IPL's Chinese title sponsor pulls out

The finances of next month's Indian Premier League (IPL) have been disrupted as title sponsor Vivo has agreed with the Board of Control for Cricket in India (BCCI) to take a pass on this year's Twenty20 cricket tournament in view of the anti-China sentiment in the country.

The decision comes soon after the BCCI insisted that it was retaining all its sponsors. Now, the departure of Chinese phone brand Vivo leaves it with a financial headache.

As well as the loss of Vivo's annual Rs440 ($80 million) contribution, there are no gate receipts from the television-only event taking place in the United Arab Emirates from Sept 19 to Nov 10.

Broadcast partner Star India will also take a big hit if Vivo decides to stay off-air during the event - as much as Rs250 crore in one estimation.

That figure could rise significantly if other Chinese phone brands, including Oppo, RealMe and Xiaomi, choose not to advertise.

According to Mr Sandeep Goyal of the Mogae Media agency, Chinese brands' ad spending contributes about 25 per cent of the total IPL revenues.

Some Indian brands could be pulled into the row as well.

Mr Karan Taurani, vice-president, Elara Capital, told MoneyControl that companies such as "Paytm, Dream 11, Swiggy and Zomato, all having Chinese relationships (investments), could decide to play it low-key".

While the search is on for a replacement sponsor, there's no expectation that the BCCI will bring in the same amount as Vivo was paying.

With just 45 days before the event starts, BCCI sources indicated to the Times of India a hope that half of the value of the Vivo deal "can be recovered through either a new title sponsor or by way of bringing in multiple (three to four) official title partners".

However, according to livemint.com, several companies, including Byju's and Coca-Cola, are keen to sponsor India's most-watched sports tournament.

Online education start-up Byju's, which is also the Indian cricket team's sponsor, is already in talks with the BCCI to become the title sponsor.

The start-up, which recently secured funding worth US$500 million from multiple investors, has reportedly set aside Rs300 crore for IPL sponsorship.

Byju's replaced Nokia as IPL team Kolkata Knight Riders' (KKR) main sponsor in March. Actor Shah Rukh Khan, co-owner of KKR, is Byju's brand ambassador.

Coca-Cola India is also evaluating its plans to sponsor the IPL. "We continue to stay invested in cricket and (are) observing how the situation evolves. We are awaiting more details before taking a decision," the company told livemint.com.

"IPL is a terrific property for brands to break out from the gloom of the pandemic," said Mr Harish Bijoor, brand strategy specialist and founder, Harish Bijoor Consults. "Many have already set aside money to park on IPL as a vehicle.

"Post Covid-19, this would be the first celebratory property in terms of sports content as Indians eagerly await to see their favourite sports stars in action."

The IPL, which is coinciding with the festive season, may also attract e-commerce platforms.

"With deep pockets, e-commerce firms such as Amazon are likely to be in the running to clinch the title sponsorship. It would be an opportune time for online firms to be visible and advertise as they also make a splash for flagship sales in October," said a senior media buyer.

Mr Ashish Bhasin, chairman, India, at Dentsu Aegis Network, said online retailers which have not been severely impacted by the pandemic and have the need to advertise may end up bidding for the title sponsorship.

"They could be firms such as Jio, Amazon or digital wallet players like PhonePe," he said.

Indo-Asian News Service

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