Sport Sector

Summary

1.0 The macro story

1.1 The scale and key structural drivers of the sector

Political impetus to improve India's sporting performance

India's elite sports performance has been patchy

• while India has performed well in cricket, badminton, hockey, boxing, wrestling and shooting, its performance and participation at most international sporting events has been underwhelming
• between 1990 and 2014, India's share of medals at the Asian Games and Commonwealth Games improved 3 per cent and 1.5 per cent respectively¹²
• at the 2016 Rio Olympics India won two medals and ranked 65th in the total medal tally.

There is growing expectation to improve high performance

• Prime Minister Modi is personally invested in improving India's global sporting success
• underlying this is a belief that India's performance in sport should be commensurate with its population and growing economic and strategic heft and that this should be projected regionally and globally.

To realise its ambitions, India requires a long term strategy to systematically build a sports ecosystem

• grassroots participation and sports education, technology and infrastructure are developing from a low base (for example the sum total of current Central Government talent identification and training schemes reach just a fraction [0.0067 per cent] of Indians in the 8–25 age group¹²)
• performance is hampered by a lack of a culture of community participation in sport
  • this is compounded by little physical education in schools, inadequate facilities and governance issues.

The Government of India is working to address these constraints

• under its Khelo India policy the government has committed to mainstreaming physical education in the school curriculum, supporting education pathways for young Indians aspiring to be elite sportspeople and providing grants for the creation of sports infrastructure and training facilities
• Khelo India has a budget of $350 million over three years
• the establishment of India's first National Sports University is underway and existing universities are being funded to deliver degrees in sports science and sports medicine
• Prime Minister Modi has formed a Mission Olympic Cell tasked with improving the quality of high-performance coaching and athlete training
• there are plans to remodel the sports bureaucracy to professionalise the management of elite athletes.

Hockey Australia's Hookin2Hockey Training Clinic in Mumbai, undertaken as part of the Australia-India Council 2016 International Relations Grants Program. [Tom Winter, Hockey Australia]

The growing role of the private sector

More companies are entering the Indian sport sector

• the sport sector in India has historically been government-led with private participation limited to public-private partnerships in infrastructure development and sports academics
  • this balance has shifted in recent years
• the Indian sports market grew almost 10 per cent between 2013 and 2015, from $870 million to $950 million¹²
• this is partly being driven by India's consumer class which provides a large viewer base for professional sports and is luring greater sponsorship money.

The formalisation of Corporate Social Responsibility has led to increased spending on sport by the private sector

• companies with $100 million net worth, revenue of $200 million and/or net profit of $1 million are mandated to spend 2 per cent of average earnings on Corporate Social Responsibility and sport is one of several categories of eligibility
• Corporate Social Responsibility investment in sport remains low, just 0.7 per cent of overall spend in 2015–16,¹² but several conglomerates fund large-scale, holistic sport programs to support increased community participation while creating talent pools for professional leagues or teams in which they have a stake.

The emergence of sports leagues has also increased private sector participation in the sector. It has boosted the sports industry through improvements in performance and participation and an increase in fan base and sponsorships

• following the successful rise of the Indian Premier League which started in 2008, nine more leagues spanning sports such as football, kabaddi, badminton, tennis and hockey were established between 2013 and 2016.

Australia's competitive advantage

Australia has a well-developed sport industry and considerable expertise in several areas of priority for India

• the Australian model demonstrates the need for grassroots participation and a strong supporting structure such as workforce development, sports science and medicine as well as governance to be successful
• Australia has world-leading sports science, equipment and intellectual property
  • Australian company Catapult is a world leader in sports analytics, and Deakin University is ranked as the world's best for sports science³⁴
• Australia spends over $12 billion (public and private) annually on sport and sports infrastructure.¹⁰⁶

India looks to Australia as a natural partner

• the highest political levels in India have shown interest in engagement and much of Australia's cooperation to date has been government-led
• the perception in India of Australia as a strong sporting nation is underpinned by our long cricketing relationship and Olympic success relative to population size, putting us ahead of other countries.

1.2 How the sector will likely evolve out to 2035

India's sports ecosystem will develop

To increase medal tallies in the short to medium term, the Indian Government is likely to target the development of a select list of sports in which India has demonstrated potential. These will include athletics, badminton, boxing, cycling, gymnastics, hockey, shooting, squash, swimming, table tennis, weightlifting and wrestling

• a focus on achieving success in these sports will create some positive knock-on effects across the sports system.

However, the systematic wide-scale reform required to mainstream participation and build a sports culture will be a longer term endeavour than 2035

• the scale of required reform and costs are substantial.

Out to 2035 the demand for foreign expertise and exposure to world-class training environments overseas will grow

• even as reforms gradually improve the domestic facilities and services available to support India's elite athletes
• Australian professionals will continue to occupy paid positions coaching and training Indian athletes.

While the definition of success is India increasing its competitiveness, Australian support to India is unlikely to directly undermine our own athletes or pose a serious threat to Australia's position in international competition rankings in the medium to long term

• for example, India has Australian cricket and hockey coaches at the highest levels but that does not directly affect Australian international standings.

New markets will emerge

New sub-segments of the market have emerged as the sport sector has gained momentum over the past decade. Rising trends in participation and consumption of sport are likely to drive their continued growth out to 2035

• the recreational sports market will keep expanding on the back of positive trends such as a focus on healthy lifestyles, a growing middle class with higher disposable incomes and increased internet penetration
• India's sports goods industry (including apparel, equipment and footwear) will grow, having already risen from $2.7 billion in 2013 to $4.8 billion in 2015¹²
  • key export markets for India include the United Kingdom, United States, United Arab Emirates, Australia, South Africa and Germany
  • Indian sports goods have also been exported for rollout at global sporting events¹²
• Inbound and outbound sports tourism will increase
  • India has hosted several mega sporting events that have attracted tourists and sports enthusiasts
  • a growing number of tour operators and agents are specialising in servicing the requirements of this tourist segment
  • greater affluence in India's consumer class will see more outbound tourists, including those attracted to international sporting events.

Global trends and disruptions will affect how our sport sectors behave and interact

There is increasing recognition of the role of sport in maintaining a healthy population. Globally among adults, inactivity is now as big a killer as smoking.¹⁰⁶

Big data, analytics and new technologies will continue to re-shape sport. Integrated athlete management systems allow coaches to capture data in real time and continually modify training programs. Concepts like wearables, e-sports and virtual reality could significantly disrupt the sector in the long-run.

The rise of digital media is changing dynamics in the sport sector globally. Consumers are increasingly using digital channels, especially social media, for sports content and updates. For example, Star India launched an online content platform for the Cricket World Cup 2015 (hosted by Australia and New Zealand) and over 49 matches drew 87 million viewers.¹⁰⁷

Augmented reality and virtual reality are changing the way fans consume sports content. These technologies enable sporting entities to become more personalised and integrated into players' and fans' daily lives. Together with advanced analytics, these technologies could revolutionise sports training, giving a significant advantage to companies developing expertise in these technologies.

Australia's sporting capabilities will need to evolve to maintain competitiveness

If Australia is to remain a high-performing, internationally regarded sporting nation, it will require sustained funding and innovation to keep pace with increasing investment and professionalism among competitor countries

• by 2035, Australia's relative capacity in certain areas may decline without greater levels of investment
• we are not on track to still be world-leading in sports science by 2035.

To capitalise on commercial opportunities in this sector, Australia will need to continue to improve data and technology use, and ensure the quality and availability of sporting infrastructure. This will require more, and more effective, use of government funding.

What we want the relationship to look like in 2035

• Australia has cemented its position in India as a partner of first choice for sports cooperation, having played a constructive role in developing India's national sports policy.
• Academic links are deeply entrenched.
• Sporting federation relationships and cooperation are institutionalised.
• Australian programs (such as on physical literacy) are being run in Indian schools.
• The foundations of the Australian sector have been strengthened through expanded non-government sources of revenue, including from India.
• The sector is working with even greater innovation and efficiency, with expanded sports products and expertise for export.
• Australian expertise in managing sporting events and sports governance is well entrenched in India.

2.0 Opportunities for partnership

2.1 Export opportunities

India's sport sector will hold a range of opportunities for Australian companies out to 2035, though many of these will be piecemeal.

Education and skills training across sport-related fields and at all levels is in high demand in India. India's interest in what we offer could be used to pilot broader sectoral changes, such as joint degrees. Opportunities include Australian providers offering:

• joint university degrees in all sport-related fields, such as sports science, sports medicine and sports management
• professional development programs for teachers, trainers and coaches at all levels (community sport to high-performance)
• executive training and leadership development programs
• online curriculum for massive open online courses or full credit/award courses, noting that regulations still prevent the latter
• development of primary and secondary school sports and physical education curriculum.

Other opportunities include:

• The size of India's consumer class presents a significant market for sports media and advertising. Growing India's interest in domestic Australian sport (from cricket to Australian Football) can generate additional sponsorship money. Likewise, the growth of an Indian sport in Australia (such as kabbadi) can attract Indian investment. Spin-offs to this would be greater brand recognition for Australia in India and stronger people to people links.
• Consulting services and intellectual property in the fields of sports governance, coach and athlete training, sports science, sports management, major event management.
• Training camps on a commercial basis for elite Indian athletes and coaches in Australia's high-performance sports facilities, including Australian Institute of Sport and state Institutes of Sport.
• The application of data analytics and data intelligence to sports performance and technology, where Australia is likely to be a world leader.
• Sport tourism built around major international sporting events and their representatives in both Australia and India.
• The development of multi-use facilities – the design, construction and management of sporting precincts.
• The import and export of sports equipment, including new technologies such as monitoring devices, as well as sports food and dietary supplements, in some cases through joint ventures, leveraging India's lower cost manufacturing base.
• Services, consulting and program design in sports medicine, physio, biomechanics and nutrition.

2.2 Collaboration

The Australian Government, along with state governments, could play a major role in collaborating with Indian counterparts as they seek to establish national sporting frameworks and systems.

There could be circumstances where the private sector, particularly academia, also engages with Indian governments on a commercial basis or where the Australian Government works in partnership with the private sector to engage India.

While commercial outcomes may be limited in many collaborations, supporting India's sports agenda can help Australia entrench positive relationships with Indian governments and businesses, including to:

• reinforce the Australian brand in India, as an avenue to build up Australia's image as a knowledge partner, and to advocate for priorities such as gender equality and disability inclusion
  • one way to do this could be to further leverage the celebrity status and diversity of Australian and Indian sportspeople to promote Australia's economic and marketing objectives in education, health, science and innovation, tourism.

In both countries, the sport sector is spread across central and state governments, business, the media and academia. This presents an array of institutions and companies which could be an affiliate in a partnership.

Key partners in India

Government

• Central Government (Ministry of Youth Affairs and Sports, Sports Authority of India)
• State Governments
• Sports Sector Skill Council

Private sector

• Corporate conglomerates with Corporate Social Responsibility sport interests
• Professional leagues
• Schools and universities

Key partners in Australia

Government

• Australian Sports Commission (including the Australian Institute of Sport)
• State governments and institutes of sport
• Australian Sports Anti-Doping Authority (ASADA)
• National sporting organisations

Private sector

• Universities and training institutions
• Professional leagues, including the Australian Football League (AFL)
• Sports equipment, technology and service providers

Types of collaboration or partnership

Community sport and development

• India needs a comprehensive schools sports policy and systems to increase youth participation. Australia could provide technical assistance to India with system design, including under the framework of the bilateral MoU signed in 2017, with a focus on
  • affordable sports which don't need much infrastructure
  • establishing curriculums and physical literacy programs
• an example is Australia's Asian Sports Partnerships grants which support programs promoting community health, social inclusion, and youth participation.

Sports governance

• Australian Government, academia or consultancies could work with Indian central or state governments or federations to design sporting systems and sports federation management
  • as Victoria University is doing as a 'knowledge partner' to the Government of Punjab on a commercial basis
  • as the University of Queensland is doing in partnership with Jindal University to deliver courses on sports law and governance.

Australian and Indian Governments could strengthen cooperation in the field of sports integrity and anti-doping and corruption efforts between ASADA and India's National Anti-Doping Agency.

Academic engagement, including on a commercial basis, between Australian education providers and Indian ministries, universities and other sporting institutions

• Australian providers could work with the Sports Sector Skill Council to deliver specialised training
• the MoUs in place between Australian universities and the Sports Authority of India provide a framework to work with India to establish its national sports university
• Australian personnel could be seconded or 'deputised' in Indian universities or sporting federations.

Australian education and skills providers could target commercial partnerships with private companies investing in Corporate Social Responsibility initiatives, private sports academies and private schools.

Australian universities, research centres and sports science bodies could enter into commercial research and development partnerships with India.

Australian sporting organisations and institutes could host Indian sports managers, coaches, health professionals and administrators for short courses and training camps in Australia.

Australian sporting events, teams or leagues could seek sponsorship from Indian companies, or vice versa.

2.3 Investment

As in other sectors, India is looking to attract foreign investment to support the development of its sport sector, particularly in

• sports infrastructure, which was granted 'industry' status in 2016 to encourage increased investment
• India's professional leagues, which require significant investment to develop and maintain infrastructure and achieve sustainable returns
  • even in the Indian Premier League, only a few teams are profitable after a decade – largely due to management challenges
• the advent of professional leagues in India and greater public interest in international sporting events is also driving growth in sports broadcasting, another source of investment opportunity.

3.0 Constraints and challenges

3.1 The policy and regulatory environment

As with other sectors, public sector capacity to manage sport is limited at both the central and state government levels. Funding is slow to mobilise. Challenges in navigating and engaging with multiple government bodies can delay effective collaboration.

The lack of 'industry' status for sport (sports infrastructure aside), the absence of clear guidelines for business operations and the unorganised nature of the sector affects investor confidence

• this leads to inadequate information and data, compounding uncertainty.

A lack of accountability in sports federations limits their effectiveness in supporting India's elite athletes. It will also pose challenges for direct partnerships until governance models are improved.

As with the education sector, there are regulatory challenges around curriculum, certification and online delivery [see Chapter 3: Education Sector].

3.2 Skills, infrastructure and other constraints

Constraints and challenges on the Indian side to growing its sport sector

Outside cricket, inadequate incentives for most full-time players deters youth from pursuing sports professionally

• scholarships and endowments are fraught with bureaucratic red tape or lack of process transparency
• post-career support for athletes or coaches is lacking and further limits professional participation
  • there is little or no post-retirement support in the sector such as pension schemes or support for launching private ventures.

Skills and education gaps exist at all levels of professionalism

• at the grassroots, low integration of sports into school curriculums and a lack of proper physical education and sports training are major factors limiting school sports participation and physical literacy among children
• a nationwide shortage of professionally trained and qualified coaches limits the quality of training for aspiring athletes
• at the elite level, limited higher education and research in sports sciences (including nutrition, psychology, medicine and sports education) hinders efforts to maximise player performance
• a lack of executive-level sports management training opportunities inhibits the development of trained professionals to manage leagues and major sporting events.

A shortage of sports infrastructure, especially at the grassroots level, and asset management of existing infrastructure is poor

• there is limited investment in high-performance sport infrastructure and India has few world-class facilities at which elite athletes can train to international competition standards
• it is estimated that India spends about $670 million on youth affairs and sports through the Centre and state budgets, a third of the amount spent annually by the United Kingdom on sports infrastructure and training¹²
• some of the reasons for inadequate infrastructure development include:
  • insufficient private sector funding
  • restrictive guidelines for availing government grants for sports infrastructure; only select government entities are eligible to undertake infrastructure development projects
  • poor asset utilisation and inefficient monetisation planning lead to suboptimal returns on developed sports infrastructure assets, which deters further investment.

There are cultural barriers to grassroots participation in sport in India. There is a commonly held view that sport is an unnecessary diversion from children's studies rather than an integral part of education and development and a potential career pathway. Prime Minister Modi's priority on sport as a means of engaging youth and lifting national performance could change this, but will take time

• restrictions are compounded for women and girls, for whom participation in sport may be discouraged, particularly in more conservative states
• international research increasingly points to academic benefits for children with regular physical activity.

Sport faces the same business environment challenges as other sectors in India. For example, during the New Delhi Commonwealth Games Indian companies withheld payments from Australian companies, challenging them to litigate.

Constraints and challenges on the Australian side

There is a misperception that supporting India develop its sports ecosystem will work against Australia's own competitiveness.

The sector lacks a unified voice, affecting its ability to create a coordinated offering of the scale required by India

• sports governance is fragmented, with complex, federated governance structures
  • there is potential for misalignment between national and state sporting organisations and between the national and state governments.

International engagement by Australian sports institutions – both government and private sector - is limited

• the sector is domestically focused
• many Australian sports institutions have limited funds at their disposal to invest in international growth opportunities, including in India
• India is a price-sensitive market and revenue models need to be adjusted compared to developed western markets.

A number of foreign players are competing in the sector, including the United Kingdom, Canada and Japan

• many of our competitor countries have recently replicated and surpassed Australia's innovation and investment in the 1980s and 1990s
• India is not a crowded market and demand will outstrip supply, however while the Central Government continues to be a key partner in progressing cooperation, Australia may have to compete for bandwidth.

4.0 Where to focus

For Australia, trade and investment opportunities in sport are not limited to particular Indian states as the demand is nationwide, but several states have more advanced sports systems and present themselves as more prospective targets. Sport could also be used as a supplementary point of engagement in states Australia is targeting for other reasons. The Central Government will remain an important partner.

Aside from the Central Government holding responsibility for the management of India's national teams, sport is a state subject under the constitution with sports policy frameworks varying significantly across states.

Several states have introduced initiatives to improve sports infrastructure at the grassroots level, provide financial aid to aspiring elite athletes and monetary rewards and government jobs to high achievers.

Haryana and Manipur are considered to have strong sporting cultures and have produced many prominent sports personalities, including in boxing, cricket and wrestling. Manipur will also host the main campus of India's first National Sports University.

Punjab, Kerala, Gujarat and Rajasthan are states in which Australian state governments and universities have developed sporting relationships which could be expanded.