Vivo to Exit IPL as Sponsor?: BCCI to Take Call as Anti-China Sentiment Grows in the Country

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The Indian Premier League (IPL 2020) season this year seems to be jinxed. It is already struggling as it is ‘indefinitely suspended’ due to the pandemic. At present, they have another issue at hand. The Indo-Chinese border clash at Galwan valley recently has aggravated the issue. Anti-China sentiments are growing high in India. Amidst this, all eyes are on BCCI. People are calling out BCCI to remove all its Chinese sponsors.

There is a deep Chinese connection in Indian Cricket. Vivo, a Chinese phone manufacturer, is the title sponsor of the IPL. Apart from Vivo, there are other sponsors with Chinese investments as well.

Growing Anti-China Sentiments in The Country

On June 15th, 2020, India and China engaged in a faceoff in the Galwan valley in Ladakh. It was considered the deadliest clash in the past four decades. Twenty Indian soldiers, including the Commanding Officer, lost their lives. After the conflict between India and China, anti-China sentiments were growing high. Due to this, the calls for ‘ban and boycott Chinese products’ are growing louder.

IPL’S Title Sponsorship Deal with Vivo

In July 2017, Vivo bagged the IPL title rights for five years. The deal was worth Rs. 2199 Crore, which is 267% premium over the base price. Vivo pays Rs 440 Crore annually. IPL is the most rewarding T20 competition in the world. It is because of the coupling of Vivo’s contract with Star India’s five-year media rights. However, the BCCI has said that they will put the demands of the country first. So, if the government puts a complete ban on Chinese products and sponsors, they will follow it.

BCCI Has Other Chinese Connections

Apart from Vivo, BCCI has other contracts with Chinese sponsors. Chinese investors like PayTM, Dream 11, BYJU’s, and Swiggy are on board. Paytm, a payment app is the title sponsor of Indian Cricket. It is the main sponsor for tournaments held in India and domestic Cricket. Alibaba, a Chinese e-commerce giant, is one of its investors. Alibaba has 37.15 per cent stake in Paytm.

Tencent is one of the biggest video game companies in the world. It has a majority stake in Dream 11.

Dream 11 is an associate sponsor of BCCI and IPL. It is the IPL’s online fantasy league partner since 2019. All these companies are on the Board’s list of sponsors.

Swiggy, a popular food delivery app, is an associate sponsor of IPL. They too have an investment by Tencent. Tencent has a 5.27 per cent stake in Swiggy.

BYJU’s bought the jersey sponsoring rights of the Indian cricket team last year for Rs.1079 Crore. Even BYJU’s has a Chinese connection. Tencent Holdings have invested millions into this App. However, BCCI believes that both BYJU’s and PayTM are Indian brands. Hence, BCCI will review its contracts with Vivo, Dream 11, and Swiggy.

This shows how deep the Chinese connect is in Indian Cricket. 42% of the money goes to the Government of India as taxes. It helps the economy of the country. These contracts with Chinese investments have been quite beneficial. But the BCCI has said that they will end the contracts if the government decides to put a blanket ban. They will definitely have a difficult time coming to a decision.

The Letter of Threat By The Chamber of Trade and Industry (CTI)

The CTI Convenor Brijesh Goyal wrote a letter to the BCCI. In this letter, they asked the BCCI to end sponsorship deals with Chinese firms. He said that if they do not do this, all the traders will boycott IPL and all other international matches in India.

Meanwhile, the Indian Olympic Association (IOA) is also reviewing its Chinese sponsorships. There is a possibility that they might cancel these sponsorships. A meeting of IOA’s executives was convened to take the call on suspending an agreement with Li-Ning. Li-Ning is a Chinese company that sponsors play-kits.

Stance of BCCI

The decision to review the deal comes a day after BCCI treasurer Arun Dhumal said that they would always put the country first. Moreover, Chinese advertisers also spend a lot on advertisements that air during IPL and other BCCI events. According to an estimate, in IPL 2019, the advertisers spent Rs. 500 Crore. Vivo alone pent 150 Crore during the two-month event.

BCCI has put forward another question. Even if they cancel the deal with Vivo, who will replace Vivo and pay Rs. 440 Crore?

Without such support and investment, Cricket cannot thrive or survive commercially.

Conclusion

To date, the government has not come up with any direct guidelines. The BCCI has decided to follow the guidelines of the government. Despite the fate of IPL 2020 remaining uncertain, the sponsorship deals are long term. Sponsorship deals are very vital for IPL and International Cricket as well.

Sundar Raman is the former IPL Chief Operating Officer. He stated in his paper that 18% of the cricket revenue is generated through sponsorship. In the case of IPL, he stated that sponsorship makes 30% of the annual revenue. Further, broadcasting deals make 65% of the revenue.

However, if the BCCI decides to end the deals, it will severely affect their coffers. Now all the eyes are on the BCCI as to what they will finally decide.


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