The Indian Premier League 2020 is in for a ₹ 440 crore setback. The IPL title sponsor VIVO has optged out of the deal, at least for this year.
Two days after the IPL Governing Council had decided to go ahead with the Chinese sponsors, including the title sponsor VIVO, it is learned that the BBK Electronics-owned smartphone brand will skip the five-year contract at least for the upcoming season in the UAE.
SportzFront has reliably learned that the BCCI and the IPL title sponsor have reached consensus to “suspend” the deal for this season. “Vivo considering the bleak market scenario and on the ground that it will not get the right value for the deal since the league was not happening in India, had asked the BCCI to renegotiate the contract for this year,” a source confirmed to SportzFront.
“The IPL title sponsor wanted around 40% deduction in the ₹ 440 contractual obligations. It is said to have been agreed that this season will be treated as a ‘zero year’ in the deal. The five-year contract will be extended by a year. Thus the deal that was to end in 2020 will continue till 2023.”
The development will, however. land the Board of Control for Cricket in India in deep trouble. With nearly a month and a half to go for the league, it will be just impossible to find a brand that could come closer to the Vivo deal.
VIVO had retained the IPL title sponsorship in a jaw-dropping ₹ 440 crore deal in 2019. It was over 400% per annum of the value of the smartphone brand’s previous contract and more than 300% higher than the next best bid made by the company’s sister concern Oppo.
In the market hit hard by to slowdown in wake of the COVID-19 pandemic, the BCCI will find it hard to find a replacement at a considerable value. It will now have to rush with the tender process.
According to media reports, the board will float an invitation to invite tender in the next three days.
National daily Times of India has reported that a prominent IPL franchisee has informed the other team owners that the Vivo India is poised to exit the IPL 2020 sponsorship, at least for this year.
The weak market scenario due to COVID-19 pandemic and dropping sales due to anti-China sentiments, coupled with the league being moved to the UAE, had led to the disinterest of the brand. Vivo as part of the deal garners best-on-ground activation through its VIVO IPL boxes during the matches.
Since the league will be played at an offshore venue with no crowds at least in the initial phase, the brand had already lost its best activation opportunity around the IPL.
There is also growing concern around the Government of India rolling out stringent economic measures against the Chinese products and brands. A number of Chinese mobile applications and the import of television sets have already banned. More economic restrictions are feared in time to come.