This post is a part of my paper on a marketing concept "Curiosity Selling".
there are three aspects in which I made the study on and sports being one of them.
Sports Power
“Sports” has now become more commercialized in terms of ownerships of the best sporting clubs on earth. Some of the well known and less explored avenues are discussed below.
Formula1 Racing
If ever there was a man who could make a silk purse out of a sow's ear it is F1 boss Bernie Ecclestone. A recent report reveals the 2009 financial results for UK-based Delta 3, the company which receives all the revenue from fees TV stations pay to screen F1 as well as the fees paid by circuits and sponsors of the sport. Remarkably, despite facing the worst recession in living memory last year, Delta 3's revenue still rose 6.4% to a record £680m with its operating profit after costs more than doubling to £119.4m. Around £278m of Delta 3's revenue comes from fees paid by broadcasters with another £278m from fees paid by Grand Prix promoters. The remainder comes from series sponsors including DLF and Allianz.
English Premier League
The Premier League has the highest revenue of any football league in the world, with total club revenues of €2.326 billion in 2008–09, and is the second most profitable after the German Bundesliga. In 2010 the Premier League was awarded the Queen's Award for Enterprise in the International Trade category by Her Majesty Queen Elizabeth II. The Premier League was recognized for its outstanding contribution to international trade and the value it brings to English football and the United Kingdom's broadcasting industry. At present Sky and ESPN have exclusive rights to broadcast the Premier League - the current domestic contract is worth pounds sterling 1.78bn over three years.
Indian Premier League
In 2010, IPL became the first sporting event ever to be broadcast live on YouTube. Its brand value was estimated to be around $4.13 billion the same year. According to global sports salaries review, IPL is the second highest-paid league, based on first-team salaries on a pro rata basis, second only to the NBA. It is estimated that the average salary of an IPL player over a year would be $3.84 million. The brand value of Chennai Super Kings (winner IPL 2010, finalist IPL 2008 and semi-finalist IPL 2009) is estimated at USD 48.4 Million.
On 15 January 2008 it was announced that a consortium consisting of India's Sony Entertainment Television network and Singapore-based World Sport Group secured the global broadcasting rights of the Indian Premier League. The record deal has duration of ten years at a cost of US $1.026 billion. As part of the deal, the consortium will pay the BCCI US $918 million for the television broadcast rights and US $108 million for the promotion of the tournament. This deal was challenged in the Bombay High Court by IPL, and got the ruling on its side. After losing the battle in court, Sony Entertainment Television signed a new contract with BCCI with Sony Entertainment Television paying Rs.8,700 crore (US$1.93 billion) for 10 years.
Broadcast rights as a measure of customer curiosity
All these above mentioned entities have made revenues based on the broadcast rights and the tickets sold. This is based on the fact that any sport can be successful on the basis of the interest of the spectators. As TV channels are ready to grab the deals with such huge sum of money, it gives a clear signal that curiosity among people is high which again accounts to their TRP. Another fact is that Set Max had charged 1 million rupees for every ad of 10 seconds during the semi-finals and final matches of IPL 2010. This clearly is a measure of the curiosity and interest of the viewers, who eventually are the spectators of the game.
Spectator Interest Model
Enough boring you with facts that are freely available on the internet. Now, let me come to my point of view.
From the above observations, it is so clear that the revenue generated by any sport is directly related to the interest that the spectators exhibit. Taking this into account, a model can be proposed namely the “Spectator Interest Model”.
The main parameters taken into account are the curiosity of spectators and commercialization of the sport.
The model can be given as,
The model is based on the idea that “sports” has changed its dimension in recent times with the advent of club culture and de-nationalization of teams. The broadcast rights and tickets for these club games have considerably seen a hike and almost crossed the values of those related to international games.
This trend is clearly a result of the organizing committee and the promoters of the clubs playing with the curiosity of the spectators right from the regional impact by splitting of teams in accordance to zones or states, selection of international players, inclusion of local players, venues and various other factors. All these factors account to dragging of the spectators with a feeling of belonging which blends and comes out as curiosity and support to their sides.
Look forward for my next post on the true management "Gurus" and new promising ways of making money.
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