When it comes to Formula 1 – three things are discussed to death – Huge money, cutting edge technology and glamour. Clearly, for a new team, it would take years to come to terms with the big spending giants like Ferrari, McLaren, Toyota, RedBull etc. However, Force India has done the unthinkable by earning their first podium within only a year and a half (around 30 races)

While critics speculate on a lot of things including this as a tactic to put pressure on the Indian Sports authorities to change their current stance on Formula 1, the progress made by Force India is spectacular nevertheless. Read on to understand the opportunities that have suddenly sprung up in this industry of Sports entertainment.

1. Sports franchises for media presence - Every sports franchise at the top of its game receives huge media coverage. Whenever a sports India driver goes up on the podium, he & effectively the sponsors on the driver’s clothes get excellent media presence. Clearly, getting associated with franchises is an excellent opportunity for corporates wanting to showcase themselves to a huge audience. Formula one is watched in an estimated 70 countries across 6 continents. Whenever a TV show is beamed and it shows a car, all sponsors’ names get displayed as well. Now thats excellent brand promotion. (Notice the brands on the car alongside) . So when the 5 lights illuminate and go off signalling the start of the race at Monza today, Force India (and effectively its sponsors!) would be watched by an audience estimated to be 10 mn across continents! Exciting for sponsors, isn’t it?

2. Merchandise -There is a huge opportunity with respect to merchandise. Do you or do you not find it ‘cool’ to strut along wearing a Manchester United T-shirt? There is a definite chance that a Force India or a Rajasthan Royals or a Bangalore Royal Challengers would acquire that kind of status in the coming years. Now that is value for the sponsors associated with teams! If distribution mechanisms are strengthened, we would soon find IPL/Formula 1 tshirts flooding the textile markets across Indian cities.

Notice the prominent brand presence

3. Franchises as brands – Over time, such sports franchises would become brands . Incidentally UB Group has investments in premier football clubs of India . There is so much value in these brands and fan following associated that sports over a longer term is a winning proposition provided your team is always in contention to go to the top. Again, this ‘getting to the top and staying there’ isn’t an easy proposition by any stretch of the imagination. But then, getting best in business in your team definitely increases chances. And of course the CEO of the franchise watching his team perform definitely puts added pressure on the team. Notice how corporate honchos – right from Mukesh Ambani to SRK to Roman Ambramovich to Vijay Mallya are personally present at sports events. Its about brands and its serious business as far as the business community goes.

4. Franchises and IPOs – Very recently, strat.in had an article on IPOs. Perhaps a new industry is emerging on the IPO front – Sports franchises. The 2008 IPL champion Deccan Chargers indicated that it wanted to go for an IPO, with stock options to its players. Just yesterday, Kaushik posted an article indicating that Dr. Mallya was thinking on same lines – but a common company for all his sports investments across cricket , football and F1. So all you IBankers (current and aspiring) reading this article, don’t be surprised if in the near future, you are creating Research reports on a new industry – Sports franchises!

Perhaps the opportunities I have raised here are the tip of the iceberg. But one thing is for certain, the ‘force’ of audience involvement is certainly there with Force India and other such sports brands. Cheers to India and its sports industry which is finally showing signs of blossoming!

Looking forward to reader comments about sports and opportunities here!

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Image credits: Paddocktalk Automolove

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