IPL way and instead promotes the game to Indians like it never before did.

Little known leagues include the Hockey India League, which failed to draw a lot of interest in
the national game. Although it attracted international talent, Indians still remain oblivious to this
league whose commercial success may be bleak. Also falling in the same category is the Indian
Badminton League which also is the new kid but has had its fair share of controversies thanks to
Jwala Gutta. The newcomers have been International Premier Tennis League and the Champions
Tennis League. The success of both shall be seen as time progresses.

Overall, what we are seeing is the pumping of money into sports other than cricket in India.
While Pro Kabaddi League and ISL show promising signs, they must not go the IPL way and
remain strictly professional games. IPL has tarnished the image of BCCI and cricket for people
all around and its focus on money leaves out the critical aspect of the game, which is to promote
new talent. With commercial leagues in hockey, kabaddi and football, for the first time we can
say that Indian sports stars are being given their due. No longer do we have to read about their
glories in obscure corners of the sports editions. They have made their mark and are here to stay.
If they can promote viewer interest without increasing focus on commercialization and revenue
generation, they are here to stay for the long-haul as far as the common Indian is concerned.
With more than 1.2 billion people, India can become the next sports powerhouse if it manages to
give fillip to such leagues without making them mere revenue machines
 COMMERCIALISATION VS OVER
COMMERCIALISATION

Commercialisation of sports is a reflection of the consumer demand for sports and sports
content. It has brought with it better and improved benefits for athletes and sportspersons. Better
payments and facilities, more professionalism among sporting authorities, and the creation of
modern infrastructure and technology, have collectively made sports events more interactive and
interesting to watch.

But, at the same time, commercialising a sports event, especially through the television has
converted sports to yet another form of passive entertainment, rather than a participative
one(Statistics have proved that over 80 per cent of Indian children no longer play outdoors or
indulge in any sport).

Indranil Das Blah, chief operating officer, KWAN, says, "A sport cannot survive without
commercialisation. But, a sport will not survive if over commercialised. There's a very thin, but
distinct line between the two, a fact that Indian sports stake-holders perhaps still don't fully
understand today."

When it comes to over-commercialisation, no other sport in India can be blamed more than
cricket today. Be it a pointless bi-nation series, or multiple World Cups across formats, cricket
today, has become a 12-month sport, with no breaks.

With the enormous success of the T20 format and the IPL, the governing bodies have ensured
that no efforts are spared to gain maximum financial mileage; and while this may work in the
short run, it will result in killing the golden goose, argue many.

"IPL had a great start ," says Blah. "But, rampant commercialisation has resulted in numerous
cluttered sponsors, excessive commercial breaks, and a distinct lack of regard towards audiences
and players, which led in decreased TRPs and smaller audiences.

Today, sport’s contribution to India’s total employment is just .05%. The great initiatives such
as Indian Premier League (Cricket), Hockey India League, Indian Badminton League, Pro
kabaddi, Indian Super League (Football) and professionalization of Heritage sports events such
as Goti, Gilli Danda, Lagori, Kilithatt, Gatta Gusthi are changing the old face of Indian sports.
Once, we believed that only cricket will succeed in India. But the above mentioned initiatives
have shown Indians, a world of sports beyond cricket. These initiatives prove that sports have a
future in India as a business.
 CHAPTER 5
REVIEW OF LITERATURE
 REVIEW OF LITERATURE

COMMERCIALISATION OF PROFESSIONAL
FOOTBALL

Commercialization events

Tim Krabbenbos

In professional football the role of financial capital has increased significantly over time. Before
the 1990s, the aim of professional clubs was to entertain the fans by accomplishing sport success
while staying solvent and not to maximize profit. Finding ways to improve playing success is the
most important, and the clubs can be described as win (utility) maximization oriented.
In the 1990s, an increased involvement of global media conglomerates in football took place.
For media companies the broadcasting of sporting events had become a very important tool to
attract viewers and advertisers .

Due to events like these, commercialization accelerated in the 1990s in professional football and
clubs increasingly compete with each other on financial capital. The need for income from
broadcasting, merchandising and sponsoring, led to a high commercialization of professional
football. Professional football had changed to a consumer-oriented service where the market is
very essential. The football industry changed from a utility maximizing to a more profit
maximizing consumers-oriented service
The commercialization of football has changed the income structure of football clubs largely.
The money a club takes in on the day of the match was traditionally its major source of revenue.
This main reliance on match day income is not the case anymore today. Nowadays, a large part
of income is acquired by revenue derived from broadcast sources, commercial sources
(sponsorship/merchandising).
 SHAPING UP SPORTS ECONOMY IN INDIA
THROUGH COMMERCIALIZATION OF
CRICKET

M.M.K. Sardana

IPL has turned out to be a cash cow for its promoters i.e. BCCI and has generated huge surplus
every year of its existence through a host of streams of earnings created by IPL. It can boast to
be among the richest sporting bodies and had a turnover of `5,300 crores during the year 2011-
12 as per its annual report. Its kitty for the year 2011-12 stood at roughly thrice the revenue
generated by ICC, five times the revenue clocked by Cricket Australia and 12 times the income
of Cricket South Africa. `1200 crores income was earned from IPL and Champion League39.
Players of the game have also immensely benefitted by playing in the league with handsome
earnings which if well invested would stand them in good stead when they cease to play
competitive cricket.

Indian cricket players are the highest paid around the world because the audience for cricket and
the population is growing in the largest democracy in the world and I don’t see it decreasing in
the near future. Sponsorship contracts are based on viewership, so increasing number of viewers
means more revenue.

The revenue of all IPL teams is classified into the following:

1. Media rights
2. Sponsorship
3. Ticket sales
4. Stall rental
5. Prize money

1. Media rights –

Each and every team enter into agreement with the BCCI (BCCI have the rights for organizing
the IPL) laying down the structure of revenue distribution among the teams. The BCCI collects
the revenue from the broadcaster and shares the revenue with the 8 teams after deducting certain
expenses.
The percentage is in proportion to your standings, just like a weighted average method. The
better ranked you are at the end of the tournament the higher is your share of media revenue.

The media rights forms about 60 to 70 percent of all types of revenue earned by an IPL team.
This income is referred to as Central rights income.

2. Sponsorship –

The logos on the players jersey, helmets, teams training kits and the barricades near the
boundaries all form part of sponsorship revenue. The more prominent the sponsors want their
name displayed, the more the money. Usually the names written on the chest in bold and behind
the players are the highest revenue generating sponsors for a team, as they are prominently
visible to the television audience. The terms agreed are generally for a year. The sponsors also
get certain added perks like organizing certain events with the team players and promoting their
brand as part of the sponsorship deal and also get a certain number of free hospitality tickets.
The sponsorship revenue forms about 20 to 30 per cent of revenue for an IPL team.

An event organised by team sponsor "Gulf" with the cskChennai Super Kings players:
3. Ticket sales:

The sales of ticket in stadiums form a part of revenue for the home team. The denominations of
ticket pricing are decided by the owners. A certain (small) portion of tickets are given to
sponsors and the BCCI as per the agreement. The pricing of tickets is usually determined based
on various factors such as seating capacity of the stadium, standard of living of the city etc. The
stadium in Kolkata (Eden garden) being the largest in India has tickets starting from Rs.300,
whereas in Chennai it is Rs.750. The main factor to be kept in mind is to ensure the stands are
filled in the stadium so that it ensures higher viewership and also better TV viewing experience
(sponsors are also happy).

The team management outsource the booking and collection of revenue to third parties like "big
tree entertainment (book my show)". These guys charge a commission of the total revenue from
ticket sales, usually between 1 to 5 per cent. The ticket revenue forms around 10 per cent of
revenue of the IPL teams.

4. Stall rental:

The food served to the various spectators is given on a contract basis to a third party who in turn
sub contracts it. The term is usually a fixed amount and collected on per stall per match basis.

5. Prize money:

The prize money goes to the owners and the amount is distributed at their discretion among the
players and support staff. (Terms lay down that, at least fifty per cent of the prize money is
distributed among the players).

Profit making teams:

The team that attracts the maximum crowd and maximum viewership is bound to make profits,
even though team performance is also one of the factors, it is not a major one. The team that
reported profits first is KKR. They achieved profits in the very first season even though they
performed dismally during that season.

The reason may be on account of the stars associated with that team, "Shah Rukh Khan", Juhi
Chawla etc. They reported a profit of Rs.13 cores in the first season.
Kings XI Punjab made a loss of Rs.1.52 Crore in 2011-2012 (IPL 4) down from a loss of
Rs.35.26 Crore in the previous year, according to data filed with the Registrars of Companies.
However, the team’s chief operating officer Arvinder Singh said: “The Mohali team made a
profit of around Rs.4 Crore last season (IPL 5). This year our team sponsorship revenues have
increased by 30% over last year.” The team has signed on 14 brands for this year which includes
a three-year title sponsorship deal with renewable energy products manufacturer NVD Solar.
India Win Sports Pvt. Ltd, which owns the Mumbai Indians franchise, posted a loss of Rs.38.3
lakhs in 2011-12 compared with Rs.15.4 Crore a year ago. Similarly, the Delhi team reported a
loss of Rs.63.9 lakh in fiscal 2012 compared with Rs.8.4 crore a year ago.
Royal Challengers Bangalore reported a loss of Rs.7 crore in 2011-12, the highest in at least four
years.
On the other hand, Kolkata Knight Riders posted a profit ofRs.10.42 crore in 2011-12. That is a
turnaround from the loss ofRs.11.3 crore it reported the previous year. Sahara Adventure Sports
Ltd, which owns the Pune Warriors franchise, is profitable as well, but its latest figures are for
the 2010-11 financial year.
The franchisees for Bangalore, Kolkata, Mumbai, Hyderabad and Rajasthan did not respond
to Mint’s queries.
The most profitable franchise, according to the limited data available for this analysis, is
the Rajasthan Royals. Its financial prudence is evident in its careful expenditure on player
auctions all these years. The holding company, Jaipur IPL Cricket Pvt. Ltd, reported a profit of
Rs.5.72 crore in 2010-11. It had reported profit of about Rs.22 crore in each of the previous two
financial years, but it is not clear from the Registrars of Companies documents whether there
was any one-time income in those periods.
CHAPTER 6
CONCLUSION
 CONCLUSION

The commercialization of sports is a very controversial and highly debated outcome in society.
Over the last two decades the sports business position has rapidly increased in its worth along
with the nitty-gritty of organizations involved. Player’s salaries have skyrocketed, the event of
teams and the number of leagues has increased, team attendance song have gone up. With this
recent boom in the sporting industry, everyone seems to lack a piece of the pie. The amount of
commercials, billboard adds, sponsors, and merchandise be sold is often overwhelming.

The role of sports to make life exotic; healthy and wealthy is terrific. Presently; it has been
extremely debatable whether involvement of corporate world in the field of sports invites more
pros than cons or not. Here I would like to conclude assert that this trend has more advantages
than disadvantages.

There is multifarious merit s of this phenomenon. First and foremost; the multinational
companies sponsor games, events and matches to promote their products by giving
advertisements through the games. To illustrate; offering free supreme quality dresses;
footwear’s playing equipments and printing names of brand on every nook and corner of ground
to attracted millions of people. Thus; nowadays sports divot in money spinning industry.

Furthermore; corporate world offers very expensive prize to allure players to win the game.
Therefore; rewarding hefty sum of money attracted millions of youngsters towards games.
Hence; companies inspire youngsters to shine their career in sports. Moreover; aspiration of
achieving most luxurious prizes like expensive cars; bikes and handsome money declared by
enterprises encourage them to give the best and win game and awards. Thus; the idea of
commercialization of sports deserves appreciation.

On the contrary; it has darker side too. Firstly; it has fact on spirit of loyalty due to expensive
rewards to allure players which may lead criminal activities such as doping; fixing and violence
behaviour. Therefore; the chance of illegal ways to win incredible awards; are gaining ground
due to surplus money in sports. Lastly; exposure to eke out surplus money in sports might
discourage youngsters to become doctors; engineers; teachers who are often paid less in some
countries. Therefore; world may face lack of other professional due to exceeding preference to
sports.

To sum up; sports have become part and parcel in our lives. Over exaggeration of sport by
money and other ways through companies should be restricted by government to make it
worthwhile for players and spectators.
 REFERENCES

WEB RESOURCES

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 books.google.co.in
 www.academia.edu
 www.articlesbase.com
 www.megaessays.com
 scholar.google.co.in
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