IPL sponsors may get 1-year pro-rata extension

IPL sponsors may get 1-year pro-rata extension thumbnail

Synopsis

The issue is that title sponsor Vivo’s deal will now end in 2023, while the other official partners-Dream11, Unacademy, Cred, Upstox and Tata Motors-as well as umpire partner Paytm and strategic time-out partner CEAT will have their deals only till the 2022 edition of the league.

Agencies
In absence of Vivo, the BCCI conducted an auction for the title rights for IPL 2020, and Dream11 picked the rights for ₹222 crore, almost half of what Vivo would have paid.

The Board of Control for Cricket in India (BCCI) has come up with a solution for the sponsorship cycle problem of its money-spinning property, the Indian Premier League (

).

The issue is that title sponsor

‘s deal will now end in 2023, while the other official partners-Dream11, Unacademy, Cred, Upstox and Tata Motors-as well as umpire partner Paytm and strategic time-out partner

will have their deals only till the 2022 edition of the league.

A senior BCCI official said that the board cannot sign new associate sponsors before locking a title sponsor.

“The current title sponsorship is worth ₹440 crore per season, while associate partners pay around ₹40 crore each. We can’t block associate sponsors first, as those categories must be exclusive. Only after finalising a title sponsor, we can open the negotiations for the associates,” he said.

The solution, which is yet to be approved by the IPL governing council, is to offer a 1-year extension to the existing sponsors on a pro rata basis. “It’s not final yet, but mostly they will agree,” the official said. “While the BCCI has not offered extensions like this in the past, this is a different case.”

An email query sent to the BCCI did not elicit any response till press time.

Last year, the BCCI had to “pause” the five-year title sponsorship deal with the Chinese smartphone maker after a deadly clash between Indian and Chinese troops at the Galwan Valley resulted in a call to boycott Chinese products and companies across the country.

Vivo had originally acquired the IPL title rights for a five-year period until 2022. Under the deal, Vivo had agreed to pay the board ₹2,190 crore, or about Rs 440 crore per season.

BCCI

In absence of Vivo, the BCCI conducted an auction for the title rights for IPL 2020, and Dream11 picked the rights for ₹222 crore, almost half of what Vivo would have paid.

For Dream11, which was already paying ₹40 crore per year to the BCCI, it was an additional pay out of ₹182 crore for IPL 2020. However, the board lost ₹258 crore. Thus, the BCCI asked Vivo to continue its original five-year deal, by extending the title sponsorship agreement till 2023.

“If the BCCI allows extension on a pro rata basis, I don’t think any of these partners will have a problem in continuing,” said a sports marketing executive, who has facilitated deals with the BCCI in the past.

(Catch all the Business News, Breaking News Events and Latest News Updates on The Economic Times.)

Download The Economic Times News App to get Daily Market Updates & Live Business News.

ETPrime stories of the day

Leave a comment

Your email address will not be published. Required fields are marked *