Sponsorships could be first casualty of ban on teams

Termination of the Indian Premier League (IPL) franchise agreements with Rajasthan Royals and Kings XI Punjab by the Board of Control for Cricket in India (BCCI) has cast a spell of uncertainty over their sponsorship deals. While some media planners are optimistic that the teams will find legal recourse for their participation in the fourth edition of the cricket tournament in 2011, others say sponsors could simply walk away.

“Sponsors of the two teams are unwilling to sign contracts at the moment, given the developments. They are hoping the two teams will sort out the issues,” said a media planner, asking not to be named.

Ultratech Cement, the title sponsor of Rajasthan Royals in the last two seasons of the T20 tournament, did not comment on its future association with the team. According to media planners, the cement major spent around Rs 4 crore for the title sponsorship in 2010.

UB Group sources said they would wait and watch. The group had a fairly elaborate sponsorship arrangement with Rajasthan Royals over the last three seasons, including jersey branding and in-stadia visibility. The group’s popular Kingfisher brand was an associate sponsor to the Royals.

In the third season, Rajasthan Royals’ other sponsors were HDFC Standard Life, Wrigley’s, Puma, Linc Pens, TCS, Amity University, Suvidhaa, Boomer, Orbit, Musafir.com and Paras Buildtech.

Media planners also said most sponsorship deals are signed on an annual basis. “Given the unpredictability of the tournament, sponsors prefer to sign yearly deals with the franchisees,” said another media planner with a prominent Mumbai-based agency.

He added, “Ultratech became the title sponsor of Rajasthan Royals (in 2009) after the team won the tournament in the first edition in 2008. They renewed the agreement again this year. However, going forward, it is uncertain what they will do.”

While Rajasthan Royals received Rs 1-4 crore for every sponsorship deal, Kings XI Punjab bagged Rs 1-2 crore. In the last season of the tournament, Kings XI Punjab had 10 sponsors, including Emirates (title sponsor), Mountain Dew (PepsiCo), Royal Challenge (UB Group), Whirlpool, Wrigley’s, Reebok, ACC Cement, Aroma, Digicable and Gulf Lubricants.

For Kings XI Punjab, UB Group’s association was only for the third season. A spokesperson for the UB group said he was not in a position to comment on the issue. Attempts to reach Reebok yielded no results. A PepsiCo spokesperson did not wish to comment on whether the company would renew the company’s contract with Kings XI Punjab.

BCCI on Sunday terminated the contracts with Rajasthan Royals and Kings XI Punjab for breaching ownership rules. This means these two teams will not participate in IPL-4 in 2011.

Asked about the breaches committed by Rajasthan Royals, BCCI President Shashank Manohar said, “They had a different bidder during auctions. The agreement was entered into in the name of a different company. The shareholding patterns were different and then the shares were transferred to different people, without the permission of the governing council.”

The owners of both the teams had expressed shock and called BCCI’s move unfair.