Tata Group takes over IPL Title Sponsor for next 2 seasons, replaces Vivo

0
339

For cricket lovers, exciting news announced by the Indian Premier League (IPL) is that for the seasons 2022 and 2023, Tata Group will be the title sponsor, which means that Tata Group has successfully replaced Vivo from the IPL market.

This marks the third consecutive season with a new title sponsor, as Vivo stepped away from the deal after a year of returning as title sponsors following a suspension. Tata Group, a large Indian business conglomerate with diverse interests both in India and overseas, has been approved by the IPL governing council to take on the title sponsorship.

The change in sponsor came about due to a face-off between Indian and Chinese soldiers at the Galwan Valley in 2020, which led to the Board of Control for Cricket in India (BCCI) severing ties with Vivo, a Chinese mobile and technology company. Vivo was later backed as the title sponsor for the year 2021, but Tata Group has now taken over for 2022 and 2023.

Birjesh Patel, IPL Chairman, confirmed the news of Vivo’s exit and Tata Group’s appointment, saying, “Vivo has exited and the Tatas will be title sponsors.” While Vivo will still pay the BCCI Rs 454 crore, as they had committed to a five-year deal in 2018, Tata Group will pay Rs 335 crore per season to take over the title sponsorship.

BCCI Secretary Jay Shah expressed his excitement for the partnership with Tata Group, saying, “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.” He also emphasized the BCCI’s commitment to promoting the spirit of cricket across international borders and the growing popularity of the IPL as a global sporting franchise.

In addition to the title sponsor announcement, the IPL GC also issued the letter of intent (LOI) to two new franchises, Lucknow and Ahmedabad, and confirmed the venue for the IPL player auctions in Bengaluru on February 12 and 13. The two new teams will have time till January 25 to sign three players before the auction takes place. The IPL GC will finalize the host cities for the tournament by the end of February.

Vivo’s Sponsorship Title Journey:

Vivo had secured the title sponsorship rights for the IPL from 2017 to 2022 for about $341 million. However, in 2020, Vivo backed out due to the force majeure clause with two back-to-back IPLs scheduled in six months. The Board of Control for Cricket in India (BCCI) then found DreamXI as a replacement for just Rs 220 crore. Vivo returned for the 2021 season with a one-year concession, as it had missed the previous season.

Vivo’s existing deal with the IPL ran till 2023, with an annual payment of Rs 440 crore. With the inclusion of Lucknow and Ahmedabad teams in the IPL, Vivo was supposed to pay Rs 484 crore and Rs 512 crore for the next two seasons. However, citing market conditions, Vivo expressed its intention to break the contract, and the BCCI decided to look for potential replacements.

The India Premier League (IPL) governing council has selected the Tata Group, an Indian business conglomerate as the new title sponsor of IPL for the seasons 2022 and 2023. Tata Group is an Indian conglomerate of around 100 companies having several businesses in the primary business sector. Tata Group will pay the board a substantial amount of Rs 335 crore per season, while Vivo will pay the remaining amount, including the assignment fee. Even though Vivo has opted out, it will still pay the BCCI Rs 454 crore for the next two seasons as per their original agreement.

The IPL chairman, Brijesh Patel, explained that there would be a slight change in the sum because of more matches scheduled in the upcoming season. He added that Tata would pay the majority of the amount as the title sponsor, and Vivo would pay the difference, including the assignment fee. The BCCI did not issue fresh tenders and worked out a deal that would benefit everyone under the given market conditions.

Reason of delay in clearing CVC:

On October 25th, CVC Capital, a well-known global private equity fund, made a substantial bid of almost US$750 million to purchase the rights to own the Ahmedabad franchise. Their bid was the second-highest, with only the RP Sanjeev Goenka Group surpassing it with a nearly US$940 million bid for the Lucknow franchise. As per the IPL’s requirement, both new teams were given until December 25th to purchase a maximum of three players.

However, the entire process came to a halt when the BCCI discovered that CVC had investments in two overseas betting companies, which is illegal in India. To ensure compliance with Indian laws, the BCCI appointed a group of legal experts to investigate CVC’s investments. It was only after confirming that CVC’s IPL investment came from its Asian funds and not from the overseas funds that were linked to the betting companies that the BCCI cleared CVC to participate in the IPL franchise.

The two new franchises now have ten days to finalize their list of players before the IPL finalizes the auction pool which was scheduled in Bengaluru on February 12th and 13th 2023.

How does the break-up of Rs 1124 crore windfall work for BCCI?

The Tatas have secured the marquee sponsorship rights for the IPL for the next two years at a cost of Rs 670 crore, which amounts to Rs 335 crore per year. Out of this amount, Rs 301 crore will be the Rights Fee, and an additional Rs 34 crore would be the incremental fee for the increase of 14 games.

Vivo, the previous sponsor, terminated its contract, and as per the agreement, it will have to pay the difference for both years, which amounts to Rs 183 crore for 2022 and Rs 211 crore for 2023. Additionally, Vivo will have to pay an assignment fee of 6% for both years, which comes to Rs 29 crore in 2022 and Rs 31 crore in 2023. In total, Vivo will pay Rs 454 crore to get out of the sponsorship deal, which is a little over one year of sponsorship money originally committed by the company.

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

The majority of IPL stakeholders are happy to see Vivo leave 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.

The BCCI keeps 50% of the sponsorship money and distributes the rest among the IPL franchises, which are now 10, with the addition of two new teams this year. The fresh tenders for the next cycle will be invited in 2024. The popularity of the Indian Premier League (IPL) is growing rapidly in both national and international borders which shows the love for the IPL. To promote the spirit of cricket, the BCCI is committed to cricket.

LEAVE A REPLY

Please enter your comment!
Please enter your name here