Title-Sponsorship Rights of IPL Six – An Over-Valued Deal?’

Arjun J Chaudhuri

Soft drink beverage company PEPSICO become the Title Sponsor of the sixth edition of Indian Premier League with a winning bid of Rs. 396.8 crores, which includes the four continuing seasons till IPL 2017. The beverage company outbid Bharti Airtel, a leading telecommunications company in India, with a global footprint, providing 2G, and 3G services to its consumers, and whose marketing department accurately assessed the commercial impact of tendering a winning bidding for the title sponsorship of BCCI’s principal sporting property, the Indian Premier League. Competitive bidding increases the market value for the Title Sponsorship, in the procurement process with other for-profit companies, which has included DLF, a real estate company, and former title sponsor of the IPL who paid Rs. 200 crores for 5 years rights. Bharti Airtel had offered Rs. 316 crores for the Title Sponsorship when they bid for this sporting property because of the Positive Visibility that this property creates before consumers that includes individuals, groups, businesses, and governments.

However, the collection of wiretap evidence, oral statements, and search and seizure of information procured from the wiretap, and oral statements of accused, and witnesses, about the unfair practice of spot fixing, unlicensed betting thorough the network of bookies, and cheating spectators of a fair sporting contest for gate receipt paid under charges of the Indian Penal Code, 1860, which includes, former, and current players, managers, and possibly administrators of the game, also formerly charged with allegations of conflict of commercial, and administrative interest, has created Negative Visibility for the IPL sporting property, and the intangible nature of this property, may very well result in the adverse fall in its Market Value, after PEPSICO threatened to pull out as title sponsors because of the Negative  Image  being associated with PEPSICO, and co-sponsors. 

This rise or fall in the Market Value of the Title Sponsorship, and/or other categories of sponsorship, may result when the next round of procurement process is initiated by BCCI, who are already reeling from the pull out of Pune Warriors, owned by Sahara India, because of the inability of the BCCI management to resolve the claims of the sponsor, which experts see, as justified, and a decision of the BCCI President who combines his role as an owner of an IPL Franchise, and Administrator of Cricket in India, son-in-law of whose is currently arrested for spot fixing.

The BCCI management had made it clear in its tender notice that the companies which intend to sell off the rights after winning the bid are ineligible to apply in the first place. Only corporate entities, whether in India or abroad, which are interested in placing a bid for themselves and/or their holding or subsidiary company, for the purpose of the advertisement and promotion of their own brands within their primary product or services categories were eligible to participate in this tender process and to submit bids. Therefore, PEPSICO may well continue their commercial associations with the IPL, which company in competition with Coca Cola, were the principal reasons why Cricket in India became a Business of Sport after Reliance Industries were the winning bidders for the 1987 World Cup that was played at home. 

Notwithstanding this continuation of sponsors in cricket, there will in the future be a greater role played by Audit, and Enforcement Agencies of the Federation, and the State, and Central Government, the Direct, and Indirect Tax Department of the Government of India, and the Competition Commission of India [CCI], monitored and regulated with information collected under due process of law, and Right to Information Act 2005, if the collective enthusiasm for Cricket is to be profitably sustained.