Cricket Article

IPL Franchises Could Bear Losses

IPL Franchises Could Bear Losses Photo: TT
IPL Could Face Some Losses

The various stakeholders associated with the IPL (Indian Premier League) are facing a possibility of a revenue loss this year.

The 13th edition of the worlds richest franchise cricket tournament was due to start in India on March 29th but was suspended indefinitely because of the coronavirus outbreak. After months of considering alternatives, it has now been decided that it will be staged in the UAE, beginning on September 19th, the health situation in India meaning that it has to be played overseas.

That has already imposed additional costs on the eight franchises involved in the competition in the form of extra travel and accommodation costs. And that is before considering the loss of gate money normally a major source of income with all the matches due to be staged behind closed doors.

And now comes news that the IPL are set to lose their major sponsor for this year, at least.

In 2018, Chinese mobile phone operator Vivo acquired the IPL title rights in a five-year deal worth US $330 million (plus associated royalties). However, Vivo is set to withdraw from that arrangement, at least for this year, because of the prevailing anti-Chinese sentiment in India, following border clashes between the two countries last month.

At the weekend, the Confederation of All-Indian Traders (CAIT) published an open letter to the Indian government calling on them to intervene and stop the sponsorship deal. The BCCI, responsible for cricket In India, including the IPL, initially iterated their determination to stick with Vivo, but, after a public backlash, they have now had to back down, after discussions with Vivo.

A number of other Chinese brands, like Lenovo and Huawei who normally advertise heavily during the IPL on Star India, the BCCIs broadcast partner, are also expected to scale back significantly their spend during this years tournament.

This will likely have a severe impact on the finances of the competition this year and the various franchises. Indian sponsors and brands may step into the breach, but they unlikely to generate anything like the same amount of revenue, especially with marketing and promotional budgets slashed because of the financial impact of the Covid-19 pandemic.

The only upside for those involved is the fact that at least the tournament is going ahead, albeit in a reduced form. The financial consequences of a cancellation would have been far worse for all concerned.

Suneer chowdhary
Sports Pundit staff writer @suneerchowdhary
ICC-accredited cricket journalist, covers Team India through their cricketing journey around the world

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