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HomeCricket NewsIPL 2020: VIVO set to exit after ‘renegotiating’ valuation, experts say BCCI...

IPL 2020: VIVO set to exit after ‘renegotiating’ valuation, experts say BCCI may get reduced sponsor deals next

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Vivo India the Indian arm of Chinese smartphone maker Vivo Communication Technology Co is prepared to pull out as title sponsors of the forthcoming Indian Premier League (IPL) 2020, based on folks accustomed to the matter on the Board of Control for Cricket in India (BCCI).

If it occurs, the transfer would leave IPL poorer by Rs 440 crore, correspondingly affecting the funds of each of the squads. Neither BCCI nor Vivo India wants to break the contract, but given the current environment, believe that this is the best thing to do—at least for 2020. BCCI will have its task to find a sponsor at a time when the economy isn’t doing well, although the hunger for sporting events may increase television viewership of the popular T20 league that will be played in UAE.

“They could return next year to complete the remaining three-year deal, which would be extended by a year to 2023 if India-China relations improve,” a BCCI official said on condition of anonymity.

A Vivo spokesperson said: “We neither accept nor deny the news. We will issue a statement once there is clarity on the situation.”

On June 19, IPL’s official handle tweeted, “Taking note of the border skirmish that resulted in the martyrdom of our brave jawans, the IPL Governing Council has convened a meeting next week to review IPL’s various sponsorship deals.”

In the IPL governing council meeting held on August 2, members were told that there was no change in title sponsors. After the meeting, the IPL’s new dates and move to the UAE were announced, with Vivo’s name in the title.

Surreptitiously, added the BCCI official, president Sourav Ganguly and secretary Jay Shah were in talks with Vivo officials, as the Chinese company wanted to withdraw to “renegotiate the valuation.”

Vivo’s deal as well as that of Star’s broadcast rights contract for Indian cricket, worth Rs 3270 crore a year, meant IPL’s revenue pool went up and the franchises began making a profit. Industry experts said while BCCI will be able to find a sponsor for IPL at such short notice, the deal may not be profitable.

“BCCI won’t get a sponsor to cover the Rs 440 crore Vivo would have paid,” said Lloyd Mathias, marketing and business strategist and former Asia marketing head of HP. “They will have to make do with a reduced price, given the limited time and also the fact that many brands have been severely impacted by the lockdown.”

“Viewer interest will be extremely high,” Mathias said. “In comparison to previous years, TRPs may be as good if not better. This may influence potential sponsors decision to bid for IPL at this late stage.”

Harish Bijoor, founder of Harish Bijoor Consults said Vivo’s exit, if true, is a smart move. “VIVO certainly realised that popular sentiment is against its sponsorship this year. Therefore, it may have requested to move out this year and come back next year to complete the contract. This is a face-saver for BCCI and the IPL. Vivo has done the correct thing at this point in time.” Bijoor said.