The onset of the coronavirus and it’s subsequent effect on the economy had for long put this year’s edition of the Indian Super League in jeopardy. Lockdowns started right about the time the first match of the ball was bowled and since then it has been an anxious wait for the team owners, players, fans, broadcasters, administrators, sponsors and everyone associated with the game. “The contraction in the economy, border tensions in Ladakh and the rising number of cases have completely destabilized the sporting culture in the country, crippling thousands of people working in the ecosystem. The successful resumption and incident-free completion of the IPL is going to be key in restoring confidence in the industry and its numerous stakeholders”, said Praveen Sinha Jabong Co-Founder.
IPL – the brand feels the effects of the pandemic
In terms of sheer popularity, the IPL today is among the top 5 sporting leagues in the world. The IPL ecosystem was valued at an approx INR 47,500 crores by the financial consultancy Duff and Phelps in 2019 but this year things have taken a bearish turn due to the circumstances brought forth by the pandemic.
“The market has gone through massive shock. Whether it would recover enough to put thousand of crores worth of advertising in the next six to eight weeks is the real issue. Given the kind of economic shock we have seen, I am not sure if the market is ready to support and sustain IPL 2020”, said Star India’s Chairman Uday Shankar.
The pandemic had already crippled the sponsorship revenue stream for the organizers but the rising Indo-China tensions led to many chinese behemoths pulling out from sponsorship deals with title sponsor Vivo dropping the naming rights. This left a massive gap for the organizers to fulfill, especially after they had secured the permissions to go ahead with the league in Dubai.
Startups to the rescue
Having lost their title sponsor a month before the league was to resume, the BCCI wasted no time in inviting new bids for the tournament’s title rights. Dream 11 picked up the rights for just 220 crores, a 50% flat reduction to what VIVO was scheduled to pay in normal circumstances. Byju’s who already sponsor the Indian national team was also in the running along with Unacademy. Fintech Startup Cred has signed up as an associate sponsor for the league as well.
“This is the first time ever that we are seeing startups absolutely dominate the sponsorship landscape in the IPL. The unicorns from the edtech, gaming and fintech space who have managed to grow their numbers during the pandemic have cashed in on the discounts on offer. The franchises have also managed to sell off most of their inventory with the likes MPL picking up the ‘front of jersey’ spot of Kolkata Knight Riders. Many of the big brands have stayed away owing to heavy losses in the last couple of quarters, for instance, AC brands which tend to spend heavily when IPL is held in March-April have stayed away because summer is almost over in India”, observes Praveen Sinha.
Will this shift in sponsorships be the new norm and how sustainable is it?
The IPL is easily the most watched event on Indian television and all brands associating with the sporting spectacle will benefit in terms of awareness and reach. Dream 11 has gained a lot of awareness in the past by associating with sporting events and the title sponsorship should help them convert audiences who knew about them earlier into first time users. However, Praveen Sinha feels that startups have to be careful in how they balance their books considering these sponsorships are of a huge value and unless they have an over-indulgent investor, it will be hard to justify the investment if the purpose of the campaign is not fulfilled.
“As the market recovers and border tensions ease up, I am expecting traditional segments like automobiles, FMCG, consumer electronics and Chinese mobile brands to come back into the fold and the IPL to command their pre-pandemic sponsor entitlements again by 2022. At those rates, the investment will not be viable for a lot of the internet companies and hence, the traditional brands will continue their dominance as far as buying up these slots is concerned”, Praveen Sinha concluded.