Home >Sports >cricket news >Vivo’s IPL sponsorship in peril amid border row

The border brawl with China that left 20 Indian soldiers dead has cast a cloud over Indian cricket, with the Indian Premier League (IPL) governing council reviewing Chinese mobile handset maker Vivo’s IPL title sponsorship worth 1,320 crore over the next three years.

As nationalist sentiments soar in India, on-air advertising worth 500 crore by multiple Chinese brands could also face the heat.

Under a five-year title sponsorship that began in 2018, Vivo has been paying 440 crore annually to the Board of Control for Cricket in India (BCCI). Separately, it also spends heavily on television advertising and dealer engagements and offers, estimated to be around 150 crore during the two-month event. The tournament, which is held in April-May every year, has been postponed this year due to the coronavirus outbreak, and is expected to be held in October-November.

Besides Vivo, a bunch of Chinese smartphone brands also invest heavily in the tournament, which was watched by an estimated 462 million people last year. Phone makers such as Oppo, Xiaomi, Realme and OnePlus take up premium ad slots during IPL, spending more than 500 crore on advertising throughout the tournament, according to media buyers’ estimates.

“Smartphone brands from China spend about 1,200 crore a year on IPL and other cricket tournaments. In total, Chinese exposure to cricket alone is over 2,000 crore at the very minimum every year, including sponsorship and advertising spends, which is quite substantial," said Sandeep Goyal, chairman of Mogae Media, a Mumbai-based marketing and communication agency.

In fact, the Chinese brands’ strategy is centred around leveraging big Bollywood and sports celebrities, bagging title sponsorship for sports properties for peak visibility and concentrating advertising bucks on cricket, which has been their winning formula, said Goyal.

Last year, online learning platform Byju, backed by Tencent Holdings of China, replaced Oppo as the official sponsor of the Indian cricket team.

According to the deal, Byju pays 4.61 crore per bilateral match and 1.56 crore per ICC match. Media buyers’ estimate of the spend is about 300 crore a year, depending on the cricket calendar.

Experts said banning Chinese brands would lead to significant loss of revenue for both BCCI and the official broadcaster, Star India, which earned more than 2,000 crore from IPL 2019.

However, annulling sponsorship contracts solely on the basis of the ongoing anti-China sentiment seems unlikely since it involves a legal process, said a senior sports marketing executive on condition of anonymity.

“BCCI will have to actively negotiate with the brands. Secondly, the board will also have to get a like-to-like replacement, possibly an Indian firm, which will take over the sponsorship deal. However, the market is in such a bad shape that it will be a challenge to get a company which is willing to pay a significant sum. Both Oppo and Vivo have committed to paying double the money that previous rights-holders have paid," the executive said.

The best solution would be to let the current noise die down and let the economy revive in the next few months and then relook at the deals, the executive said, adding BCCI will also have to be careful and give precedence to Indian companies during the bidding process in the future.

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