Brands pad up for IPL 2020

Brands had earlier allotted spends for the IPL, the Asia Cup and the T20 World Cup, which were all scheduled for 2020, and now with only the IPL happening this year, these spends are getting invested on the T20 tournament.

According to Broadcast Audience Research Council (BARC) India viewership data, a whopping 462 million viewers watched the 12th edition of the Vivo IPL in 2019, with its reach up 12 percent compared to the previous season.

Gautam Thakar, chief executive officer (CEO) of Star Sports, is gung ho. And, why wouldn’t he be, with the broadcaster of the Indian Premier League (IPL) roping in a clutch of top advertisers and with expectations running high that the Dream11 IPL is poised to achieve a viewership record.

Says Thakar, “We are well ahead of our targets with more than 75 percent of our inventory sold. This includes 13 broadcast sponsors and 60 advertisers. Advanced negotiations are underway with many more as we gear up for the biggest Dream11 IPL ever. FMCG (fast-moving consumer goods) is a new and big investment category this year with brands like Mondelez, Coca-Cola, Nestlé, P&G (Procter & Gamble), amongst others, coming on board.”

Besides these, key sectors such as online shopping, edutech, BFSI (banking, financial services and insurance), fantasy sports and auto are in conversation with Star, too. With matches beginning at 7.30pm and a huge captive audience cooling their heels at home due to the Covid-19 pandemic, the 2020 IPL season is poised to achieve a new viewership record.

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According to Broadcast Audience Research Council (BARC) India viewership data, a whopping 462 million viewers watched the 12th edition of the Vivo IPL in 2019, with its reach up 12 percent compared to the previous season. Star aired the matches in eight languages and across 24 channels, besides movie channels on Sundays. The total consumption increased from 300 billion minutes the previous season to 338 billion minutes in 2019, making it the highest ever in IPL’s 12-year history. And Thakar expects this year’s IPL to beat that record as well.

The broadcaster has said that its pricing for ad spots remains the same as what was planned for March 2020 (pre-Covid levels). Star is learnt to be charging about ₹12-12.5 lakh per 10 seconds, according to media-planning executives.

Star is said to have increased its programming content for pre-shows in a bid to make more inventory available for brands that want to advertise on the IPL during the festive season. Media-buying executives say that brands had earlier allotted spends for the IPL, the Asia Cup and the T20 World Cup, which were all scheduled for 2020, and now with only the IPL happening this year, these spends are getting invested on the T20 tournament.

It’s little wonder that brands are scrambling to board the IPL bandwagon. While Dream11, PhonePe, Amazon and Byju’s have come on board as co-presenting sponsors, brands such as Polycab, USL, Coca-Cola, ITC Foods, Mondelez, Kamla Pasand, RummyCircle, AMFI and P&G have come on board as associate sponsors. Says Shashi Sinha, CEO of IPG Mediabrands India, “Brands are looking for a boost in demand during the festival season and hoping that both in-home and out-of-home consumption witnesse an uptick. The IPL will help brands in being top-of-mind with its immense reach in a sustainable manner.”

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While Star Sports seems to be in clover, it’s perhaps not so hunky-dory for the team owners themselves. For one, the sponsorship revenues will be down as Dream11 will be paying BCCI far less at ₹220 crore a year than the ₹440 crore a year promised by Vivo. With Vivo pulling out, Dream11 took up the title sponsorship, but with the Future Group also pulling out, the board was short of two associate sponsors – of ₹40 crore each. But it has managed to rope in Unacademy and CRED at an undisclosed amount.

The broadcaster has said that its pricing for ad spots remains the same as what was planned for March 2020 (pre-Covid levels). Star is learnt to be charging about Rs12-12.5 lakh per 10 seconds, according to media-planning executives.

 

While the payout to the franchisees of the sponsorship fee will obviously be lower, it won’t have too much impact since the sponsorship fees share is not the predominant component of the central rights income pool. Half of the annual income from the broadcaster, Star India, is distributed equally among all the eight franchises.

The franchises also stand to lose on gate collections as the matches will be played in the UAE to mostly empty stadia bereft of an audience. According to reports, teams together earn ₹130-160 crore from ticket sales — no small beer. Teams such as Mumbai Indians and CSK earn approximately ₹20 crore or more on ticket sales from seven home matches. They stand to lose this revenue this year.

The franchises are struggling to find a solution to the problem as there hasn’t been a clear guideline from the BCCI. One of the franchise owners — who is part of a conglomerate — stated that they have to deal with a “marginal loss” in these trying times. “There will be some sort of in-house sponsorship revenue, but how much? That’s too early to say,” says the franchise owner. Franchise officials have indicated that the sponsorship revenue is around “10 percent” lower as compared to last season. However, that’s not the final figure. In case the BCCI doesn’t back the franchises financially, this figure could go up.

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However, even though the matches will be played in empty stadiums, the sponsor logos and banners are expected to be put up. “Since the matches will be telecast and streamed live, the sponsor commitments can be fulfilled,” he explains. However, there is no clarity on whether the BCCI will compensate the franchises for the gate fees.

Most franchises claim they have been able to “maintain the momentum” in terms of bagging team principal sponsorship rights. However, franchises – Rajasthan Royals, Kolkata Knight Riders (KKR) and Delhi Capitals – lost their original sponsors with the postponement of the IPL and had to settle for newer options. Dubai Expo backed out of the Rajasthan Royals title sponsorship deal and now TV9 Network has come in at a “relatively lower price.” For Delhi Capitals, too, principal jersey sponsor Daikin backed out of its ₹14 crore deal. JSW, which is also the co-owner of the franchise, has picked up the sponsorship for a reduced price. After losing the IPL title sponsorship deal to Dream11, Byju’s has also withdrawn its KKR principal sponsorship deal, with Mobile Premier League replacing it.

Some franchises are on a strong wicket. Take the India Cements-owned CSK, which is doing well on field as well as off. In fiscal year 2020 (FY20), Chennai Super Kings Cricket Ltd, as a standalone company, garnered revenue of ₹356 crore, down from ₹418 crore in FY19. It reported a profit of ₹50 crore in FY20, down from ₹111 crore in the previous fiscal.

However, in financial year 2019-20, the share of team revenue from the BCCI was down, and this year with the Dream11 sponsorship much less, franchises too will need to expect less, going by the CSK experience. CSK secured ₹240 crore as income from the grant of central rights in FY20 (₹294 crore in FY19). But given CSK’s star status, its sponsorship income from other brands was higher at ₹68 crore in FY20 compared with ₹55 crore year before.

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Multiple brands have clambered aboard the IPL express, either with Star or the BCCI or as team sponsors. Balkrishna Industries, for instance, which makes off-highway tyres under the BKT brand, is sponsoring as many as six teams, which will sport its logo on the team jerseys, this season.

But do brands really get a bang for their buck out of a tournament like the IPL, where both the cricket and the brands are clamouring for attention? Giraj Sharma of brand consultancy BehindTheMoon, says there is no guarantee that a brand will stand out even if a company forks out a fair bit of money on IPL sponsorships. As he says, “Every marketer’s nightmare is that their brand will get lost in the advertising clutter of TV commercials.

So, you need to play differently and create advertising that either has cricket embedded in it or screams for attention creatively.” Like the Vodafone ZooZoos commercials, for instance, launched during the second edition of the IPL in South Africa in 2009.

With the IPL set to get underway soon, cricketers will toil on the pitch while brand owners will be sweating it off the pitch as well, hoping they haven’t bowled a wrong ’un!

With inputs from The Hindu BusinessLine ’s Meenakshi Verma Ambwani and G. Balachandar and Sportstar ’s Shayan Acharya.