Investment analysis is a broad term for many different methods of evaluating investments, industry sectors, and economic trends. It begins by charting past returns to predict future performance, or evaluating individual securities such as stocks and bonds to determine their risks, yield potential, or price movements. The aim being to determine how an investment is likely to perform and how suitable it is for a particular investor. Most Financial houses do have a lot of literature on market indices in various sectors to be able to come to a fairly conclusive decision on the Investment portfolio mix. But, when it comes to investing in Sports properties, many financial books draw a blank!
The Sports growth story has been a recent phenomenon in India which has seen the rise & fall of many Sports leagues in the recent past, creating even more confusion in the minds of Sports oriented HNI or Sector agnostic PE & VC firms. An overall analysis of the leagues that have been conceived, executed, failed, grown and succeeded have indicated the following three crucial focus areas before deciding on putting your money !
1. Is the Sport a Team Sport?
Team Sports are seen to be having more potential to survive and grow vis-à-vis Individual Sports. Relying on Individuals to perform all the time adds to an element of uncertainty and increases the risk of the outcomes. Adding to the shelf life of an athlete, Individual driven sports have a more short term cycle against a team sport where the onus of performance is on the team as a whole. The survival of a team is more long term and hence automatically reduces the risk of Investment. Tennis & Badminton leagues are typical examples of Individual sports which are hugely specific star driven, unlike Cricket, Kabaddi, football, Hockey etc
2. Is the National Team of the Sport consistently in the Top at the World Stage?
A Sport which is performing well consistently at the highest International level where it is present, be it the Asian games, Commonwealth Games, Olympics or the World Championship, always has a brighter chance of a greater fan engagement in leagues of the same sport. Sport is all about winning & glory and the sentiment when a country wins a medal in a Sport, at the International level, is an unparalleled emotion going beyond the fan base existing for the Sport. The Investment risk is significantly reduced when the Sport has had a decade long of consistently being on the Global Medal tally. India has seen consistent International victory in Cricket, Kabaddi, Boxing, Wrestling, Shooting, Chess, Badminton in the recent past
3. Is the Sport OTT Friendly?
Growth of OTT Viewing in Sports requires no explanation. But what drives OTT Viewing is important to understand when analyzing sports digital viewing behavior. Duration of the game plays an important role and sports which are fast paced with a short duration pick up huge traction and can in turn grow the sport by leaps & bounds in a short span of time. A sport which can ideally finish within 60-90 minutes is ideally suited for OTT Viewing
India is currently seeing a mushrooming of Sports leagues and investors are looking for literature on the viability of these new properties. The above checklist can be a starting point, to make a careful decision while satisfying the desire to contribute to the society in what is now being termed by the Honorable Courts, as a public function!
