Coal India joins the sports sponsorship league

By backing hockey tournament for first time, it closed a key gap in its sports promotion policy

When public sector undertaking Coal India signed up as the title sponsor of the Hockey India League a year ago, eyebrows were raised regarding the rationale behind the move. Coal India is the country’s largest coal miner, supplying the resource to power producers, metal manufacturers and cement makers among other users. As a B2B undertaking, therefore, skeptics argued there was no consumer connect for Coal India to establish. And hence the sponsorship of a high-profile event, they said, was out of place given that Coal India had coughed up Rs13 crore for the title sponsorship of the tournament in the first year.

This isn’t all. The three-year sponsorship deal entails an escalation in price. In the second and third seasons of the tournament, Coal India pays Rs14 crore and Rs15 crore respectively to the organisers for being a title sponsor. In short, Coal India is paying big bucks to be part of the tournament. Is it worth it?

“Hockey is our national game and we want more youth participation in it. We will also encourage football and will look at FIFA like options too in future. We have also committed to the national sports development fund to the tune of 25 crores each year for three years,” said R Mohan Das, director- personnel and industrial relations, Coal India.

For several years now most PSUs in India including oil marketing companies such as Bharat Petroleum and Hindustan Petroleum to the Railways, Services, Steel Authority of India, Air India as well as Coal India have actively promoted sports as part of their corporate social responsibility.

The charter for this, according to PSU sources, was laid down nearly three decades ago when the central government adopted a 16-point National Sports Policy. This included provision of adequate incentives to sportspersons; giving special consideration to them in employment; developing sports infrastructure in the country and nurturing talent at both the national and regional levels.

As part of this agenda, Coal India had set up a special autonomous body a few years ago, tasked with promoting sporting activities both within and outside the company.

While the amount spent so far on sports promotion as well as the number of sportspeople on Coal India’s rolls was not immediately clear (the company did not give a break-up of it in its latest annual report), firms such as Bharat Petroleum (BPCL) and Oil and Natural Gas Corporation have indicated that 67 and 167 sportspersons, respectively, are employed by the two PSUs.

BPCL and Hindustan Petroleum have also advertised heavily during key sporting events such as the Indian Premier League; promoting their lubricants brands as well as fuel retail outlets. Brand managers at the oil marketing companies have said that last-mile connectivity compels them to make these investments, since footfalls and sales are paramount here. Coal India, in contrast, has been muted on the advertising and sports sponsorship front, owing to the B2B nature of its operations.

New Hue

All of this is a thing of the past now. The mining major, according to sources, is looking to establish itself as a key sponsor of tournaments across the country as it seeks to take its sporting activities to the next level. An insight into the firm’s mind can be gauged by what its chairman & managing director Sutirtha Bhattacharya said earlier, “Coal India in its corporate citizenry role is actively involved in encouraging various sporting activities. We felt it was time to step into bigger shoes. So, this partnership (with Hockey India) is an extension of our long standing commitment to sports in the country.”

The emergence of new sponsors in the arena of sports, say experts, spells good news for tournament organisers in general. Sponsorship revenues, they say, go up. That trend, in fact, is beginning to show up as non-cricket sporting leagues emerge in India.

According to a 2016 report by GroupM’s entertainment & sports wing ESP Properties and SportzPower, a provider of sports and business news, sports sponsorship in India grew 12.3 per cent (in 2015) to Rs 5,185 crore from Rs 4,616.5 crore the previous year. The report pointed to the emergence of non-cricket sporting activities such as hockey, football, tennis, kabaddi, badminton and wrestling for the growth in sponsorship revenue, adding that more sports could join the list.

The report also highlighted that ground sponsorship, a growing constituent of overall sports sponsorship in India, was nearly evenly split between cricket and non-cricket sporting activities. In other words, of the total ground sponsorship spend in the country, cricket accounted for 51 per cent, while non-cricket sports accounted for 49 per cent, the report said.

Advertiser interest in sports, say experts, is linked in part, to viewer interest. According to Star India, which has the broadcast rights of the Hockey India League, the 2016 season saw a 40 per cent year-on-year increase in television viewership. Also, there were over 900,000 views on Star’s digital platforms including Hot Star and starsports.com for the edition, with Coal India’s cumulative exposure (on TV and digital) amounting to 7.4 million seconds.

The broadcaster also said that the 2016 Hockey India League generated over 2.2 million fans on Facebook, a 49 per cent year-on-year increase and saw an engagement ratio of 11.5 per cent, a bump up over the previous year.

Coal India, therefore, has clearly gained from its association with the tournament and now proposes to up the ante in the next few years. The business of sports is booming.