The Justice Lodha committee verdict on Tuesday has left the IPL sponsors, who have committed hundreds of crores of rupees to the League, anxious. Cola major PepsiCo had won the League’s title sponsorship for a whopping Rs 396 crore for five years starting 2013 — nearly double of what the previous title sponsors DLF had paid in 2008.
The deal, which many experts had then dubbed as over-valued, comes bundled with a “force majeure” clause that allows termination of contract because of unanticipated circumstances. The company told HT it will “discuss” the issue of the banning of CSK and RR with the Board of Control for Cricket in India (BCCI) to find a “solution”.
PepsiCo did not confirm or deny whether it was considering invoking the force majeure clause to look at a possible exit from its title sponsorship deal given the sudden turn of events that has sullied the tournament’s reputation. “We remain committed to ethical conduct in sport and expect that issues surrounding IPL are adequately and swiftly addressed. The faith of cricket fans is important and needs to be restored in the interest of the game,” a PepsiCo India spokesperson told HT on email.
“With reference to your query on the ban on the two teams as reported in the media, we will discuss it with BCCI and are hopeful they will be able to find a solution, which is in the best interest of all stakeholders,” the spokesperson added.
{{/usCountry}}“With reference to your query on the ban on the two teams as reported in the media, we will discuss it with BCCI and are hopeful they will be able to find a solution, which is in the best interest of all stakeholders,” the spokesperson added.
{{/usCountry}}The company, however, refused to respond to specific questions related to financial and contractual terms on the sponsorship deal. “We do not comment on contractual terms in public,” the spokesperson said.
Sources pointed out that several conditions appear to have been violated, which can allow all major sponsors, not just the title sponsor, with whom BCCI had inked deals, to call for termination of contracts.
A spokesperson for Aircel, CSK’s lead sponsor, said: “It has just been announced and we are reviewing our position in the matter.”
Experts said the developments could prompt some sponsors to review their outlook towards IPL. “The development will impact the brand value of IPL. After all, CSK and RR were the top two teams,” said Prahlad Kakkar, renowned ad film director.
Media buyers, who advise and invest on behalf of clients, said that although the string of allegations can hurt the tournament’s brand image, in the long run it could help restore trust.
“In short term it will affect the business of IPL and its brand value. However, in longer run, it will boost the trust of audience and advertiser. This stern verdict will clean up the institution for future games,” said a media buyer requesting not to be identified.