Tread with care

First published in SportBusiness Magazine October 2011

The increasing importance of emerging markets has highlighted the complexities of sponsorship investment in key developing economies. As growth and marketing budgets stagnate in developed economies, major brands have switched focus to the developing economies and sponsorship budgets are starting to follow suit.

India is the most interesting case in point; there’s a confluence between corruption issues in Indian governance and a narrow range of available sports properties which has made India a challenging market for building differentiated sponsorship programmes.

The turmoil in Indian governance that’s engulfed Manmohan Singh’s government includes some significant scandals in India Sport, of which the Delhi Commonwealth Games is simply the most notable. Cricket, the Olympic Association, and numerous smaller rightsholders have faced accusations and counter-accusations over undisclosed payments, unfair tenders, and dubious ownership structures.

The particular interwoven nature of politics, sport, and major
corporations in India has meant the tendrils of the current wave of scandals have shaken the sports world far more than conventional bribery or doping scandals which can be blamed on the actions of rogue individuals.

The current problems, which it must be said are commendably being addressed by the SCI and IAAS, are exacerbated by a lack of real sponsorship alternatives. The dominance of cricket in India makes decision-making simple but creativity and differentiation infinitely harder. Sponsors are faced with the difficult choice between being one of the plethora of brands in Indian cricket, struggling to get their voice heard above the crowd, or searching for an audience in tangential sports.

Credit is due to the IPL, BCCI, the various teams and their commercial advisors for maximising their immediate returns from sponsors by appropriating the broadcast-audience-led approach familiar in the US sports landscape, but for prospective sponsors it has created an inventory of over-priced and over-branded assets.

The world’s largest democracy is one of the most exciting markets in the world right now; it is rightly at the centre of many global expansion plans, but for those looking to enter the market through sponsorship we’d advise they tread with care.

David Powell
Associate Director