VIVO—the title sponsor for the Indian Premier League—is yet to announce it officially, but the Chinese technology company is all set to pull out of the tournament. The BCCI, too, has not made it public, but the IPL 2020, which is set to take place after a delay of six months, in the United Arab Emirates from September 19, is definitely going to see a change in its title sponsorship.
But, is it the increasing anti-China sentiment that has made VIVO pull out or were there bigger economic concerns? As news of the company's impending exit emerged, the IPL Governing Council members were left-red-faced, as the matter was discussed at the meeting on Sunday. Even the post-meeting press release, signed by BCCI secretary Jay Shah, termed it as 'VIVO IPL 2020'. THE WEEK has learnt that BCCI officials were not keen on making it public. Two days later, however, it has, leaving them upset. Reportedly, a leading IPL franchise informed the other franchises of VIVO's impending exit.
It is true that the growing anti-China sentiment has been a matter of concern but the BCCI maintained that it will continue to stick with its "Chinese" commercial partners despite criticism from public and political corners. But, there is, reportedly, more to VIVO's decision than public opinion. Sources in the know say that VIVO has been looking to exit from the BCCI deal for some time now. It won the title sponsorship bid in 2017, bidding a whopping Rs 2,199 crores for 2018-2022 cycle, which is approximately Rs 440 crore per year.
The next best bid was by Oppo, its Chinese rival,which bid Rs 1,430 crore—Rs 769 crore less than VIVO's bid. "Just look at the difference. Rs 440 crore was never a feasibile amount for any company for title sponsorship,” a top IPL official said. “They had come in when Pepsi withdrew for two years and were ready to pay 554 per cent more than the previous deal.”
VIVO's withdrawal has made it easy for both sides, the officials believe, as an Indian title sponsor for the IPL would relieve the BCCI of the pressure.
Given the economic impact of the lockdown due to the COVID-19 pandemic, there is a concern that the BCCI will not get the same value from a new sponsor. "Yes, it will be realistic sponsorship deal and is most likely to be at lower values, given the slowdown in the economy," said a top IPL official.
Franchises get a major chunk or almost all of the profit from the share of revenues from the IPL's central revenues, which include title sponsorships and broadcast deals. Seasoned cricket administrators brushed aside concerns of franchises getting hit due to the lack or lower title sponsorship deal this year. "All franchises make at least around Rs 150-crore profit annually from the IPL, after payments to players and officials. So, even if they get Rs 10 crore less, it should not be an economic crisis for them. If they say so, then they are just overreacting," said a senior cricket administrator.
Franchises are not willing to make a public statement over the sponsorship blow yet. They await communication from the BCCI regarding the same. The Board is set to meet with them once the SOPs and guidelines for the season are finalised.