IPL 2020, The Start-Ups’ Paradise
By Pushtii Parekh
Amidst the pandemic hit economy, as legacy corporates quit the sponsorship race for India’s cricket carnival, home-grown start-ups step in to fill this void!
Historically, cricket has been the paradigm platform for MNCs to connect with its consumers, owing to its humongous reach like no other. The indispensable deliverable to sponsors is the prompt and colossal visibility of the brand to the consumers. And thus, ever since the inception of the Indian Premier League in 2008, it’s often considered as the “sponsors’ paradise.”
This mega cricket carnival, is the most attended cricket league in the world; in 2010 was the first sporting event in the world to be broadcast live on YouTube and in 2014 ranked sixth by average attendance among all sports leagues. According to the BCCI, the 2015 IPL season contributed ₹11.5 billion (US$160 million) to the GDP of the Indian economy.
From DLF to Pepsi, Vivo to Dream11, various giants have poured in millions of dollars as sponsorship, either in the central league and/or in individual franchises, amounting to the IPL’s largest revenue stream.
According to the financial consultancy Duff and Phelps, the brand valuation of the IPL more than doubled from $3.2 billion in 2014, to $6.8 billion in 2019.
Thus, the IPL ecosystem is valued to be at a whopping ₹475 billion, with an appreciation of 13.5% in the last edition (2019) of the league.
Cricket amidst a Global Pandemic:
The global corona virus pandemic was a stumbling block to the world’s richest cricket board and it’s league in 2020. As such, the Board of Control for Cricket in India, moved IPL 2020 to the United Arab Emirates, only the second time since its establishment that the tournament was conducted outside India; the first being IPL 2014, wherein the tournament was held partly at the UAE, owing to the Indian general election.
What is astonishing about the current season of the IPL amidst the sluggish economy and global pandemic are the bidders for the recently-concluded IPL title sponsorship bids! None of the old economy giants from FMCG, BFSI and consumer durable sectors prospected association with the world’s most popular T20 league. Indeed, home-grown start-ups stepped in, to fill this void; thus making it the “start-ups’ paradise!”
The last time two mega corporates collided for the official Indian jersey rights was in 2010, when Sahara secured the rights by paying ₹3.34 crore over Airtel’s offer of ₹2.89 crore, per international match. Notably, India’s onset into cricket sponsorship came in 1987, when the Reliance Industries became the title sponsor of the World Cup, which was being held outside England for the first time.
2019 formed a landmark year when Byju’s replaced Oppo as the official sponsor of the Indian international jersey, thus pioneering the concept of sponsorships by home-grown start-ups over corporate entities.
IPL 2020, The Sponsorship Race:
For the IPL 2020, Dream11, Byju’s and Unacademy were the three entities which submitted bids. While Tata Sons, although enunciated an expression of interest, did not submit the bid, much to the umbrage of the board.
An article from Moneycontrol read, “Tata Sons and BCCI could not come to an agreement over the number of categories available for sponsorship. The fact that it was the only old-economy to confirm its interest in the rights shows the dwindling interest of the corporate houses and the emergence of start-ups and new-age companies in the cricket ecosystem.”
“It is not just Indian companies, even MNCs such as Pepsi, Samsung, Coca-Cola, Vodafone and Nike have been steadily showing declining interest. Whether it is value perception only or combined with an indifferent attitude of cricket administrators towards sponsors that is keeping them away, is tough to say,” Harish Thawani, founder of Nimbus Communications, told Moneycontrol.
Dream11 paid ₹222 crore for the IPL 2020 title sponsorship, almost half of the whopping ₹440 crore which the previous title sponsorship Vivo was paying, that was dropped owing to the rising geopolitical tensions amidst China and India.
After signing Dream11, BCCI roped in the ed-tech unicorn Unacademy as IPL’s ‘central sponsor’ for the next three seasons of the tournament by closing on a bid of an estimated ₹120-₹130 crore. While it brought on board the credit card bill payment app CRED as IPL’s ‘official partner’ for ₹40 crore, Paytm is the official ‘umpire’s partner’ for IPL. Infact, the ed-tech decacorn Byju’s is the ‘title sponsor’ of the Star Sports signature Pre-Post-Mid Innings IPL show Cricket LIVE.
Start-Ups & Individual Franchises
Notably, not just in the central league, but individual franchises have also garnered lucrative start-up sponsorships this year.
To name a few, Mobile Premier League, a gaming start-up became the ‘principal sponsor’ for Kolkata Knight Riders, with VR platform iB Cricket signing in as ‘official sponsor.’ The home-grown sanitary napkins brand Niine also partnered with Rajasthan Royals to amplify the awareness around the adoption of safe menstrual hygiene practices, as ‘principal sponsor.’ While Chennai Super Kings roped in EUME, an innovative luggage solutions start-up as ‘associate sponsor’, Mumbai Indians signed boAt, a consumer electronics start-up as ‘official sponsor’.
What do Start-Ups gain from such Associations?
It is this ‘sponsors’ paradise’ that provides momentum to these start-ups, as it is undoubtedly the single-largest property that delivers constant viewership and sustained buzz, which in turn increases the consumer base. The jerseys and various cricket equipment that the players use, are often cluttered with logos of its sponsors and partners, which in turn dispenses widespread visibility.
However, with so many brands and corporates joining the fray, strategic placement of a logo ensues brand remembrance and return on investment. Irvinder Kaur, managing partner at mConsult told Economic Times, “Among franchisee apparel properties, front chest of the jersey and back of the jersey are top two performing ones when it comes to brand recall and RoI.”
As such, these judicious positions are reserved for the ‘principal or title sponsors’, which constitute the highest bids. The next in the hierarchy is the ‘associate sponsors’, logos of which are displayed either as the upper logo of the leading arm (right above the IPL logo) or on the non leading arm. Lastly, the ‘official sponsors and partners’ get their logo presence on the non leading arm, playing trousers, headwear, equipment and/or merchandise.
What does the Board gain from such Associations?
Owing to the virus and practically no cricket this year, the world’s richest cricket association is also amidst a financial crisis. Further, in the absence of legacy corporates and advertisers, and the tournament being played in foreign soil without crowds, and it’s the start-ups that have nearly redeemed BCCI from incurring enormous losses.
“Besides the BCCI, start-up sponsorships have also come as a relief for Star India. Even though the broadcaster was forced to sell its ad inventory at hugely discounted rates, the IPL gives it a chance to create fresh programming content as opposed to airing reruns of old shows, which fetch zero revenues,” read YourStory Media
Thus, despite the sluggish economy and covid-19 related disruption, Star India may cross ₹2,000 crore IPL advertising revenue, which has been selling IPL inventory for ₹12.5 lakh per 10 second spot for the entire tournament, claimed the Economic Times. Infact, Disney+ Hotstar is believed to be eyeing advertising revenues of ₹300 crore as the official streaming partner of the tournament, reported Financial Express. And precisely, it’s our home grown start-ups that have continued the legacy of India’s cricket carnival, thus bringing in a ray of hope to restore the IPL.