Will brand IPL lose its sheen post the ban on CSK and RR?

BestMediaInfo delves into the implications for brand IPL in wake of the landmark verdict by the Justice Lodha Committee suspending CSK and RR for illegal betting 

Mayur Lookhar | Mumbai | July 15, 2015

Cracking the whip on illegal betting in the Indian Premier League (IPL) and erring IPL officials and their franchisees, the Supreme Court appointed panel, led by former Chief Justice of India RM Lodha, yesterday suspended Chennai Super Kings and Rajasthan Royals from participating in IPL for the next two years.

The apex court committee also handed out life bans to Chennai Super Kings team principal Gurunath Meiyappan and Rajasthan Royals co-owner Raj Kundra for their role in illegal betting.

This verdict serves as body blow to former BCCI chief and owner of Chennai Super Kings, N Srinivasan. It's a double blow for Rajasthan Royals, as three of its players had earlier been banned for spot-fixing.

While Supreme Court's ruling is being hailed by all who see this as a move to clean up IPL's act, questions are also being raised about how much of an impact this development would have on brand IPL.

Harish Bijoor

According to Harish Bijoor, Brand-expert & CEO, Harish Bijoor Consults Inc, “It does take some sheen off IPL. If I'm to roughly say that the value of brand IPL is $4 billion, then these two teams possibly represent $1 billion. That would possibly cut 25 per cent sheen off IPL.”

At the same time, he added that IPL had both the agility and ability to bounce back. “Two new teams will be introduced and the players will get picked up by them. The only real losers here will be the owners of the suspended teams,” he remarked.

Harsha Joshi

Echoing similar sentiments, Harsha Joshi, Trading Head, Dentsu Aegis Network, remarked, “Yes, the two teams will be affected, but I don't think brand IPL will suffer enormously. In all probability, these two teams will be sold to new franchises. These controversies have been following IPL since 2013, but as we saw in the successive seasons, the viewership of IPL has remained intact.”

The two suspended franchisees might well sell off to new buyers, but what happens to the sponsors and the advertisers, who have pumped big money into them?

“The sponsors will definitely ask for their money to be refunded. Their contracts are quite binding on this and they will certainly have covered for such contingency,” said Bijoor, adding, “But nothing really happens because the advertisers will now have to find a different vehicle for their money. They have committed a particular of money to the teams, now they have to just re-siphon it to different teams, if they so wish.”

Tuhin Mishra, MD, Baseline (Sports Marketing Company), said, “Sponsors who have long term vision with IPL will not panic. Spectators and viewers want to get entertained. As long as that happens, nothing will happen to IPL in the coming years as it is too big a brand/ property globally.”

In wake of such controversies, wouldn't advertisers/ sponsors rethink on their association with IPL at large. Even before Justice Lodha announced his verdict, Indian cricket received another jolt when a young player Hiken Shah was suspended over allegations of luring a teammate into match fixing.

Corruption in sports cannot be eradicated completely, but given that BCCI itself hasn't done much to clean up the sport, sponsors, advertisers, and broadcasters might rethink on investing hugely in the game.

“In the event of IPL being contested by few teams resulting in fewer games, yes there could be a 5-10 per cent cut in ad rates. In seasons gone by, we saw two teams exiting IPL, resulting in fewer games, but the ad rates remained the same. It is too early to talk about this as there's plenty of time before the next season,” said Joshi.

Tuhin Mishra sounded a word of caution as he said, “If there are only six teams, the whole economy model of IPL will get affected as there will be fewer matches and hence, lower broadcast revenue for BCCI, which means lower share of revenue for the IPL teams. The viewership with six teams will also get affected as we are talking of two very hugely popular teams which will be missing if both the teams are actually not part of IPL 9.”

IPL has always seen at least eight teams participate, and it is now widely expected that BCCI will soon look for two new franchisees; however, similar acts of misdeeds might force sponsors and broadcasters to look elsewhere.

“Though cricket is still a religion for the masses, broadcasters/ sponsors may want to negotiate with other properties too. Though not as big as cricket, we've seen kabaddi and ISL make their mark. Having said that, even if one sponsor chooses to walk out of IPL, there are others just waiting to cash in,” pointed out Joshi.

Bijoor reckoned that like fans, the sponsors, too, would be happy that the clean-up had been done and sunny days would return.

All said and done, the Justice Lodha committee's stringent ruling may or may not affect IPL, but this verdict that will go a long way in cleaning up the game and lead to positive changes.

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