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Videocon drops pitch as sponsors reel after cricket loss

Videocon drops pitch as sponsors reel after cricket loss
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First Published: Tue, Apr 03 2007. 05 16 PM IST
Updated: Tue, Apr 03 2007. 05 16 PM IST
By Ashok Bhattacharjee/Bloomberg
New elhi: India’s shock exit from the first round of the Cricket World Cup has left Sony Entertainment Television Pvt. Ltd with unsold airtime, sponsors nursing losses and players such as M.S. Dhoni ditched as endorsers.
Videocon Industries Ltd. replaced Dhoni, the team’s wicketkeeper, with Hindi movie star Shahrukh Khan to help market flatscreen televisions and other home appliances. The company has bought Rs15 crore ($3.4 million) of ad time with Sony for the later stages of the World Cup and spent Rs10 crore on sponsorship for the opening round. India, the 1983 champion, lost two of three matches and was eliminated on 25 March.
“What is the use of running cricketers in advertisements if people are not going to watch them?” Videocon chairman Venugopal Dhoot said in a telephone interview from Mumbai on 29 March. “We will use Dhoni when he gets back to form. People now are angry with cricketers.”
Aurangabad, Maharashtra-based Videocon and the Indian unit of LG Electronics Inc. are among companies saddled with ads associated with a tournament that Indians have lost interest in. Sponsors’ losses from the early exits of India and neighbouring Pakistan, the two biggest markets in the subcontinent, could total as much as Rs150 crore, according to WPP Group Plc’s MindShare media arm.
“Cricket has been hammered down to a re-rating and clients will be more cautious in associating their brands with cricket in the long term,” Gowthaman Ragothama, MindShare’s managing director in Mumbai, said in a phone interview today. “Cricket properties will witness a correction in their pricing because of these performances.”
‘Larger interest’
LG, which competes with Videocon in selling home appliances, said it would honor its current commitments.
“Cricket as a sport in itself holds a larger interest for all,” Girish V. Rao, the company’s vice president for sales and marketing in India, said in an e-mailed statement. “Avid cricket fans shall continue to follow the matches right up to the finals.”
Cricket is used in the $854 billion Indian economy, Asia’s fourth-biggest, to sell everything from insurance and cars to credit cards and sneakers. It accounts for more than 90 percent of sports sponsorship in India.
Companies including PepsiCo Inc. and Hero Honda Motors Ltd. focus their sponsorship of the sport’s ruling body — the International Cricket Council — on the Indian market. TV channels bombarded viewers during the first weeks of the World Cup with PepsiCo ads using Indian captain Rahul Dravid and teammates Yuvraj Singh and Zaheer Khan.
The Board of Control for Cricket in India, or BCCI, is the sport’s biggest revenue earner. It sold the global media rights to India’s domestic and international games to Nimbus Communications for $612 million, while Sahara Airlines Ltd paid Rs314 crore to have its name on the team uniforms. Other sponsors include Nike Inc.
India’s performance at the showpiece, described by the BCCI as “disgusting,” has raised pressure on Sony to cut advertising rates. The company paid $300 million to show the World Cup and other ICC tournaments in India as part of a seven- year deal, according to Agence France-Presse.
The broadcaster has unsold airtime, slots that are usually reserved in anticipation of higher TV audiences in the latter stages of the championship. The tournament has another four weeks to go and because the matches are in the Caribbean, they’re taking place late at night for the Indian market.
Sony is unwilling to offer advertisers lower rates.
“It is not that we control the fortunes of the Indian cricket team,” Rohit Gupta, executive vice-president at the broadcaster, said in a phone interview in New Delhi. “Even we are left with unsold inventory. Advertisements are written contracts and non-negotiable.”
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First Published: Tue, Apr 03 2007. 05 16 PM IST