Vivo likely to exit as IPL’s ti­tle spon­sor amid In­dia-China row

Move most likely prompted by the anti-China sen­ti­ment in In­dia; BCCI plans to in­vite a new ti­tle spon­sor for just this year

Hindustan Times (Gurugram) - - Gurugram - Rasesh Man­dani & Ab­hishek Paul let­ters@hin­dus­tan­times.com ■

THE MOVE WOULD LEAVE IPL POORER BY ~440 CRORE, ALSO HIT­TING THE FI­NANCES OF THE TEAMS

MUM­BAI/NEWDELHI: Chi­nese smart­phone maker Vivo Com­mu­ni­ca­tion Tech­nol­ogy Co’s In­dian arm Vivo In­dia is set to with­draw as ti­tle spon­sors of the up­com­ing In­dian Pre­mier League, ac­cord­ing to peo­ple fa­mil­iar with the mat­ter at the Board of Con­trol for Cricket in In­dia (BCCI).

If it hap­pens, the move would leave IPL poorer by ~440 crore, also af­fect­ing the fi­nances of each of the teams. Vivo In­dia paid ~2,200 crore in 2017 for a five-year ti­tle spon­sor­ship deal with IPL.

Nei­ther BCCI nor Vivo In­dia want to break the con­tract, but given the cur­rent en­vi­ron­ment, be­lieve that this is the best thing to do — at least for this year.

Ac­cord­ing to the peo­ple cited in the first in­stance, BCCI top brass were locked in a tele­con­fer­ence through the day to find an am­i­ca­ble set­tle­ment with Vivo.

Be­hind the scenes, a BCCI of­fi­cial said, pres­i­dent Sourav Gan­guly and sec­re­tary Jay Shah were in talks with Vivo of­fi­cials, be­cause the Chi­nese com­pany wanted to with­draw to “rene­go­ti­ate the val­u­a­tion.”

BCCI plans to float a ten­der to in­vite a new ti­tle spon­sor for just this year, but it may not be as lu­cra­tive. An IPL fran­chise ex­ec­u­tive said he is con­cerned about the fi­nan­cial fall­out. “One of our de­mands has been to be com­pen­sated for the loss of gate re­ceipts,” he said. “Now, if the cen­tral pool will get af­fected due to Vivo opt­ing out, it will hit us hard.”

MUM­BAI/NEWDELHI: Chi­nese smart­phone maker Vivo Com­mu­ni­ca­tion Tech­nol­ogy Co’s In­dian arm Vivo In­dia is set to with­draw as ti­tle spon­sor of the up­com­ing In­dian Pre­mier League (IPL), ac­cord­ing to peo­ple fa­mil­iar with the mat­ter at the Board of Con­trol for Cricket in In­dia (BCCI).

If it hap­pens, the move would leave IPL poorer by ~440 crore, also af­fect­ing the fi­nances of each of the teams. Vivo In­dia paid ~2200 crore in 2017 for a five-year ti­tle spon­sor­ship deal with IPL. Nei­ther BCCI nor Vivo In­dia want to break the con­tract, but given the cur­rent en­vi­ron­ment, be­lieve that this is the best thing to do—at least for this year. BCCI will have its task cut out to find a spon­sor at a time when the econ­omy isn’t do­ing well, al­though the hunger for sport­ing events may in­crease tele­vi­sion view­er­ship of the pop­u­lar T20 league that will be played in UAE.

The move comes af­ter BCCI and the IPL Gov­ern­ing Coun­cil have both been crit­i­cised for re­tain­ing Vivo as the ti­tle spon­sor at a time when anti-China sen­ti­ment is run­ning high in In­dia. The gov­ern­ment has banned Chi­nese apps, placed strin­gent re­stric­tions on Chi­nese in­vest­ments, and is re­view­ing part­ner­ships In­dian ed­u­ca­tional in­sti­tu­tions have with Chi­nese in­sti­tu­tions. All of this comes in the back­drop of ten­sions be­tween the two coun­tries along the Line of Ac­tual Con­trol in Ladakh where a scrap be­tween the two armies re­sulted in the death of 20 In­dian sol­diers and an un­known num­ber of Chi­nese ones.

Ac­cord­ing to the peo­ple cited in the first in­stance, BCCI top brass were locked in a tele­con­fer­ence through the day to find an am­i­ca­ble set­tle­ment with Vivo.

BCCI plans to float a ten­der to in­vite a new ti­tle spon­sor for just this year, for the league that be­gins Septem­ber 19 in UAE.

“They could re­turn next year to com­plete the re­main­ing three­year deal, which would be ex­tended by a year to 2023, if In­dia-China re­la­tions im­prove,” a BCCI of­fi­cial said on con­di­tion of anonymity.

A Vivo spokesper­son said: “We nei­ther ac­cept nor deny the news. We will is­sue a state­ment once there is clar­ity on the si­t­u­a­tion.”

On June 19, IPL’s of­fi­cial han­dle tweeted, “Tak­ing note of the bor­der skir­mish that re­sulted in the mar­tyr­dom of our brave jawans, the IPL Gov­ern­ing Coun­cil has con­vened a meet­ing next week to re­view IPL’s var­i­ous spon­sor­ship deals.”

In the IPL gov­ern­ing coun­cil

meet­ing which was fi­nally held on Au­gust 2, mem­bers were told that there was no change in ti­tle spon­sors. Af­ter the meet­ing, the IPL’s new dates and move to the UAE were an­nounced, with Vivo’s name in the ti­tle.

The move re­sulted in out­rage. Be­hind the scenes, added the BCCI of­fi­cial, pres­i­dent Sourav Gan­guly and sec­re­tary Jay Shah

were in talks with Vivo of­fi­cials, be­cause the Chi­nese com­pany wanted to with­draw to “rene­go­ti­ate the val­u­a­tion.”

Chen­nai Su­per Kings CEO KS Viswanatha­n said that he has been “hear­ing ru­mours” but, “as far as the fi­nan­cial im­pact of Vivo’s exit is con­cerned, let BCCI de­clare it first and then we can de­lib­er­ate on it.”

An ex­ec­u­tive at an­other IPL fran­chise, who asked that nei­ther he nor his team be named, said he is con­cerned about the fi­nan­cial fall­out. “One of our de­mands has been to be com­pen­sated for the loss of gate re­ceipts,” he said. “Now, if the cen­tral pool will get af­fected due to Vivo opt­ing out, it will hit us hard. We hope to have a dia­logue with BCCI.”

Vivo’s deal as well as that of Star’s broad­cast rights con­tract for In­dian cricket, worth ~3270 crore a year, meant IPL’s rev­enue pool went up and the fran­chises be­gan mak­ing a profit up­ward of ~150 crore each sea­son. In­dus­try ex­perts said while BCCI will be able to find a spon­sor for IPL at such short no­tice, the deal may not be as lu­cra­tive. “BCCI won’t get a spon­sor to cover the ~440 crore Vivo would have paid,” said Lloyd Mathias, mar­ket­ing and busi­ness strate­gist and former Asia mar­ket­ing head of HP. “They will have to make do with a re­duced price, given the lim­ited time and also the fact that many brands have been se­verely im­pacted by the lock­down.”

What may work in the BCCI’s favour is that the IPL will be the only In­dian sport­ing tour­na­ment at a time when all sports is at a stand­still in the coun­try. “Viewer in­ter­est will be ex­tremely high,” Mathias said. “In com­par­i­son to pre­vi­ous years TRPs may be as good if not bet­ter. This may in­flu­ence po­ten­tial spon­sors de­ci­sion to bid for IPL at this late stage.”

Har­ish Bi­joor, brand strate­gist and founder of Har­ish Bi­joor Con­sults said Vivo’s exit, if true, is a smart move.

“VIVO cer­tainly re­alised that pop­u­lar sen­ti­ment is against its spon­sor­ship this year. There­fore it may have re­quested to move out this year and come back next year to com­plete the con­tract,” Bi­joor said. “This is a face-saver for BCCI and the IPL. Vivo has done the cor­rect thing at this point of time.”

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