The Indian Premier League's (IPL) title sponsors VIVO are on the verge of exiting from their contractual agreement with the BCCI ahead of the 2020 season. The Chinese mobile handset manufacturer, who had been discussing deliverables with the BCCI as recently as last week, found themselves on receiving end of a social media backlash post the Governing Council meeting, decided to stay on with their sponsors for IPL 2020. This outrage has its roots in the diplomatic and border tension between India and China.
Neither BCCI nor VIVO have confirmed the development. Senior franchise officials have confirmed to The Times of India (TOI) that they haven't been officially communicated of the development and have put the onus on BCCI to figure out a contingency plan, should it come to that. It is as yet unclear if the split could be just for one year or more.
The 11th hour withdrawal of VIVO is a blow for the IPL and its franchises in an already difficult financial climate amidst the pandemic. VIVO retained the IPL title sponsorship deal in 2017 with a winning bid of INR 2199 crore ($293m) for five seasons (2018-2022). It represented a massive 454% jump on the title contracts held in the 2012-17 cycle. It meant that BCCI stood to receive approximated INR 440 crores ($58.6m) per season of the IPL, which it will now have to recoup.
Franchises are keeping a close eye on the developments as it affects their financial planning ahead of the season. The Royal Challengers Bangalore, for instance, already stand to lose approx. INR 35 crore ($4.67m) in gate revenue with the tournament moving to the UAE and likely played to empty stands.
According to the revised (in 2018) revenue sharing agreement between BCCI and IPL franchise owners, teams stood to receive 50% of the income from the central rights including broadcast, title and other sponsorship deals struck by the board. So roughly INR 220 crores ($29.3m) from the title rights deal would be split across eight teams - amounting to an average share of INR 27 crores ($3.67m) per season for a franchise. Given teams have to incur additional expenses in setting up a base in the UAE, franchises are eagerly waiting to see if the BCCI can offset this loss with a new deal.
John Stephenson
john@cricketinvestor.co.uk
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