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Covid crisis: Cheaper IPL deals, no kit sponsor for India yet – cricket

Covid-19 has led to cricket — and IPL, one of its most marketable assets — offering reduced prices for sponsorship. Three IPL franchises roped in replacement shirt sponsors at lower prices. Vivo’s exit as IPL title sponsors led to a substantial revenue shortfall for BCCI, the mobile phone company pulling out this year after military tension on the border between India and China in eastern Ladakh. And there are no takers yet for a new kit sponsorship deal for the India team.

Nike was India’s kit sponsor, the deal which expires in this month worth Rs 87 lakh per match. New kit sponsors had been invited at a reduced base price of R65 lakh per match but neither Adidas nor Puma, who picked up tender documents, placed a bid by September 1, the deadline. BCCI has till December, when India tour Australia, to find one.

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Fantasy gaming company Dream 11 replaced Vivo at R 222 crore, the contract being 50% of what BCCI earned last year. At the time IPL chairman Brijesh Patel said: “In the given circumstances, we are happy with the deal. These rights are only for four months and only for this edition of the IPL.”

Dream 11 moving up the sponsorship ladder meant a vacant spot in the associate sponsorship space. Another IPL associate sponsor, Future Group, too moved away. The vacancies, said to be in the range of R40 crore each, have been filled by edu-tech platform Unacademy and fintech start-up Cred. “Well done bcci and team ..in spite of tuff markets ..,” Sourav Ganguly tweeted, the BCCI president tagging all eight IPL franchises.

Already burdened by the absence of gate receipts and a reduced share from the central revenue pool due to drop in the title rights’ value, franchises too have been forced to offer discounts to sponsors.

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“On gate receipts, it has to be seen what model BCCI will come up with. Sponsorships have been difficult but luckily for us, given the fact that we have long-term deals, most of them have stayed on,” said Mohit Burman, co-owner of Kings XI Punjab.

A source connected with franchise-sponsorships deals said most companies have come on board with 20-25% reduction in pay for this year’s IPL, beginning in UAE on September 19. “Typically, the eight franchises are divided in two sets for principal sponsorships: the top two are Mumbai Indians and Chennai Super Kings, followed by Kolkata Knight Riders (KKR) and then Royal Challengers Bangalore, due to Virat Kohli’s presence. They are in the range of R15-23 crore. The rest are all in R11-14 crore range, sometimes less,” said the source.

Daikin, who had signed as principal jersey sponsor for Delhi Capitals to boost air-conditioner sales for the event originally scheduled to start in March, dropped out when IPL got deferred. Co-owners JSW have picked up the sponsorship for a reduced price. Daikin’s deal was approximately worth R14 crore. “We at the JSW Group see this as a tremendous opportunity to step in as Principal Sponsor for the Delhi Capitals. There are few properties that garner the viewership of the IPL,” said Parth Jindal, chairman and co-owner of Delhi Capitals.

Rajasthan Royals too lost a bumper shirt deal. They had signed with Dubai Expo which got postponed. News network TV9 is said to have come in at a lower rate. The network has also booked space in KKR’s non-leading arm. “It serves both the parties well. From TV9’s point of view, going with IPL helps their image in the prevailing news market scenario. It takes a while to be No.1 in the Hindi news space and this will help in their quest. Between two franchises they will have visibility across 28 matches,” said Arshad Shawl, founder Alliance Advertising.

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“From franchise’s perspective, tying up with a broadcast partner who promotes your team’s on and off-field activities 24/7 will save your marketing cost.”

KKR lost Byjus as principal sponsor and had to accept the replacement, gaming company Mobile Premier League, paying less. “KKR is able to rope in a lot of sponsors which are endorsed by their co-owner Shah Rukh Khan, Byjus being one of them. But with their competitors Unacademy coming in as IPL associate partners, they would have their name on the mat, mentioned by commentators. It’s understandable of Byjus to move out, not wanting to play second-fiddle,” said the source connected to franchise sponsorship deals.

Industry watchers though believe the drop in valuations are temporary. Franchises that suffered losses in the initial years too are willing to take a long-term view. “Undoubtedly, in the last few years we have seen a huge increase in central revenues and that certainly helps us, with the losses we have gone through in the initial years,” said Burman.

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