IPL and VIVO : The twisted tale of a Title Sponsorship

Guest Column: Anirudh Kalia, Consultant, Angel Investor & Board Advisor, shares his views about the brands that will ultimately come to save BCCI's pride after VIVO's exit

e4m by Anirudh Kalia
Updated: Aug 11, 2020 12:00 PM
IPL

There are ‘Chinese’ whispers abound on VIVO’s IPL Title sponsorship suspension and the scampering underway to find a replacement for the upcoming IPL season starting on Sep19th in UAE. Till news this Monday morning (10th Aug), BCCI is said to be inviting bids for the vacated title of 2020. While the events unfold at a frenetic pace, I am sticking my head out by saying, "It is difficult even at Rs 170 cr (USD 22mn)."

Here’s the 'Why' of ‘Title Sponsorships’ in Sports

Title Sponsorship in Sport is an "Associative" proposition by its very nature. A brand opts for a "Title" of a Sports League to leverage the immense social capital that the sport enjoys among its fans. The expectation is to gain the rub off from positive brand attributes of the League onto its own brand and almost certainly, to recruit new audiences or conquer new markets. It is not a short-term campaign led investment but a long term asset creation with the aim of developing a fond association in the minds of people for years to come.

What comes to your mind when you hear the word ‘Prudential’? For many of you, it will be the 3 Cricket World Cups (1975 to 1983). ‘Title’ sponsorships are large brand investments that are: (i) Long Term(ii) Associative and (iii) Across Mediums.

In the ‘Elaboration-Likelihood’persuasion model propounded by Richard Petty and John Cacioppo, the consumer psychology scientists proved that human beings are constantly bombarded with brand messages but do not have the cognitive capacity to recall, think about or evaluate each message received. The model posits that the only factor that motivates a consumer to decode, perceive or evaluate a message is his interest or involvement in the subject matter. The likelihood of elaboration in mind is dependent on ‘relevance’ and a person’s ‘involvement’. And ‘Live’ Sports content is ranked by them as having the highest ‘relevance’ and ‘involvement’ amongst the various stimuli that act upon people. ‘Title’ sponsorship sits at the top of this ‘relevance/involvement’ hierarchy in sports.

The one year contract period

Selling a one-year association for a long-term property is an issue for the prospective ‘Title’ partners. Which well-meaning CMO will sink in Rs 150+ crore on a property that gives his brand only a six-month runway and a 55-day impact? Especially when the original ‘Title Partner’ may be back in March 2021.

A key demand from brands will surely be a longer contract period than just one season, notwithstanding a ‘patriotic’ cheque by ‘the Baba who bends it like the Beckham’.

Internationally, Barclays spent huge on the English Premier League as the ‘Title’ sponsor

The British financial services brand Barclays spent an estimated Rs 1170 cr per annum or (USD 180 mn/annum) as the Title Sponsor of The Premier League from 2013-14 for three seasons. The relationship helped Barclays become a globally acclaimed financial services brand from Hanoi to Honduras. While the ‘Title’ sponsorship of Barclays ended with the 15-16 season, the brand continues its partnership till 21/22 season albeit with a reduced scope as the league’s ‘Financial Services’ partner. 

The Premier League football and the ‘Title Sponsorship’

According to Nielsen, the ‘Live’ content of the Premier League football is watched by 1.35 billion people across 188 of the 193 countries recognised by the UN. 

As the league became a global sporting phenomenon, the cost of overseas media rights grew consistently - now 35% up from USD 4.05 Bn to USD 5.49 Bn for the 2019-22 cycle for its full 380 match season. While the League dropped Title Sponsorship from 2016-17 to opt for a ‘clean brand’ like NBA, NFL and MLS, the commercial reason was to give more freedom to its Broadcast partners around the world to sell sponsorship individually and help these media houses maximise the revenues.

In fact, fewer globally acclaimed sports leagues now have Title partners. The more globally well-known and distributed a sporting league becomes, the more chances that you will not see a ‘Title Sponsor’. It also points out the increasing clout of broadcasters in proportion to their increasing costs of acquiring such rights.

So finally, what options does BCCI have?

This situation is not a normal turn out of events and unusual times call for unusual measures. Back in early 2014, BCCI had awarded the official ‘Team Sponsorship’ rights of the Indian Cricket Team to Star India. Star, at that time, already had the Broadcast, Mobile and Internet rights for India Cricket since July 2012 for a period of 6 years. During this transition, BCCI had slashed the ‘Team Sponsorship’ fee by 55% from Rs 3.34 cr (USD 547,000) per match, that Sahara was paying, to Rs 1.50 cr (USD 245,000).

This has happened again as the bid document inviting EOIs issued does not mention a Base price while figures of Rs 150-170 cr (USD 20-22 mn) are being spoken about in the media as likely valuation for the same. However, a ‘Title’ devoid of the Hospitality, Meet & Greets, Player Access will make little sense. Add to it the 1 season window and you see the challenge.

Keeping all in perspective, the current proposition may make sense to a present BCCI Partner brand willing to upgrade its association or to an App that wants to have millions of users/app downloads over the next 2-3months. IPL is the fastest an app can get to millions of downloads.

I put my money on an Indian brand like the Tatas, or a leading private bank, or a Consumer app, or a large PSU that may come in and rescue BCCI’s pride in these trying times. And if none of the above works, the BCCI always has the ‘Baba like the Beckham’ to go back to.

Disclaimer: The views expressed here are solely those of the author and do not in any way represent the views of exchange4media.com.

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