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Sponsor brands wary as IPL goes abroad

business Updated: Mar 13, 2014 10:46 IST
Himani Chandna Gurtoo
Himani Chandna Gurtoo
Hindustan Times
Highlight Story

IPL has a new headache — because a majority of its matches this season will be played outside India.

Revenues may be hit because brands that sponsor the tournament or advertise during match telecasts are now in two minds on whether to bet big on the event.

Though only a month is left for the tournament is to begin, advertisers are undecided over their participation in the seventh edition of the league because matches are being shifted to the UAE and Bangladesh due to the upcoming Lok Sabha elections.

While some brands have reduced their spends, others are staying away from the event.

"Although we will continue to spend on advertising in the league, with the venue change, our investment will be directed more towards other properties," said Manish Sharma, managing director at Panasonic India, one of the associate sponsors.

The company has spent more than an estimated Rs 30 crore on IPL the last few seasons. Another associate sponsor of the last season, Samsung, is not investing this year at all and declined to comment. Other sponsors including Godrej and Voltas also could not be reached for their comments.

The shift is also likely to affect the franchises with the cost of logistics likely to shoot up. "Franchises will be affected most as we will not collect much of in-stadia fee," said an official from Kings XI Punjab. According to estimates, franchises collected Rs 20-25 crore last year through ticket sales. "The financial condition of most of the teams is not well and we are expected to pay Rs 600 crore to the Board of Control for Cricket in India (BCCI) as annual fees for hosting teams also," the Punjab official added.

Also, the time difference between the host countries is likely to affect the demand for television viewing time slots and ad revenues. "BCCI is likely to shift Bangladesh matches into India as well. I don't think change in location would impact ad rates," said Rohit Gupta, president, ad sales at Multi Screen Media, the company that owns SET Max, the official broadcaster of the event.

Media planners are also apprehensive over advertisers' participation. "Advertisers could be wary of spending since the viewership is likely to be hit as the event being played outside India may not connect many people," said Navin Khemka, media buyer at ZenithOptimedia.

Media buyers claim that SET Max has sold over 50% of its inventory and with the change of location, ad rates may come down. "At present, the channel is selling ad slots for Rs 5.50 lakh per ten second, which is likely to fall down to Rs 5 lakh soon," a media buyer from Madison said.