Historically, cricket has become a fantastic forum for brands to communicate with customers, as the popularity of the game is second to none and reaches more than a billion people. That is why, when the Indian Premier League (IPL) was introduced in 2008, it was considered a paradise for sponsors. The IPL gave brands immediate and wide-ranging exposure. In exchange, brands invested millions of dollars in sponsorships, either in the central league and/or in individual franchises, which contributed to the largest revenue source of the IPL.
According to financial consultant Duff & Phelps, the league’s revenue more than doubled from $3.2 billion in 2014 to $6.8 billion in 2019. In terms of INR, the IPL ecosystem is worth Rs 47,500 crore, with its brand value of 13.5 percent in the tournament’s last edition (2019)
The richest cricket league in the world hit a roadblock as a pandemic ravaged India. IPL 2020, originally scheduled to begin on 29 March, has been forced into uncertainty. Several stakeholders shared concern about its sustainability at a time when the sport was hit hard in general.
Only a month before the beginning of the league on September 19, BCCI as title sponsor roped in Dream11. This is the second partnership between the domestic gaming unicorn and the IPL after having become its digital sponsors in 2019. Dream11 paid Rs 222 crore for funding the title, which is a far cry from what IPL normally attracts.
The previous title sponsor of the event, VIVO, who dropped out due to India’s growing geopolitical tensions with China, paid Rs 440 per season for a crore. The industry has praised Dream 11 for “a steal” (Interestingly, BYJU ‘S also bided edtech decacorn for the title sponsorship, offering Rs 201 crore.)
BCCI also roped Unacademy in edtech unicorn and credit card payment system CRED as ‘private partners’ of IPL after Dream11. Both startups are reported to have paid Rs 40 crore each, allowing only three sponsors to pocket BCCI over Rs 300 Crore. Meanwhile, for IPL, Paytm is the official “Partner of the umpire.”
This year, not only the central league but also individual franchisees have been able to gain lucrative startup sponsorships.
Sequoia-backed gaming company Mobile Premier League (MPL) has become the ‘official sponsor’ for Kolkata Knight Riders (KKR) and Royal Challengers Bangalore (RCB) — two of the league’s most talked-about franchises, courtesy owner Shah Rukh Khan and star player Virat Kohli, respectively.
Others like MakeMyTrip, Myntra, boAt, Paytm Insider, Fan code, etc. have partnered with teams that allow them to sponsor Rs 10 crore to Rs 15 crore. Reports say that even IPL broadcaster Star India had roped as on-air sponsors before COVID-19 hit in the likes of PhonePe, Khatabook, Swiggy, and Amazon. However, if those businesses later maintained their relationship, it is unconfirmed.
MPL has partnered with two high-value franchises which claim to be the youngest company to be affiliated with the league. Surely a partnership like that doesn’t come cheap. But the startup takes a different view of that.
Abhishek Madhavan, VP, Growth and Marketing, MPL, “The IPL is this year’s most anticipated cricket event, and probably the country’s largest media event in terms of scope and effect. Any IPL-related brand can become a household name, and we’ve seen it this time and again. Many of the observable metrics that we are looking at are brand recognition, mass visibility, and mass consumer confidence.” “Of course, it’s not easy for a two-year – old company to pull off all of these massive collaborations, but it’s a sign of our success that we’ve been able to achieve in a short period. As of pre-COVID stages, we have risen 3-4X, “he adds.
What is benefit of Startups?
Experts believe that visibility platform and user growth engine for startups in India.
Santosh N, Managing Director, D and P Advisory LLP says “Giving these startups tremendous exposure in association with IPL. For those of them that are positively affected by the pandemic, the acquisition cost has fallen and start-ups through look to either expand or raise their market share significantly. They ‘re benefited by an affiliation with a property like IPL. Since most of them are in the cashburn process and are well-funded by deep-pocketed investors, these investments may make business sense for them and not dramatically affect their cash flows.
Startup sponsorships have also come as a relief to Star India , in addition to the BCCI. While the broadcaster has been forced to sell its ad inventory at massively discounted rates, the IPL offers the broadcaster the ability to produce fresh programming material, as compared to broadcasting reruns of old shows that receive zero revenue.
Pandemic brought recession to a money making machine like IPL, but hopefully this will last one season only.