Teams fear revenue hit if Pepsi pulls out of IPL sponsorship

It’s not just about the title sponsorship of the Indian Premier League (IPL) as Pepsi threaten to pull out, the T20 league franchises’ concerns also include the fate of the lucrative individual sponsorship deals they have with PepsiCo India.

It’s not just about the title sponsorship of the Indian Premier League (IPL) as Pepsi threaten to pull out, the T20 league franchises’ concerns also include the fate of the lucrative individual sponsorship deals they have with PepsiCo India.

So far, even the new BCCI regime has done little to improve the damage caused to the IPL by the various controversies.(Ajay Aggarwal /HT Photo)

It is learnt that barring Mumbai Indians, most other IPL sides have sponsorship deals with Pepsi for ‘pouring rights’. The cola giants pay around Rs 2 crore per season each for the exclusive rights of selling beverages of their brands at the franchises’ home stadiums during the games.

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“If the news about them pulling out of the IPL sponsorship is true, it’s a big loss. In these times when the brand value of the IPL is down so much, it will be difficult to sell the ‘pouring rights’ for more than Rs 50 lakh,” the co-owner of a franchise observed.

“The tobacco and liquor companies were the ones to spend big money in sponsorship deals in cricket, then the cola giants became the big sponsors. In between, there were a few to associate with cricket like DLF and Hero Honda, but they pulled out too. If the cola companies pull out, it’s not good for the sport,” he said.

Read | Paytm’s parent in talks with BCCI, may bag IPL sponsorship deal

Revenue fall

The franchises are also concerned over the fact that the revenue share of the teams, which is based on the IPL’s income, might be affected. “The state of economy is not great, it will hurt the central revenue share of the teams if the title sponsorship amount drops,” he said. The central revenue pool is shared at 60:40 between the teams and the BCCI. Along with the team’s sponsorship, the central revenue pool, divided equally, is the main source of income for the teams. There is no doubt that the main reason for panic among the stakeholders is related to the image of the brand taking a beating.

So far, even the new regime has done little to improve the damage caused to the high-profile league by the various controversies, especially the recent spot-fixing and betting scandal.

There is still no clarity over their plans for the next IPL season after the verdict of the Justice RM Lodha committee suspending Chennai Super Kings and Rajasthan Royals for two years. Even some BCCI members are not happy, as a senior functionary put it: “To improve the image of the Board is the challenge before (president) Shashank Manohar. Unless you take strong steps, we will not be able to convince the stakeholders. Just talking is not going to help. When you are in power and don’t do anything about it, you can’t then complain if the sponsors desert you.”

Some of the IPL teams are pinning their hopes on the new Board president. “Manohar has the ability to put things in order. He has his own way of dealing with it, if he can put things in order, it will be great. To lose a sponsor halfway is not good for any organisation,” said an IPL team official.

IPL chairman Rajeev Shukla, though, said the board was hopeful of convincing Pepsi to stay on board. “We are in discussions with Pepsi and are confident of resolving it very soon,” he told HT.

(With inputs from Firoz Mirza)