Sahara, Airtel only bidders for Men in Blue

High price deters India Inc majors from bidding.

Sahara India and telecom major Bharti Airtel are the only two bidders for the over-three-years’ Indian cricket team sponsorship deal. Saturday was the last date for submitting the bids and the winner will be declared on Monday.

The response was lacklustre considering that leading Indian companies, which include consumer electronics giant Videocon, steel company Monnet Ispat, the Reliance ADAG group, sports marketing firm Percept and Nimbus Sports, were all considering to make a bid. However, many of them said the minimum base price of Rs 2.5 crore for each match that the rights owner had to pay for the team was too steep.
 

NOT MANY TAKERS

• Sahara India controls the rights for the Indian cricket team, which allows them to use its logo on the jersey of Indian cricket team
• It paid BCCI over Rs 400 cr for the deal in four and a half yrs
• BCCI’s deal with Sahara for team sponsorship will come to an end in June
• Bidders require to have Rs 1,000 cr turnover and will have to pay a security deposit of Rs 50 cr with the bid that they make
• Winning bidders have to pay the bid amount for one year upfront

Videocon Chairman Venugopal Dhoot remained non-committal on his bidding status. He said, “I would not be able to disclose our position in the bidding process.” It was learnt that Videocon did not submit its bid document on Saturday.

This is the second time this year that Videocon has failed to get a pie of Indian cricket. Though the group had a significant advertisement budget for cricket it was not the official sponsor of the team. Earlier this year it had failed to own a team in the Indian Premier League as its bid had fallen short of Sahara’s and Rendezvous Group’s bids for the two new IPL teams on offer.

Shailendra Singh of Percept also declined to comment. “I would not like to comment on this as this involves our clients,” he said. Sahara India and Airtel are both Percept’s clients. Spokespersons of Nimbus did not respond, too.

Spokespersons for Bharti and Sahara also declined to comment on the issue. While Sahara has been a sponsor of the Indian cricket team in the past, Airtel has been a steady advertiser during cricket tournaments.

Executives of Monnet Ispat could not be reached for comment. On Friday, Sandeep Jajodia, vice-chairman and managing director, Monnet Ispat, had said: “We have picked up bidding documents. Our office is studying the documents; we have not taken a call yet on which teams to sponsor.”

Sahara India which controls the rights for the team — allows them to use its logo on the Indian cricket team — paid BCCI over Rs 400 crore for the deal in the last four-and-a-half-years.

With a base price of Rs 2.5 crore per match which roughly comes to around Rs 375 crore (there would be over 150 matches) for three and a half years beginning from 1 July 2010 to 31 December 2013, the offer from BCCI is much lower than the Rs 3 crore per match which they demanded when the rights came for rebidding last December.

However , due to no takers from companies, BCCI was forced to extend the terms of the sponsorship with Sahara which was to end in December last year by another six months. However some of the potential bidders say that even this price is too high and should be decreased for making the bidding competitive.

The bidders require to have a turnover of Rs 1,000 crore, and will have to pay a security deposit of Rs 50 crore with the bid that they make. The winning bidders also have to pay the bid amount for one year upfront.

Insiders close to the bidding process say that it is possible for Sahara and Airtel to jointly come together and take the rights which many say is permitted under the rules. BCCI’s sponsorship deal with Sahara will come to an end in June.

Meanwhile, sources said, Airtel may have a problem using its logo on the team for international matches as Reliance Communications, which is in the same business as Bharti Airtel, is the main sponsor of all ICC-led tournaments like the Cricket World Cup and the Twenty20 World Cup. Some years ago, South African Airways had objected to use of Air Sahara logo for an ICC match and, therefore, Amby Valley logo had been used.