Making the Business Case: How Indian Corporates Can Do More for Sport

Corporate India already backs sport in many ways: cricket sponsorship from ITC’s Wills in the early 1990s to Dream11; investment in football, kabaddi and badminton; digital rights deals on platforms such as Jio, Hotstar, FanCode and GXR; grassroots programmes from Tata, Mahindra and JSW; CSR initiatives such as Hero MotoCorp’s Be A Sporting Hero and Reliance Foundation’s Sports for Development; and kit partnerships such as Puma’s with the Athletics Federation of India. This note by AM Sports Law & Management Co. looks at how to build on that.

Making CSR count for sport

Companies above the thresholds in the Companies Act, 2013 (a net worth of ₹500 crore, turnover of ₹1,000 crore or net profit of ₹5 crore) must spend 2% of their average net profit on Schedule VII activities, which include training to promote rural, nationally recognised, Paralympic and Olympic sports. Sport receives less than 1% of total CSR contributions. We suggest broadening the sport entry, and requiring companies whose products carry health risks and face advertising restrictions, such as tobacco and alcohol, to direct a substantial share (25 to 50%) of their CSR spend to sport, which promotes public health without adding to their financial burden. With ₹1,475 crore of CSR funds left unspent in FY 2022-23, we also recommend that MYAS initiatives be added to the Schedule VII funds that receive unspent amounts.

Partnerships, bidding and ranking

Public-private partnerships can bring capital and expertise to infrastructure and grassroots development, supported by tax deductions, simpler PPP rules, subsidies for community competitions, shared-use agreements and clear models for measuring return on investment. Infrastructure under the Khelo India scheme could be opened to competitive bidding by private companies, and existing stadiums could be offered on long-term operating leases, following models used for public land parcels in New Delhi. An Accredited Unified Ranking System for companies engaged in sport could reward high-impact contributors with recognition, an edge in bidding and tax benefits.

Adopt a sport, adopt a stadium

An Adopt-a-Sport programme, with incentives and a measure of exclusivity that stays within competition law, would encourage companies to grow alongside a less popular sport. Kabaddi and kho-kho show what is possible, with leagues whose viewership has outperformed badminton. Companies could also adopt stadiums, taking naming rights in return for maintaining the facilities.

Sustainable leagues

Of the 26 leagues the note reviews, roughly half survived to a second season and about a third are still running. Principles drawn from UEFA’s Financial Fair Play could give investors comfort. We suggest that federations direct private partners to invest in grassroots development in place of large sanction fees, carry out financial due diligence before granting long-term rights and seek bank guarantees.

Cross-promotion and collaboration

Sport can be promoted through tourism and other industries, as Abu Dhabi does with Formula 1 and the Premier League does with its trophy tours in India. Cricket, as India’s most commercially successful sport, could lead in supporting others through structured funding, shared facilities and multi-sport events. Technology and mental health firms could build sports-specific products and expertise that improve performance, which in turn makes sport more attractive to sponsors.

Lessons from abroad

Poland’s Sponsorship Tax Relief (2022), Germany’s deductions for sports partnerships, France’s Article 238 bis of the General Tax Code and Brazil’s Law No. 14.439 of 2022, which raised deductions for sponsorship of approved sports projects, all use tax policy to draw private money into sport. Qatar’s PPPs for the 2022 FIFA World Cup, the UAE’s events strategy and Saudi Arabia’s club privatisation programme under Vision 2030 show how partnerships and events can do the same. India already has the commercial and regulatory frameworks, and well-designed incentives can encourage companies to use them strategically.