SPONSORS WANT TO LEAVE IPL, AT LEAST ONE MOVES A COURT

EXCLUSIVE

By Qaiser Mohammad Ali in New Delhi

Downturn blues are impacting the normally recession proof Indian Premier League. Season five is staring at a sponsor pull out. A mirror image of the economic environment and, more importantly, the trough that Indian cricket finds itself in.

All this has left the IPL owner, the Board of Control for Cricket in India (BCCI), in a state of flux. The Board is fighting seemingly unending battles with a host of sponsors, some of whom either want to walk out of their deals or have successfully forced the BCCI to reduce their sponsorship money drastically.

Having saved its skin in the huge battle of attrition with the national team sponsor Sahara India, the BCCI is now grappling with sponsors of the lucrative Indian Premier League (IPL) to make them stay put.

The unresponsive economic climate has contributed to the hard times for the BCCI, the world’s richest cricket board worth Rs 2,530 crore, is facing.

Karbonn Mobiles, the official mobile phone partner of the IPL, has managed to get its sponsorship fee reduced while the deal with Maxx Moblink, the IPL strategic partner and playoffs partner, has gone sour and has now entered litigation after the BCCI declined the company’s request for termination of the deal.

“Recently, Karbonn requested the BCCI to reduce its sponsorship fee to Rs 28 crore from Rs 30.10 crore for 2011 as they were having some problems. They also asked for the sponsorship fee to be reduced for the 2012 edition too,” a top official BCCI.

“Karbonn, however, agreed to spend the differential amount of Rs10.17 crore in marketing and promotions for the 2012 IPL. The IPL governing council has okayed both requests,” he disclosed.

However, the issue with Maxx Moblink failed to be resolved amicably. “They said that since they are facing a financial crunch, they wanted to terminate the deal as they would not be able to dish out Rs 23.8 crore for 2012 IPL. But the IPL governing council shot down the request and now the issue has gone into litigation,” the official said.

IPL chief operation officer Sundar Raman confirmed told Mail Today: “Maxx Moblink said that they were not doing well and wanted to pull out of the sponsorship deal. How can they walk out of their contractual obligation? So, the matter is now in litigation.”

Market experts say it could be a case clash of interests for Karbonn Mobile and Maxx Moblink, who both make mobile handsets.

“There’s confusion with some of the IPL sponsors. Everyone wants uniqueness for money they put in. But they are not getting that. Some players are endorsing one product in their personal capacity and another for their IPL teams,” Latika Khaneja, director of Collage Sports Management, told Mail Today.

“There’s not much value in the IPL now. In the first year in 2008, it was IPL’s uniqueness, in the second, it was a big hit because the first edition was successful, and from the third edition onwards it has been business as usual. To borrow a market terminology, cricket sentiments are down, overall. Sponsorship is always event-related and sponsors decide on their targets six months in advance.”

Vikram Sakhuja, CEO of GroupM, a media buying agency, concurred with Khaneja. “It’s not as bad as last year, but there’s less money now because people are circumspect. Overall, it’s a little down,” Sakhuja told Mail Today.

The CEO of an IPL franchise too admitted that markets were not responding well to the IPL. He summed up thus: “There’s uncertainty; markets are down; there’s too much cricket; and the Indian team is also not performing well. All this has contributed to sponsors being less enthusiastic.”

Kings XI Punjab COO Arvinder Singh said that the Indian team’s continued poor performance has affected the sponsorship scene. “Overall, the national team’s results have had an effect on sponsorships. The Indian team is the core of any sponsor,” he said.

(THIS STORY FIRST APPEARED IN MAIL TODAY)