If celebrity tax payments are any indication, the slowdown is already upon corporate advertising and marketing. Bollywood actors like Shahrukh Khan (SRK), Amitabh Bachchan, Akshay Kumar, Salman Khan, cricketers like Sachin Tendulkar, Harbhajan Singh, MS Dhoni have paid up to 70% less advance tax for the nine-month period this fiscal, compared with payments in the same period a year ago. These celebrities earn a large part of their income from brand endorsements, paid appearances and promotional events.
During April-December 2010, actors Akshay Kumar and Shah Rukh Khan had paid of R20 crore each in advance taxes. This year, SRK paid only R10 crore and Akshay Kumar R11 crore, 50% and 45% less, respectively. Even master blaster Sachin Tendulkar?s advance tax for April-December FY12 is down to R4.5 crore compared with the R10 crore paid last year.
Superstar Amitabh Bachchan paid only R4 crore in advance tax so far this fiscal, compared with R13 crore he paid during the same period last year. MS Dhoni, the World Cup-winning captain is the only one to have maintained his advance tax payment this fiscal.
According to sources in celebrity management agencies, stars like Tendulkar, Dhoni, SRK and Akshay Kumar have not signed any endorsement deal since April. ?No new deals means no income in personal capacity for which they pay advance tax. Also, while SRK was most visible on television according to TAM Adex report, this was only because of his in-house promotion for Ra.One which began in March. So, he has not earned anything from new endorsements,? said the head of a leading celebrity management agency.
Dhoni is the face of 23 brands and charges over R6 crore per endorsement. Brands he endorses include Reebok, Aircel, Godrej and TVS Motor. Tendulkar endorses over a dozen, including Adidas, Audemars Piguet, Canon, ITC, Aviva Life Insurance, RBS and appliances major Toshiba among others, and charges about $1 million per year per deal. Shahrukh Khan endorses brands like Emami, Hyundai Motors and Dish TV, among others, charging R7-8 crore per year.
The story is the same among leading Bollywood actresses as well. While Kareena Kapoor paid R3.5 crore in advance tax, down from last year?s R4 crore, rival Priyanka Chopra saw a 50% dip ? R2.5 crore this fiscal compared to a little over R5 crore during April-December 2010.
Analysts tracking the FMCG sector say FMCG firms like Hindustan Unilever, Procter & Gamble, ITC and Dabur reduced advertising spends by around R500 crore in the first six months of current fiscal compared with the same period last year. ?Less spending on ad, marketing and promotions is quite evident from the financials of FMCG majors. This means they may also have spent less or nothing on hiring celebrities for endorsements,? says a market analyst.
HUL curtailed its advertising and promotions spends for the six month period (April-September FY12) by around 8.5% to R1,285 crore from R1,400 crore in same period last year. Dabur India cut its ad spends by 20% for the first six months of this fiscal ? From R207 crore in 2010 (HY11) to R165 crore (HY12).
