Thursday, February 22, 2024

GMR looks to unlock value from sports division

The company is also exploring avenues to secure a strategic or financial investor for the holding company, Sagar said, while refraining from sharing specific details.

“There is a very strong intent on unlocking the value at the GMR Sports level, and we are exploring as we speak. We have not decided on whether it will be a stake sale or listing. It is difficult to give a timeframe. These are opportunities that will be evaluated over some time,” the CEO said in an interview with Mint.

This move is part of GMR Sports’ broader strategy to maximize its potential in the competitive sports industry.

Besides a 50% stake in the Delhi Capitals IPL franchise, GMR Sports owns UP Yoddhas in Pro Kabaddi and the Ultimate KhoKho franchise Telugu Yoddhas.

“We were the original owners of the Delhi Daredevils, but in 2018, we divested a 50% stake in the team to the JSW Group. Last year, we added the Women’s Premier League team too. We also own India Capitals in the Legends League.”

On a global scale, GMR Sports boasts Dubai Capitals in the UAE’s International League T20 and has recently agreed, in principle, to buy a minority stake in the Major League Cricket franchise, Seattle Orcas. Investors in the Seattle Orcas include Satya Nadella, Soma Somasegar, Samir Bodas, Ashok Krishnamurthi, and Sanjay Parthasarathy.

Originally an infrastructure company, GMR entered the sports business following other large groups that ventured into this segment.

Reliance Industries, Adani Group (Adani Sportsline), Tata Group, and JSW Group are a few of the major companies that own sports franchises across multiple leagues.

“GMR sees a lot of potential in sports, which is why the sports business was carved out as a separate vertical with a very clear vision,” Sagar said. 

Under GMR Sports, the company intends to participate in any multiplayer sport in India, which it can evaluate and “see that it gives us meaning to participate as a business venture going forward”. 

“And if it is outside the country, we would like to limit ourselves to cricket for the moment. When opportunity comes in the global cricket market that’s how we have planned a strategy and plan to move forward,” the CEO said.

He compared the sports industry’s challenges and dynamics of profitability to startup culture, emphasizing the importance of team valuation and the long-term profitability model, drawing parallels to IPL teams’ success. 

Sagar highlighted the success of GMR Sports’ Pro Kabaddi team in terms of viewership and sponsorships. He expressed optimism about the potential of indigenous sports like Kho Kho, foreseeing significant growth in the franchise model over the years.

“Our Pro Kabaddi team is doing very well, both in terms of viewership as well as sponsorships. To be honest, you can’t speak about cricket and other sports in the same sense. They are chalk and cheese. But having said that, what Kabaddi has done to indigenous sports is any sport that’s lost in transition, Kabaddi has brought back the viewership and enthusiasm to watch the sport,” he said. 

“Kho Kho is also a brilliant sport to watch. It’s 28 minutes of pure joy. Probably it needs some more awareness, but whoever started watching it, is hooked on. This time the tournament was played with 18 cameras, and they have done a great job. I am one of the biggest supporters of the game. As the years go by, kabaddi and kho kho will make big waves in this franchisee model.”

Additionally, GMR Sports has ventured into the fitness sector with a new gym in Hyderabad. Sagar sees modern gyms as instrumental in brand growth and fitness promotion, expressing optimism about expanding to multiple locations across the country if the initial response proves positive.

“We find that modern gyms with facilities that are equal for athletes as well as normal common people is an excellent way to grow not only the brand but also bring the concept of fitness among people.”

“If everything goes well, we could have a few more Yoddha gyms all across the country. To start with, we are operating on our own, and going forward if it works, the franchise model should also be in the offing,” he said.

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Published: 11 Feb 2024, 03:24 PM IST

#GMR #unlock #sports #division

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