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Sports leaders dodge the crunch

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Mihir Bose | 11:16 UK time, Friday, 24 October 2008

Credit Crunch? What credit crunch? That may well be the cry in global sports.

On Sunday, the NFL plays one of its regular season games at Wembley - the second time it has done so. The ratings for the first game last year were so good that, despite the economic downturn, the NFL is eagerly eyeing more television dollar revenues.

Rugby union, which hopes that next year its sevens will be accepted for the 2016 Olympics, also sees no reason to believe why business would now want not to be involved in sport.

In many ways cricket provides the most interesting example of bucking the downturn.

Like all stock markets around the world the Indian stock market, once insulated from global currents, has had quite a dive.

Yet last weekend when the Indian Premier League and its franchises met in Bangkok the talk was not about cutting back but more investment. Clearly many Indians believe they have found the cricket format which is a license for printing money.

The IPL cap for purchasing players has increased from $5m to $7m. In addition there is to be a one-month trading window from 15 December and this will not be subject to budgetary limits.

The franchises sold earlier this year, long before the crash, did not come cheap costing up to $112m, but already they have recovered 80% of their money. Some franchises have increased in value to $300m.

Mohammad Asif

Not bad for a start-up which was not even a gleam in the eye of the Indians a year ago.

And it is the IPL which is driving other money-making ventures in cricket, such as next weekend's Allen Stanford's $1m-a-man match in Antigua.

The buoyancy of these sports reflects the fact that they all see themselves in a race to be the number two sport in the world, number two to the unchallenged number one world sport - football.

Interestingly the strength of these wannabes at number two spot also shows how they interact with football.

So in India Kunal Dasgupta, the chief executive of Sony Entertainment, which has the rights to the IPL says that young Indians, aged 15 and under, are flocking to football more than cricket because of the attraction of the Premier League and the Champions League.

For these Indians the televising of the matches comes during peak viewing times. This does not apply to American sports such as NFL or basketball, which may explain why it has not taken off in India.

This must be good news for the Premier League. It will eye the Indians markets for a substantial rise in revenue when it sets about doing its next television deal.

Indeed such is the mood of optimism that the leaders in the sports industry were entertained to a lavish meal near St Paul's Cathedral in London on Thursday followed by a conference on Friday telling us how sports sell when nothing else seems to do so.

But is this not just the sort of hype you would expect from the people who run these sports? Surely sports cannot buck the economic turbulence as they say?

Before I answer that question let me tell you what happened during a breakfast meeting with those involved in either running or televising rugby, NFL or cricket...

One journalist asked: "Is sponsorship in these difficult times an indulgence, as jobs are lost and firms close down?"

No sooner had the journalist uttered the words then one of the sports representatives reacted as if the journalist had offered him violence.

He stopped munching his salmon sandwich and declared that sponsorship was not an indulgence, those days were long gone. Adding that sponsorship was very good business, more so now.

The question was in the context of the fact that Royal Bank of Scotland (RBS), now virtually a UK government bank, has been sponsoring cricketer Sachin Tendulkar and RBS advertisement is very prominent in the stadiums where the India versus Australia series is being played.

Sachin Tendulkar

Recession or no recession, RBS sponsorship of Sachin Tendulkar still makes good commercial sense. That is the message the leaders of the sports industry are giving.

Nobody knows how deep this recession may be, or how long it may last. But for the moment sports, certainly, are not singing a song of doom and gloom but one of remarkable optimism. But that, you could say, is sport in a nutshell.

It has the capacity to breed optimism even when there seems nothing to be optimistic about.

And as any sports fan knows, such optimism often proves misplaced.

Comments

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  • 1. At 2:00pm on 24 Oct 2008, homeoftheshoutingmen wrote:

    This comment was removed because the moderators found it broke the House Rules.

  • 2. At 3:04pm on 24 Oct 2008, jamminben13 wrote:

    I never want to be critical on these comments as it does seem petty and spiteful when you read others spouting aggressive poison, but I must say this particular blog is severely lacking in any substance Mr Bose. I normally like that you give us a different view of the sporting world and try to inform us of the political background etc and as I started reading this week's offering I thought there would be more of that alternative perspective.

    It seems though as if mixing it at these breakfast meetings etc has gone to your head, in between the Salmon sandwiches and St Paul's Cathedral drivel perhaps you could have told us how sponsorship is no longer just a luxury, how is it commercially a good option etc etc.

    I understand the trials of being sport editor involve you attending these lavish functions but please try to tell us what happens at these events and what relevance it has to us or the story and not just this self-congratulatory piffle.
    I apologise if this comment offends.

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  • 3. At 3:32pm on 24 Oct 2008, flenderson wrote:

    I have to agree with Jamminben's comment - is there any chance of some actual details Mihir?

    I'm absolutely no expert but still would have thought it very obvious that the sponsorship of sport is, generally, still good business; people are still going to be obsessed with sport regardless of how volatile the financial markets are, whether we're in recession or not, etc etc.

    I'd be amazed if the 'sports representative' simply said it is good business sense and then stopped there, without going into at least a little further detail?

    Without any more in-depth analysis, this article doesn't actually say, well, anything.

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  • 4. At 7:11pm on 24 Oct 2008, stopthepress wrote:

    Mihir will you be reporting on "Downturn '08"? Looks like the BBC have bought the rights.

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  • 5. At 8:37pm on 25 Oct 2008, invisiblenewsman wrote:

    Mihir...just a few short weeks ago you were telling us how the credit crunch had forced down the asking price of Newcastle United. (complete with a raft of incorrect prices - both of Mike Ashley's purchase and sale) But now - hey presto- the credit crunch doesn't apply to sport...isn't this danegrous stuff for the BBC to be touting?..aren't you supposed to offer us facts? Put yourself out of your misery and stop 'blogging'

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