Following the controversies surrounding Indo-Sino relations, that led to Vivo’s exit last year and forced the BCCI to take a hit of Rs 220 crore in the 2020 edition of the IPL, the Board was expecting the mobile-manufacturer to “honour” its remaining two-year commitment to the league (for the 2021 & 22 editions).
However, as the market hints at Vivo’s exit, the BCCI has been left in a quandary once again in figuring how to recover the money from the present market. There are only two choices left: A) BCCI floats a fresh RFP, as it did in 2020, and stays in line with its policy to remain “transparent”; B) Allows Vivo to transfer the rights to a third-party and pay the balance, should the new entrant pay percentage value of what Vivo had committed.
TOI understands Vivo’s exit from IPL as title sponsor is not a certainty yet and talks are on.
Last year, fantasy sport platform Dream11 made a successful bid of Rs 220 crore (50% of what Vivo was paying) to step in at the 11th hour after the BCCI had floated an RFP for lack of any other choice. In doing so, Dream11 had “offered” to also pay Rs 240 cr for 2021 and Rs 260 cr for 2022 editions of the IPL, offers that were firmly rejected by the cricket board.
“So, Rs 240 cr remains a benchmark of sorts. The BCCI should do a fresh RFP because of three reasons: First, it’ll ensure there’s transparency; second, they don’t have to take money from a “Chinese company”; third, there’s time because the 2021 edition is only beginning in the second week of April,” say those tracking developments.
As things return to square one and Vivo looks to “transfer” its rights to interested parties at the earliest so as to exit this space, the BCCI will “expect” to derive the same value (Rs 440 crore) through whoever shows interest in coming aboard next.
“The question here is will Dream11 now agree to pay the same amount of Rs 240 crore? Or will a competitor like, let’s say, Unacademy offer the same price? Vivo will then have to shell out the remaining amount as part of their exit strategy to compensate the Board if they decide not to float a fresh tender or RFP,” sources add.
These are options that’ll come into effect only if BCCI and Vivo fail to find common ground, especially given the factors surrounding the ecosystem from a political and social perspective.
These were the precedents in place when beverage-maker PepsiCo had transferred the IPL rights to Vivo in 2014-15 and when edu-tech app Byju’s took over the Team India Jersey sponsor from Oppo – another Chinese company – in 2019.
“So, the formula is set. The question is not about a transition now. It’s about deriving value. The BCCI will expect Rs 440 crore to come to their kitty and not lose an official partner in doing so. Can that value be unlocked?
TOI understands Tata Motors, who had shown initial interest in 2020 before backing out, have once again decided to stay away. Meanwhile, even as speculation remains rife that Mobile Premier League (MPL), the apparel sponsors for Team India, are “interested”, the BCCI is clearly tied in conflict here.
“The BCCI was expecting Vivo to stay. That was their Plan ‘A’ as well as Plan ‘B’. If Unacademy comes on board as Vivo’s replacement, BCCI will lose out on an official sponsor, so that means another Rs 45-odd crore. Will they find a replacement? These are questions they have to answer,” industry executives say.