IPL 2020: Five factors that will adversely affect title sponsorship rights’ value

The Board of Control for Cricket in India has initiated the tender process for the Indian Premier League 2020 title sponsorship.

The amicable understanding with Vivo to pause the five-year ₹ 440-crore per annum contract for this season is going to cost the BCCI more than 50% of IPL’s most lucrative deal.

IPL CEO Hemang Amin has been in touch with brand various brands before launching the invitation to the expression of interest. Brands like Dream11, Byju’s, Unacademy, Amazon are tipped to join the bidding war. Still, there remains little hope of a favourable deal for the board.

Baba Ramdev’s Patanjali has also expressed interest to integrate the brand identity with the IPL logo.

Reliance Jio was the first name to be speculated as to the prospective bidder. But a top company official has assessed the deal to be worth around ₹ 150 crores, terming the Vivo offer as highly overpriced.

That assessment might just be a bit too unrealistic considering the IPL brand value. Still, there are various factors to weigh down the value of the IPL 2020 title contract.

COVID-19 economic impact is common market sentiment. SportzFront is listing five IPL-specific reasons which warrant a hard bargain and downward valuation of the property.

DURATION OF CONTRACT

The winning bidder will get the status of the IPL title sponsor only for a little over four months – effectively only for the 33% time period of a standard deal. In such a scenario the value for the non-league period will certainly have a reverse calculation.

LESSER DELIVERABLES

League games in the offshore venue in empty stadiums will deprive the sponsor of various activation and other associated rights – like the Vivo IPL fan box, other hospitality and ticket offerings, and brand representative’s presence in the post-match prize celebrations.

LEAGUE NOT IN INDIA

The league at an offshore venue would mean that the brand will also not be able to activate other on-ground marketing initiatives and client offerings to derive the best possible values from the investment.

NEXT IPL IN FOUR MONTHS

The next editions of the league, expected to be in India, will be only three and a half months away from the IPL 2020 final.

The brands in such a scenario will be conservative in opening their coffers, considering a lesser investment in the next quarter can ensure better ROIs in ab expected better market scenario.

DEAL ONLY FOR ONE SEASON

BCCI has reportedly approached the Tata Group. But one of India’s leading and most respectable brands is not keen on such a short-term deal.

Vivo’s sponsorship deal paused for this season has been extended by one year till 2023. Thus, the BCCI is not in a position to make a long-term offering. A stop-gap offering will never be able to match the price-term of a long-term strategic partnership.

“The IPL deals will be affected on all grounds. This IPL edition is actually a sanitised virtual edition as opposed to the very dynamic physical league everyone is used to,” says brand expert Harish Bijoor, founder of Harish Bijoor Consults Inc.

The BCCI will be announcing the IPL 2020 title sponsor on August 18. Market sentiment, influence by the prevailing economic scenario and other allied factors, suggests that even a deal at 50% of Vivo’s contract value will be a “favourable bargain” for the BCCI.

Admin Sportz Front

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