With an estimated Rs. 450 to Rs. 600 crore riding on the ICC World Cup, industry players involved are having a tough time. Further to media reports of advertisers’ plans to renegotiate their contracts, the Indian Broadcasting Foundation and the Advertising Agencies Association of India have called for players to honour their respective contracts.
A joint media statement signed by Naresh Chahal, Director-Finance, IBF, and Dara Acidwalla, Secretary-General, AAAI, was released on March 26. The statement clarifies the industry bodies’ position.
It stated: “All contracts are bilateral and should be governed by what the parties have agreed to in writing. In committing and agreeing to any media buying deal, clients and their agencies always face either an upside or downside as the event or property unfolds. This is not unique to a property like cricket. Specifically, had India done well, no advertiser would have been asked to pay extra for that. Cricket packages, when bought or sold, are not necessarily linked to the fortunes of the Indian team alone. All constituents/parties to the deal therefore cannot renegotiate deals on the basis of the performance of a particular team alone and are expected to honour their respective contracts.”
The communiqué also stated that the statement was with reference to recent media reports regarding advertisers looking at renegotiating deals in the light of India’s loss to Sri Lanka during the ongoing ICC World Cup 2007.