IPL - Incredible Premier League of India

Cricket is more than just a game, it is like a religion in India which has a huge fan following. This led to the birth of Indian Premier League (IPL) in 2008. Within a few years after its inception, it became the most lucrative annual sporting event of BCCI.

Overall impact of IPL is difficult to measure. It transpires from direct ones like stadium tickets, broadcasting to indirect ones like tourism and hospitality services. As per KPMG, IPL 2015 made a contribution of INR 11.5 billion (USD 182 million) to India’s GDP. The total economic output associated with IPL matches in India for 2015 is estimated at INR 26.5 billion (USD 418 million). This is the aggregate value of all transactions that took place as a direct, indirect or induced effect of the economic activity of the 2015 matches. IPL 2015 made a contribution of INR 11.5 billion (USD 182 million) to India’s GDP. The total economic output associated with IPL matches in India for 2015 is estimated at INR 26.5 billion (USD 418 million). This is the aggregate value of all transactions that took place as a direct, indirect or induced effect of the economic activity of the 2015 matches.

The global sports market comprising infrastructure, events, training and manufacturing and retail of sports goods is estimated at INR 37.8–44.2 lakh crore (USD 600–700 billion), accounting for approximately 1 per cent of the global GDP. In 2016, Jaideep Ghosh, Partner and Head, Transport, Leisure and Sports, KPMG in India mentioned, “The country’s sports sector is going through a significant transition. In February 2016, the government accorded an industry status to sports infrastructure, which is expected to attract investments from the private sector, thereby not limiting its role to just Corporate Social Responsibility (CSR) activities and non-profit organisations.”

Last year Lockdown had impacted sports equipment industry. Many games were postponed. Sales was affected by lockdown. The cricket equipment market has expanded over the centuries. Earlier, the bats used for batting in the game were more like a hockey stick, as the technology and advancements were made the cricket equipment market started bringing variations in the size, shape, and material used for the equipment. The advancement in the manufacturing process, availability of various raw material, increasing demand, awareness about the trends, price of the products, quality of the products, increase in the disposable income, luxurious lifestyles, trending sports events, celebrity endorsements and innovation in the existing types of equipment are the factors that drive the growth of the global cricket equipment market. However, the increase in competition, entry of new players, and availability of alternate equipment hinder the market growth. Adversely, investments in innovative types of equipment, increasing the comfort of the customers, merging of new brands and targeting the general market other than the mainstream help the industries to expand its market share.

As per McKinsey, In 2020, the sporting goods industry contracted for the first time since the financial crisis of 2007–08. Most brands, retailers, and manufacturers finished the year significantly in the red, despite a bounce back in activity after the first and before the second wave of COVID-19-related lockdowns. The exception was the Chinese market, which continued its role as the industry’s growth engine after expanding at an average of 16.5 percent a year (CAGR) from 2015 to 2019.

Sporting goods companies saw their market valuations fall in the early months of the pandemic. However, they tended to outperform the wider marker as the year progressed, with sports-equipment makers (particularly bicycle and digitally enabled fitness equipment) doing especially well. Sportswear companies were also more resilient than the rest of the apparel industry.

During slowdown, company were able to devote time to build products for future.The key players like StanceBeam and Kookaburra have collaborated to bring an advanced smart cricket bat sensor, which helps the players to analyze their game making them more meticulous. The mobile application launched by StanceBeam is used to gather all the information on the Bat speed, 3D Swing Analysis, Power Index, and other details just by a touch. Many other innovative ideas are like Helmet cams, sensors in the stump, bail and boundary lines, colored bats, various value additions in the bat and ball for providing comfort to the players have been launched in the market. 

According to Duff and Phelps, brand value of IPL 2019 was at 6.7bn$. BCCI has paid around Rs 3,500 crore as tax since the financial year 2007 – 2008. Until the IPL, the BCCI did not pay taxes as it was considered a charitable organization. IPL has signed a five-year contract worth $2.55 billion, with a $510 million annual fee, for its worldwide broadcasting and digital rights with Star India. Since the IPL lasts only 60 matches across six weeks in April and May, it means that each game has a cost of $8.5 million.The IPL’s demonstration effect has created a virtuous circle in the labour markets of other sports too. Hockey, badminton or kabaddi may not rival cinema or cricket in the overall market for entertainment, but all have seen the emergence of professional players. In kabaddi, for instance, a young player can earn between Rs 30 lakh and Rs 90 lakh a season. In the badminton league, players can earn between Rs 1.95 lakh and Rs 6 lakh a season. In the Hockey India League, where the number of teams has jumped from five in 2013 to 14 for the 2018 edition, players can potentially earn Rs 23 lakh. These figures may not compare with the earnings of even an average EPL team-member — the weekly wage for a footballer in bottom-of-the-table Burnley is ￡18,000 — but they far exceed anything these sportspeople could hope to earn even a few years ago. This expanding largesse also encompasses the huge amount of indirect employment in stadiums, hospitality, fitness specialists and equipment that sustain these events and create their own dynamic of growth.

Talking about the employment, let us restrict ourselves first to sports equipment manufacturing. Let us discuss about most exciting childhood friend of Indians i.e. cricket bat. It is a labour-intensive activity. Willow wood to a finished and branded bat is an 8-9 step process, all requiring craftsmanship. Meerut in UP and Jalandhar in Panjab are major manufacturing centres. Meerut has Sanspareils Greenlands (SG) factory spread over nine acre land. Unlike smaller manufacturers who outsource work to household units, SG, with about 1000 workers and two factories, makes its products in-house and handcrafts more than 350,000 bats a year. Meerut also house BDM factory named after B D Mahajan. In the 1950s the company hired seven workers and made 16 bats a day. Today BDM has more than 200 workers and makes 400 to 600 bats a day. Under-19 World Cup in 2008. BDM sponsored Kohli through his teens, giving him two bats a year, only to see him sign a bat-sponsorship contract with a footwear giant once he achieved international success. Then in 2013, Kohli signed a deal worth Rs 6.5 crore ($1 million) a year with tyre manufacturer MRF. BDM doesn’t supply bats under brand names.

India imported $11.7 million of willow in FY20, more than half of which came from the UK. It exported $14.38 million of cricket bats and leg pads, with the UK and Australia being the major destinations. The relatively high bill of willow imports vis-à-vis export value of bats is the rationale for a duty cut. “We have proposed a reduction in components and raw materials of many sports goods, especially those which go into the exports of finished goods,” said Gautam Mehra, joint director, Sports Goods Export Promotion Council as per ET. New Delhi hopes this will brighten the chances of a quickly negotiated India-UK trade pact.Bats used in professional cricket are usually made of English or Kashmiri willow. SG, SS, SF, MRF are among the major Indian cricket bat brands. They compete with Australia’s Kookaburra, Spartan and England’s Gun and Moore, Grey-Nicholls. Industry hopes import duties on English willow to drop from 10% to 5%.

The golden period for cricket-goods manufacturing in India was from 2008 to 2013. The number of youngsters playing cricket increased thanks to the popularity of the IPL, which began in 2008, and India's World Cup win in 2011. According to SG's Anand, there was a 15% to 20% year-on-year increase in demand during this phase. But the growth has slowed to 5% in the last two years combined. Manufacturers cited various reasons for this drop: too much cricket on TV; kids taking to other sports; and lack of significant growth in developing markets like the United States and Canada.

This is a major concern for an industry that relies so heavily on skilled labour. Players like FC Sondhi & Co in Jalandhar rents out community centres in neighbouring villages to teach skills and encourage involvement in the industry. But the economic landscape has changed in the decades since the cricket-goods industry took hold in India, and so have the interests and ambitions of the younger generation. Across the board - from household units to the biggest manufacturers - cricket goods are handcrafted. A skilled worker is more adept than a machine when it comes to dealing with the inconsistencies in the raw material, like a willow cleft, whose character can vary based on factors like the timing and extent of rain. Further, a machine can only produce a cricket bat with a fixed shape and weight. A craftsperson could, however, spend more time with the bat and refine it to meet different requirements.Not anyone can do it. It's a dying art.Here a worker normally earns Rs 7000 [$107] per month. Their kids would rather be salesmen at a mall than sit in front of a machine and work a lot.

It is just a glimse of labour intensivity of sportsgoods manufacturing industry. It requires attaracting, training and retaining the talent. Technology interventions are coming but labour is key for personalisation, customisation for each player.

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