Irrespective of when Covid-19 is overcome or dealt with, the world will not be the same place. A handful of scenarios and bound to change and the economics of sports is one of them.
With the glamour, glitz and all that the IPL represents, it’s periphery has been dealt a significant blow with the departure of Chinese mobile-maker as the title sponsor of the Indian Premier League (IPL) this year.
With the expectations sky-high, the much-anticipated spectacle will be held in empty stadiums in the UAE, and amidst the void created by Vivo’s pullout considering the heightened anti-China sentiments, the BCCI faces a tough task on replacing Vivo with an eye on financial viability.
As things stand, Vivo which replaced Pepsi as the title sponsor in 2016, had a five-season deal with the BCCI worth Rs 440 crores. So the Indian board has to mindful of the high sums they are trying to recuperate. Considering the circumstances with which Vivo dropped out, the narrative demands a ‘Made in India’ brand, but for the BCCI organisers, any bidder who can make up for the loss of revenue would be good enough.
BCCI banks on IPL
There’s no doubt that the BCCI calls shots in the global cricket sphere with its financial muscle. One of the crucial for the financial strength is the cash0rich IPL-which not only attracts the worlds best talents to participate with obvious sporting as well as financial pull.
In addition, the various partners too see the IPL as a great platform to advertise given the global eyeballs the league attracts. Considering everything, the IPL is still an eloquent magnet for the marketeers and interest has been high amongst the big players to take place of Vivo.
On the brighter side, the response to the Expression of Interest (EoI) has been quite affirmative. Bids are flowing in and after much deliberation, the new title sponsors are to be named on Tuesday.
According to global consultancy firm Duff and Phelps, the brand value of IPL stands at USD 6.8 billion at this moment. The BCCI would hope to stand its ground given the aftermath of the pandemic.
Going forward the BCCI does not expect to be affected by the pandemic in gross.
“I wouldn’t call it as a financial crisis,” BCCI President Sourav Ganguly said. “It’s just a little bit of a blip. And the only way you can do it is by being professionally strong over a period of time.
“Big things don’t come overnight. And big things don’t go away overnight. Your preparation for a long period of time gets (you) ready for losses, gets you ready for successes.
🚨 BCCI invites Expressions of Interest (“IEOI”) for IPL Title Sponsorship Rights for 2020.
— IndianPremierLeague (@IPL) August 10, 2020
BCCI’s TV rights
The BCCI gets eye-watering INR 3300 crore from Star TV per year for the IPL. In fact, Star has already made the initial payment to the BCCI as per a notification on bcci.tv. Apart from the title sponsor, the IPL has much other sponsorship deals-including fantasy sports platform Dream11, PayTm, CEAT etc. In total, the BCCI pockets handsome Rs 170 crore from these sponsors.
The wagers for the IPL match can be placed here.
Other than paying the salaries of the contracted players, a certain amount of the money goes in running the domestic cricket in India. It also smoothens the process to organise 2000 domestic matches in different formats every year. In addition, women’s cricket and sporting activities at the grass-root level are also conducted using this money that the BCCI earns.
Another bone of contention for the BCCI is that the Indian team’s kit sponsorship contract is due to expire in September with suitable replacement deliberated upon.
American giant Nike’s four-year deal with the BCCI is worth Rs 370 crore, which comes down to Rs 87 lakh per match. Given the number of renewals and new deals, the BCCI will need to get its finances spot on. It is a given that going forward the BCCI is certain to feel the heat. The debate can only be over the extent of the pandemic-caused hit it takes.
In the global franchise market, India entered the field late-but catching up at a brisk pace. For a sport dominated by the global south, the IPL bids are expected to have a cascading effect. Within minutes it will elevate cricket to the league of the world’s most-watched and valued sports.