Tata Group Replaces Vivo As IPL title Sponsors For 2 years; BCCI Set To Reap A ₹1124cr Windfall

by PTI - Jan 11, 2022 06:35 PM +05:30 IST
Tata Group Replaces Vivo As IPL title Sponsors For 2 years; BCCI Set To Reap A ₹1124cr Windfall
VIVO IPL
Snapshot
  • One of India's largest business conglomerates, the Tata Group, will replace Chinese mobile manufacturer Vivo as the Indian Premier League's title sponsor for the next two years.

    Tatas is reportedly around ₹670 crore for two years of title sponsorship while Vivo will pay a total of ₹454 crore for termination of contract which makes it a win-win situation for the BCCI as it is set to earn a whopping ₹1124 crore for seasons 2022 and 2023 respectively.

One of India's largest business conglomerates, the Tata Group, will replace Chinese mobile manufacturer Vivo as the Indian Premier League's title sponsor for the next two years.

As per reliable sources, the Tatas will be paying around ₹670 crore for two years of title sponsorship while Vivo will pay a total of ₹454 crore for termination of contract which makes it a win-win situation for the BCCI as it is set to earn a whopping ₹1124 crore for seasons 2022 and 2023 respectively.

''Yes, Tata group is coming in as IPL title sponsor,'' IPL chairman Brijesh Patel confirmed the development to PTI.

BCCI secretary Jay Shah welcomed the company in the new role.

''This is indeed a momentous occasion for the BCCI IPL as the Tata Group is the epitome of global Indian enterprise with an over 100 year old legacy and operations in more than 100 countries across six continents,'' Shah was quoted as saying in a media release.

It is learnt that Tata Group could remain title sponsors for the IPL's 2023 season too as that was the one year concession given to Vivo since it lost a season of sponsorship in 2020.

Vivo had a deal of ₹2200 crore for title sponsorship rights initially from 2018-2022 but after the 2020 Galwan Valley military face-off between the Indian and Chinese Army soldiers, the brand took a break for a year in view of a public backlash and Dream11 replaced it in the IPL.

However, Vivo was back as IPL tittle sponsor in 2021 even as speculation raged that the company was looking to transfer the rights to a suitable bidder and the BCCI approved the move.

It is learnt from reliable sources in the BCCI that the Board would be earning ₹547 crore in 2022 and ₹577 crore in 2023.

As per information available, Vivo had committed ₹996 crore for the two years' title sponsorship (2022 and 2023) with ₹484 crore in 2022 and 512 crore in the next year.

The value shot up as the IPL expanded to a 10-team event featuring 74 matches this year instead of the 60 which were in place with eight teams.

So how does the break-up of ₹1124 crore windfall work for BCCI? The Tatas will be paying ₹670 crores at the rate of Rs 335 crore per year. Of this, ₹301 crore will be the Rights Fee and an additional Rs 34 crore would be the incremental fee (for increase of 14 games). But since Vivo decided to terminate the contract, it will have to pay the difference in both years -- ₹183 crore for 2022 and ₹211 crore for 2023. In addition to that, Vivo will also have to pay 6 per cent assignment fee for both years which comes to ₹29 crore in 2022 and ₹1 crore in 2023.

So in all, Vivo will get out of the sponsorship deal by paying ₹454 crore which is effectively a little over one year of sponsorship money originally committed by the company.

For the Tatas, it's a great deal considering that they are getting marquee sponsorship rights at a lesser cost for the next two years. The biggest winner is the BCCI, which stands to earn from both the new sponsor as well as the outgoing one.

''The BCCI like the TATA Group is keen to promote the spirit of cricket across international borders, and the growing popularity of the IPL as a global sporting franchise bears testimony to the BCCI's efforts,'' Shah said.

''We are truly happy that India's largest and most trusted business groups has believed in the IPL growth story and together with the Tata Group, we will look to take Indian cricket and the IPL forward to greater heights,'' he further added.

The majority of IPL stakeholders are happy to see the back of Vivo as most of them weren't comfortable with a Chinese company on board after the 2020 incident that heightened diplomatic tensions between the two countries.

''This was supposed to happen sooner or later as Vivo's presence was bringing bad publicity for both the league as well as the company. With negative sentiment around Chinese products, the company had to pull out of the sponsorship with one season left for the deal to be completed,'' said a BCCI source.

The economics of sponsorship is that BCCI keeps 50 per cent of the money and distributes the rest among the IPL franchises which are now 10 with the addition of two new teams this year.

It is understood that the fresh tenders for the next cycle will be invited in 2024.

''The Tata group wants to be title sponsors for five years but there needs to be a bidding process in place. But the BCCI is mulling on having a Right to Match option for the Tatas in case they are interested in the next cycle,'' a source said.

Also read: The Economics Of IPL Franchises

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