Paytm wins title sponsorship rights for Indian cricket for 4 years
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At a time when interest in cricket seems to be declining, e-commerce has come to the rescue of the Board of Control for Cricket in India (BCCI) with Paytm becoming the first e-commerce company to sign up for title sponsorship of the game.
On Thursday, mobile payments and e-commerce company One97 Communications Ltd, which operates under the Paytm brand, won the title sponsorship rights for all cricket matches, domestic and international, played in India under the aegis of BCCI for four years in a deal worth Rs.203.28 crore.
The deal covers 84 matches. Paytm will pay Rs.2.42 crore per match, higher than the minimum bid price of Rs.2 crore per match.
“One 97 Communications Ltd (Paytm) has acquired the sponsorship rights for BCCI international and domestic matches. The winning bid was at a price of Rs.203.28 crore to be paid over four years. The bid was opened in the meeting of the BCCI marketing committee held earlier today,” BCCI said in a statement.
The 20% increase should please BCCI. Neither the board nor analysts had huge expectations before the bids were opened. However, e-commerce seems to have come to the rescue.
India will host South Africa later this year. The series, which will kickstart the international season, will also mark the beginning of Paytm’s association with Indian cricket.
“With nearly 84 matches scheduled over the next 4 years with all major countries playing in India, we are hopeful that Paytm will be able to build a strong and strategic association with cricket. We are also happy that the realization has increased by 20%. It augurs well for Indian cricket. I am thankful to Paytm for their interest and faith in Indian cricket and welcome them on board,” said Anurag Thakur, secretary, BCCI.
Maxus, a media buying agency and part of GroupM, concluded the deal for Paytm.
“We are very happy to partner with BCCI and cheer for Indian cricket with millions of fans,” Vijay Shekhar Sharma, founder and chief executive of Paytm, said. “Over the next four years, we will continue to invest strongly in cricket and other sports. As a growing brand which has big plans for a billion strong Indians, there is no better platform than cricket in India.”
Experts say that given the current sentiment around cricket, particularly the Indian Premier League (IPL) that has been surrounded by controversy, and the poor performances of the Indian cricket team in recent times, the BCCI has got a good deal.
“Though these are good numbers, BCCI has not shocked anyone with the deal. The Indian team’s performance will determine whether the deal will be profitable for Paytm or not. In the short term, for one or two years these numbers seem like an expensive proposition for the company,” said Indranil Das Blah, chief operating officer at Kwan Entertainment and Marketing Solutions, a sports marketing company.
Paytm is planning to spend in excess of Rs.500 crore on cricket and other sports such as football, hockey and kabbadi over the next four years, said Shankar Nath, senior vice-president, Paytm. Cricket will get the lion’s share.
“Currently, there is a lot of competition between the 400 e-commerce companies that are advertising. Whoever establishes themselves early in the game and wins market share will win in the long run,” said Nandini Dias, CEO at the media buying agency Lodestar Universal. “All are trying to get ahead through acquisition strategy. Acquisition by giving huge discounts or by spending huge money for branding.”
The board’s deal with Micromax Informatics Ltd, a mobile phone maker, ended in April. Micromax paid just over Rs.2 crore per match last season for the period between October 2014 and April 2015.
Prior to that, Star India Pvt. Ltd acquired the title sponsorship rights of international and domestic cricket matches played in India till 30 April 2014 at a base price of Rs.2 crore a match.
In 2010, India’s largest telecom company, Bharti Airtel Ltd, agreed to pay Rs.3.33 crore per match, substantially higher than the Rs.2 crore minimum amount set by the board, putting the total value of the deal at about Rs.165 crore for 50 matches over a three-year period.