top of page

IPL and Brands

By Jaskuwar Singh and Satpal Singh


 

The cricketing season is back with much enthusiasm among the players. The tournament was originally scheduled to commence on 29 March 2020 but was suspended until 15 April due to the global coronavirus pandemic. After Indian Prime Minister, Narendra Modi, announced on 14 April that the lockdown in India would last until at least 3 May 2020, the BCCI suspended the tournament indefinitely. On 10 August 2020, the Indian government gave its permission for the tournament to take place in UAE.


After the change of venue another major problem arises for the BCCI administration, this time it was relating to the title sponsor. Since IPL is an international cricketing event, it gathers a lot of viewership which provides companies that invest in it the opportunity to reach the masses efficiently with an unparalleled marketing and promotion potential. Brand IPL is a beast. It has seen a growth rate of almost 1000% in a course of almost 10 years. What started out as a Rs 40 crore deal per year for the first five years (2008-2013) by realtor DLF became a Rs400 crore deal by 2018 when the Chinese mobile company, VIVO made a sizeable investment. VIVO, after having paid ₹100 crore p.a. for 2016 and 2017 found the opportunity profitable enough to make an annual commitment of ₹439.8 crore for the next five seasons.




As opposed to DLF and VIVO, PepsiCo has opted out of its ₹ 79 crores and got out of a five-year deal after only three seasons. The investment that has earned ₹616 crore in the first ten years, left the marketers awe-struck as it garnered a value of ₹2,199 crore for the next five years.


While PepsiCo chose to disinvest, VIVO has been forced out of their 5-year contract for this year only, though it will continue with the contract from 2021, because of the tense Indo- Chinese relations at the time and popular boycott of Chinese products in the nation. BCCI conducted an auction for title sponsor of IPL 2020 after VIVO pulled out on 4th August. Big Companies like Tata, Patanjali, BYJUS, and Dream 11 were interested in buying the title sponsorship.


On 18th August BCCI released on official statement naming Fantasy cricket league platform Dream11 as the title sponsors with the bid of ₹222 crore for IPL 2020. A loss of almost 50 percent. That's what Dream 11's IPL title sponsorship deal means to the BCCI. Instead of Rs 440 crore for a year from Vivo, the tournament will receive Rs 222 crore from the fantasy gaming company for the 2020 edition. Even the franchises have to face loss due to this deal. Each franchise will get around Rs 13.87 crore, another 50 percent drop from the Rs 27.5 crore they used to get from the Vivo deal. Even though revenue getting reduced by half sounds bad, the BCCI and franchises are not too disturbed, given that the arrangement is for this year only.

There always has been a great competition between companies to be the title sponsor. But there is always a chance for them to be the associate partner. The IPL season of 2017 was pathbreaking in terms of total partnerships. The Indian sports’ most precious commercial property got 12 commercial partners, including three brands in the premium Presenting Partner category, onboard for the tenth season. The other eight were in associate categories. This year BCCI has roped in two more associate partners for the IPL, namely Unacademy and Cred. Tata Altroz and Ceat Tyres remain the other associate sponsors while the Future Group has exited from the list of associate partners.

This year IPL is a tale of never-ending troubles. After coping up with the sponsors, several franchises are upset with BCCI and has asked the administration to put IPL 2020 on hold. This is due to a huge loss and several other additional expenses that the IPL franchise has to incur.

Franchises are almost sure to lose Gate Revenues from the IPL 2020 as no fans are likely to be allowed for the event. Each franchise collects in a range of 22-28 Cr from the Gate Revenues, but that will completely get wiped out. Due to the falling economy and uncertainty around IPL 2020, franchises will lose a minimum of 15-20% of the total values of team sponsorships.


Brands have a very crucial role to play in the operations and success of IPL. The more the brands invest in IPL, the more is the valuation of IPL as a brand. IPL as a brand has seen a great rise in its value since the time it first started. It reached $3.2 billion in 2014 and doubled in the next 5 years to $6.8 billion in 2019. But this year due to the coronavirus pandemic, IPL is expected to lose over $ 1 billion from its brand valuation. Not just IPL, all the teams are a brand in themselves. After the completion of the 2019 season, Mumbai Indians soared at the top of the brand leaderboard with a valuation of Rs809 crores, continuing to be at the top for consecutive four years. CSK saw a massive percentage increase in its brand valuation in 2019. However, the brand value eroded because of the two-year ban on the team. This year with M.S. Dhoni and Suresh Raina retiring, CSK’s brand value is bound to dampen though the extent remains to be seen.

But well, IPL ultimately is about the love for the sport. Ardent cricket fans are as excited as ever because, despite everything, it is happening! It is finally time to sit back on your couches wearing the jersey of your favorite team, gather your friends around (preferably virtually!), grab a bucket of popcorn and enjoy the matches from the comfort of your home.

0 comments

Recent Posts

See All

Yocket

Comments


bottom of page