IPL sponsors uncertain, as BCCI weighs Kochi call

The Board of Control for Cricket in India (BCCI) is expected to decide the fate of the Kochi franchise of the Indian Premier League (IPL) any time now. The franchise responded to the Board’s notice on Wednesday and BCCI’s legal team was studying the response.

BCCI had issued a notice to the franchise on October 10, asking the consortium of investors in it to incorporate their joint venture within 10 days. Details of the franchise’s reply were not shared by either BCCI or the investors in the consortium with whom Business Standard made contact.

BCCI’s chief administration officer, Ratnakar Shetty, said: “I do not know if they (investors in the Kochi franchise) have asked for more time. We are studying the reply of the Kochi franchise. We will update you at the right time.”

If BCCI disbands the franchise, the T20 tournament will be played amongst only seven teams in the fourth season, since Rajasthan Royals and Kings XI Punjab were expelled earlier this month and they are unlikely to participate in IPL 2011.

Said Rajeev Talwar, group executive director, DLF, title sponsor of the tournament: “We have no comments to offer on the issue. We have a five-year contract as title sponsor of the IPL. That will continue. It’s a great platform to be associated with. We have benefited from it.”

Calculations upset
If the number of teams goes down to seven, the number of matches will also go down. This would mean less visibility for the sponsors and brands associated with the tournament. A total of 60 matches were played in this year’s IPL. According to estimates by media planners, with only seven teams, the fourth season of the IPL might have a total of 46 matches only.

The loss to SET Max, the official broadcaster, on account of 14 games not happening in the fourth edition would be approximately Rs 200 crore. SET Max is said to have earned Rs 700 crore during the third edition of IPL. The expectation from the fourth season had been revenue of close to Rs 1,000 crore, given that the channel saw growth of about 40-43 per cent year-on-year from the first to the third season.

SET Max, say sources, may try and increase the ad rates for 10-second spots. This is because with a smaller tournament, television ratings or TVRs are likely to be higher, say media planners. The channel may raise rates from the current Rs 6-7 lakh for a 10-second spot to make up for lost ground in some way.

The sponsors are waiting for the clouds to clear. Adi Godrej, chairman, Godrej Group, said, “Our media team will take a call after evaluating all prospects. The fourth edition is still some way off. We’d rather wait and watch at this stage. We have been associated with the IPL for the last three seasons. We will take a call accordingly.”

Venugopal Dhoot, chairman and managing director, Videocon Industries, said: “Even if there are only seven teams, we would continue to be the official sponsors of the Mumbai Indians.”

Ravinder Zutshi, deputy managing director, Samsung India, said: “It is difficult to say anything at this point in time. The fourth edition of the IPL will happen next year around April-May. Anything can happen till then. Next year is also the year of the Cricket World Cup, which happens somewhere in March. Both the IPL and Cricket World Cup are big properties that will attract significant viewership. Most advertisers will want to be a part of the action.”

The Kochi franchise has been under BCCI’s scanner as the various partners of the consortium had not formed a joint venture company that would hold the franchise rights. The Board had issued a notice to the franchise, giving it 10 days’ time to resolve its issues and form a JV. The dispute was on who would run the affairs of the franchise.

The investors include Anchor Earth, Parinee Developers, Rosy Blue and Film Wave, who hold 75 per cent of the equity. The remaining 25 per cent has been given to the family of Gaekwads — Shailendra, his brother Ravi and their parents, plus a few others — as free equity for services rendered in successfully bidding for the franchise. The consortium had bought the franchise for $333 million (Rs 1,475 crore) in a bid earlier this year.