While leading franchises have seen a 10-15% decline, for the rest sponsorship amount has dropped by 25-30%
Even as the Board of Control for Cricket in India (BCCI) is all set to host the much-awaited T20 tourney – the Indian Premier League (IPL) in Dubai this year, the eight franchises put together are expected to post a 30-40% decline in sponsorship revenue. This year the eight franchises in total are expected to earn anywhere between Rs 300-350 crore, compared to Rs 500 crore last year. “The spread of Covid-19 is definitely the first reason, followed by shifting of venue to the United Arab Emirates (UAE). Additionally, with matches being held in empty stadiums, franchises will have to forgo the revenue earned from on-ground activation as well from the sale of tickets,” said a senior sports analysts on condition of anonymity.
When contacted franchises such as Chennai Super Kings, Delhi Capitals, among others remained unavailable for comment.
Typically three-four key franchises including Mumbai Indians (MI), Chennai Super Kings (CSK), Knight Riders (KKR), Royal Challengers Bangalore earn between Rs 70 -80 crore from sponsorship, while the remaining four franchises earning ranges between Rs 30-40 crore. According to industry estimates, while the cost of sponsoring the front of the jersey of teams such as MI, CSK is between Rs 18-20 crore, in case of other teams such as Delhi Capitals (DC), Kings XI Punjab (KIP), Rajasthan Royals (RR) the price ranges between Rs 12- 15 crore. Similarly, the leading franchises charge anywhere between Rs 12-15 crore for a sponsorship slot at the back of the jersey. The cost reduces to Rs 7- 8 crore for another set of franchises. Even as franchises were able to close most of the deals before lockdown, a lot of the inventory which includes space at the back of the helmet, non-leading arm remains unsold. “Anything is better than a gap year and in this case, BCCI would have to step in to absorb certain cost,” Ajit Ravindran, co-founder and MD, Meraki Sports and Entertainment, said. Interestingly enough, franchises which are looking to close last-minute deals have reduced the rates as much as by 50%. The cost of sponsoring a leading arm on a jersey currently ranges between Rs 1-2 crore, compared to earlier price of Rs 3-2 crore in case of leading teams, and Rs 70-80 lakh as compared to Rs 1-2 crore in case of other teams.
The other issue remains that as the T20 matches will be played in empty stadiums – franchises will have to forgo the money earned from on-ground activations– which typically amounts another Rs 15-20 crore. This is irrespective of the fact that the deal may include a digital conversation between fans and brands through zoom calls. According to Harish Bijoor, brand strategy specialist and founder, Harish Bijoor Consults Inc, even as franchises try to slip in deals of such nature, advertisers will not buy the same.
The other large chunk of the revenue which franchises are expected to let go off its earning from the sale of tickets which is about Rs 400 crore. While in the past the BCCI had compensated franchises whenever the T20 tournament was shifted out of India to countries such as South Africa and UAE – the current situation is a tad different. With Vivo exiting as the lead sponsor at Rs 440 crore per year, the central pool revenue is expected by Rs 200 crore. For Ravindran, it is here that a few of the franchises are trying to club a two-year deal. IPL is expected to be held during its regular season that is between April and May, next year – which shorten the period by six months.