IPL news November 21, 2012

IPL sells title rights to PepsiCo for $71m

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Global beverage giant PepsiCo has bagged the IPL title sponsorship rights for the next five years (2013-17) for Rs 396.8 crore ($71.77 million approx), almost double the original title sponsorship deal done in 2008. Along with PepsiCo, the only other contender for the title sponsorships rights was Airtel, an Indian telecommunications company, who bid Rs 316 crore ($57.27 million approx). For the next five years the tournament is to be called Pepsi-IPL.

In 2008, DLF, Indian's biggest real estate company, had paid a sum of Rs 200 crore ($36.25 million approx), to own title rights for the first five years (2008-12) of the tournament. But in August DLF decided not to renew its contract, forcing the BCCI to issue a new tender. The BCCI had set Rs 300 crore as the base price for the title sponsorship.

"So far our record of selling various properties of IPL has been very good," IPL governing council chairman Rajiv Shukla said after a meeting of BCCI's marketing committee in Mumbai. "We have doubled, tripled or quadrupled the amount while selling some of the properties," Shukla said. Gautham Mukkavilli, CEO, Beverages, PepsiCo India region, said that in a country where "cricket was a religion," the IPL had become the "most revered temple where the faithful flock to."

The news of the new title sponsorship was approved of by the IPL franchises, who believe the Pepsi deal will have a positive effect on their own businesses. Raghu Iyer, the chief financial officer at Rajasthan Royals, said the new title sponsorship will, "ignite the market" for the franchises. "It is absolutely double the value. What was expected was one-half-times what DLF paid, but these guys have paid something like 80-crore mark (per year)… IPL needed this kind of positive reinstatement from a global brand like Pepsi."

Venky Mysore, the CEO of Kolkata Knight Riders, said the title sponsorship would add "tremendous value" to both the league as well as the global beverage brand. "It is terrific news that they have come on board. Pepsi would have done their homework. They know their numbers and they would have clearly seen some value," Mysore said.

According to Mysore the value addition and the returns on Pepsi's investment would be manifold. "There are analytical models that we also use to show our brands who are associated with our franchise in terms on what their return on investment is. Leave aside the fact that it is an association with a marquee product (IPL) and the synergies that brings, if you look at just pure advertisement value and the kind of the exposure that happens leading upto the IPL, during the IPL and then the rub-off effect of it continuing on, there is a very clear way of calculating what the value of that exposure is. That is how you calculate the return on investment. Pepsi would get at least five times the exposure it would normally get," Mysore said.

After DLF let the deadline of July 28 (meant for the renewal of the title sponsorship contract) pass, speculation grew about whether the value of the IPL as a brand was shrinking. The timing of that news coincided with the controversy surrounding the Deccan Chargers franchise. According to TAM Sports, a division of TAM Research, one of the leading television ratings agencies, the overall tournament rating for the fifth IPL was 3.45, compared to 3.51 the previous year - far from the TVR of 5.51 reached in 2010. The telecommunications pair of Airtel and Nokia had decided to not renew their annual title sponsorship of the Champions League Twenty20, adding weight to the growing perception that the IPL was no longer a valuable property.

The new title sponsorship with Pepsi silenced those doubts. According to a senior official from a different franchise, who did not want to be identified, despite all the negative colours IPL had been painted in, the league has always achieved what it wanted. "People have spoken negative about IPL but in the end everybody has paid the money which we have always asked for. We have never had problems at getting sponsors at our price. I will get it even in future. People will still talk so it is best we keep quiet," the official said. "Pepsi will not put in money unless they are sure about their numbers, isn't it? They are putting hardcore cash. Pepsi operates not only in India. It is a global giant and they would have done their studies," the official pointed out.

Nagraj Gollapudi is an assistant editor at ESPNcricinfo

Comments have now been closed for this article

  • CricketPissek on November 23, 2012, 14:13 GMT

    Will the "DLF Maximum" be rebranded as a "Pepsi Max" now? :-D jokes aside, this is crazy money we're talking here! Unreal

  • remnant on November 23, 2012, 11:54 GMT

    IPL is a carnival event and I for one find it to be more engaging then the T20 internationals. Somehow when I think of T20, it is IPL that comes to my mind. Eagerly looking forward to the next season. @ girdhar: mate Pakistan used to be a better team back then and its win-loss ration with India was better everywhere back then, even in India, so give due credit mate. Now its different ofcourse, India has been the better team by a distance over the last decade. I'm Indian, just for your info.

  • lancaster_park on November 22, 2012, 12:49 GMT

    Without the international players the IPL is boring. They should stop messing around and have no restrictions on the number of international players in one IPL team-until then, remove the word 'premier' from the title. The 'Indian League' would be fine...The 'big bash' is the real premier comp in T20.

  • on November 22, 2012, 12:07 GMT

    @Smith Robertson It's not IPL that disrupts international cricket. The other boards are free to go on with their schedules if they like. Ricky Ponting and Michael Clarke have skipped the IPL in the past to play for Australia. If the other boards and players willingly let their schedules be changed to accommodate the IPL, why is it IPL's fault? Put the blame where it is due.

  • on November 22, 2012, 8:26 GMT

    @kk777: Yes because these people are of Indian origin. But take me for an example, why should I care about cities like Delhi or Chennai or whatever when I wasn't born there or something? it doesn't make sense for others to support a team when they have no background history common sense.

  • on November 22, 2012, 8:23 GMT

    @indicricket: Actually I don't really care about any T20 league including Australia and England as they really don't have any valuable long history or emphasis like in other sports. Just don't like the fact that they clash with International fixtures sometimes postponing it.

  • on November 22, 2012, 8:21 GMT

    Legaleagle: WOW! I'm surprised you don't seem to understand why smaller leagues in Australia, England, Sri Lanka, Bangladesh, South Africa and so on are nowhere near close to IPL. Do these countries have a mass following like India? and numerous investors? don't think so so that's why they're nowhere near close to IPL but the Cricket is the same. As long as it helps the board financially then we can't argue.

  • indicricket on November 22, 2012, 7:08 GMT

    @Smith Robertson. I will say it again, 20 overs Cricket does not turn me on one bit. I don't want it to upset the normal Cricket calendar. But I know you do not like it, not because it upsets the Cricket calendar, you do not like it because it is an Indian league. If it were an English or an OZ league you would be singing a different tune. I like it precisely because the likes of you don't like it.

  • kk777 on November 22, 2012, 5:06 GMT

    @Smith Robertson: Just for the record, me and atleast 100 of my friends do not live in a city(or even a state) attached to any IPL team and we are very much polarised to one or other teams. So, don't worry about us. Although the same cannot be said about International fans, but the fact that you commented twice on an article related to IPL, shows that you care too...positively or negatively...better yet, out of enthusiasm or Jealousy...that is a different story altogether.

  • Sakthiivel on November 22, 2012, 4:45 GMT

    That's how BCCI works. Get bigger and better day by day.

  • CricketPissek on November 23, 2012, 14:13 GMT

    Will the "DLF Maximum" be rebranded as a "Pepsi Max" now? :-D jokes aside, this is crazy money we're talking here! Unreal

  • remnant on November 23, 2012, 11:54 GMT

    IPL is a carnival event and I for one find it to be more engaging then the T20 internationals. Somehow when I think of T20, it is IPL that comes to my mind. Eagerly looking forward to the next season. @ girdhar: mate Pakistan used to be a better team back then and its win-loss ration with India was better everywhere back then, even in India, so give due credit mate. Now its different ofcourse, India has been the better team by a distance over the last decade. I'm Indian, just for your info.

  • lancaster_park on November 22, 2012, 12:49 GMT

    Without the international players the IPL is boring. They should stop messing around and have no restrictions on the number of international players in one IPL team-until then, remove the word 'premier' from the title. The 'Indian League' would be fine...The 'big bash' is the real premier comp in T20.

  • on November 22, 2012, 12:07 GMT

    @Smith Robertson It's not IPL that disrupts international cricket. The other boards are free to go on with their schedules if they like. Ricky Ponting and Michael Clarke have skipped the IPL in the past to play for Australia. If the other boards and players willingly let their schedules be changed to accommodate the IPL, why is it IPL's fault? Put the blame where it is due.

  • on November 22, 2012, 8:26 GMT

    @kk777: Yes because these people are of Indian origin. But take me for an example, why should I care about cities like Delhi or Chennai or whatever when I wasn't born there or something? it doesn't make sense for others to support a team when they have no background history common sense.

  • on November 22, 2012, 8:23 GMT

    @indicricket: Actually I don't really care about any T20 league including Australia and England as they really don't have any valuable long history or emphasis like in other sports. Just don't like the fact that they clash with International fixtures sometimes postponing it.

  • on November 22, 2012, 8:21 GMT

    Legaleagle: WOW! I'm surprised you don't seem to understand why smaller leagues in Australia, England, Sri Lanka, Bangladesh, South Africa and so on are nowhere near close to IPL. Do these countries have a mass following like India? and numerous investors? don't think so so that's why they're nowhere near close to IPL but the Cricket is the same. As long as it helps the board financially then we can't argue.

  • indicricket on November 22, 2012, 7:08 GMT

    @Smith Robertson. I will say it again, 20 overs Cricket does not turn me on one bit. I don't want it to upset the normal Cricket calendar. But I know you do not like it, not because it upsets the Cricket calendar, you do not like it because it is an Indian league. If it were an English or an OZ league you would be singing a different tune. I like it precisely because the likes of you don't like it.

  • kk777 on November 22, 2012, 5:06 GMT

    @Smith Robertson: Just for the record, me and atleast 100 of my friends do not live in a city(or even a state) attached to any IPL team and we are very much polarised to one or other teams. So, don't worry about us. Although the same cannot be said about International fans, but the fact that you commented twice on an article related to IPL, shows that you care too...positively or negatively...better yet, out of enthusiasm or Jealousy...that is a different story altogether.

  • Sakthiivel on November 22, 2012, 4:45 GMT

    That's how BCCI works. Get bigger and better day by day.

  • brusselslion on November 22, 2012, 1:33 GMT

    Much as I would prefer to see the IPL reduced to 3 weeks duration, I fear that it will end up going the other way and it will be extended. No doubt before too much longer, it will comprise of 2 divisions with promotion/ relegation play-offs, etc. Couple this with the Champions League (or whatever it's called) and we'll probably end up with 12 weeks or so of this hit-and-rush stuff. Cpt Meanster will eventually get his wish and Test cricket will fade away along with players such as Cook, Dravid, etc. Players who like to craft an innings rather than biff a quick 20 or 30.

  • on November 21, 2012, 19:06 GMT

    My point is that IPL or T20 has caused postponements of tests for example the SRI-SA series and that could've been moved to August but then you have the SLPL you need to see the bigger picture on why this is a problem for International teams and fans where honestly most do not even care. 9 IPL teams but what about all the other cities in India? :D

  • Cpt.Meanster on November 21, 2012, 16:45 GMT

    The IPL is growing STRONGER with each passing year. This shows the might of the BCCI. No other league even comes close. The fact many non-Indian 'haters' show up here to comment on the IPL proves that the league is indeed followed outside India as well. Of course those people will deny it but I know better.

  • on November 21, 2012, 16:17 GMT

    @Smith Robertson: Nobody is compel to play IPL over test cricket. Players are free to chose. And anyways you people saying these things about IPL because it is an Indian league and most successful one over number of such leagues are going on over the globe .

  • SuperKing.Cobra on November 21, 2012, 15:46 GMT

    @EnglishCricket Indian football fans watch only EPL. If you like whether cricket or football and it is nice product irrespective of players or countries true sports fan with time will watch it. If IPL change their commentry a bit and market a bit more it is a good watch

  • sweetspot on November 21, 2012, 15:20 GMT

    Fabulous news! It is a small amount of money to be the title sponsor of a six week event that reaches such a large population, so PepsiCo is getting a very good deal. As a media property IPL is by far the biggest in the game, with or without a title sponsor. The only way is forward, it definitely looks like.

  • on November 21, 2012, 15:01 GMT

    Quite honestly I don't get why a lot of Indian supporters are hyped up about IPL yes its successful but really fans who are not Indian like me do not really care whether its successful or not. I just hope it doesn't continue to disrupt International Cricket especially Test Cricket.

  • QingdaoXI on November 21, 2012, 14:56 GMT

    To get more success, IPL should have 12 teams, each from, Delhi, Hyderabad, Mumbai, Pune, Chennai, Kolkatta, Punjab, Rajasthan, Bangalore +new teams from Ahemdabad, Kanpur (or Ghaziabad) and Indore. All teams should be divided into 2 groups and play only once with each other. In each team there should be 6 Indians + 5 Internationals. Than after first round quarter final, Semi final and final. In this way we will have 30 matches in each group stages plus 7 knock-out matches and the tournament can be down and dusted in 3 weeks and by doing this will bring more flavour than the present format, more number of matches is killing cricket because of over dose of cricket and if we bring this format it will be more enjoyable and will save more time for international schedule and will give sufficent rest for players. Same format should be for CL-t20, 2 teams each from India, Australia, South Africa, and 1 each from New Zealand, England, Pakistan, Sri Lanka, Bangladesh, West Indies.

  • cricwick on November 21, 2012, 14:18 GMT

    A punch for all those who were saying that IPL has started fizzling.400 crores,that's huge.IPL would become one of the richest leagues in the world by 2020 provided that it manages to survive till then

  • Tamimfan on November 21, 2012, 13:38 GMT

    @EnglishCricket... Weren't you the same guy who called pragyan ojha "talentless" a few months ago? Ojha picked up 9 wickets in the first test against england while shakib got only two against windies :D

  • AJ_Tiger86 on November 21, 2012, 13:34 GMT

    Great news! We need more IPL matches please! IPL season should be 9 months long like the Premier League football season.

  • on November 21, 2012, 13:27 GMT

    Mmm what's in it for the fans? Nothing. Atleast if no scandals are part of these and sport is clean, that should be OK. I as a kid cried when India kept losing to Pakistan at Sharjah. Now we know why...Hope IPL is clean.

  • on November 21, 2012, 13:21 GMT

    does any1 really care? even i was a big fan of IPL for first couple of years... now its getting boring.. hope IPL is played every 2 yrs

  • Arrow011 on November 21, 2012, 12:50 GMT

    IPL is something I just want to avoid seeing, I tried missing every year but was still watching when some matches turned out to be nail biters, these things bring the intrest back but then I still skipped most matches, even this year I will not be watching. Cricket for me is ODI & Test cricket only.

  • MJtheKing on November 21, 2012, 12:42 GMT

    Get ready for the Pepsi Max slogan for a six

  • The_Ashes on November 21, 2012, 12:33 GMT

    @Raj.Patel:- I though "dot balls" are the best appropriate term in T20s instead of maidens?

  • Raj.Patel on November 21, 2012, 12:13 GMT

    So, I suppose maiden overs will now be called Diet Pepsi Minimums.

  • on November 21, 2012, 12:11 GMT

    So, I suppose maiden overs will now be called Diet Pepsi Minimums.

  • dilanz51 on November 21, 2012, 11:59 GMT

    i really hope they would change the rules. I really want to see more than 4 foreign players in the starting 11.

  • EnglishCricket on November 21, 2012, 11:37 GMT

    I don't understand why Indian fans are excited by these kind of things relating to IPL I mean its not like you're earning that kind of money :P :)

  • kk777 on November 21, 2012, 10:55 GMT

    hehehehe... take that all you IPL haters... I am not a big fan of IPL myself but accept the fact that it is the biggest and richest cricketing event in the history... and getting only bigger and richer

  • TNAmarkFromIndia on November 21, 2012, 10:50 GMT

    Has a nice ring to it. What would have a nicer ring to it is "Pepsi Premier League". They could downplay the "Indian" part as most people know it's an international league for the most part.

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  • TNAmarkFromIndia on November 21, 2012, 10:50 GMT

    Has a nice ring to it. What would have a nicer ring to it is "Pepsi Premier League". They could downplay the "Indian" part as most people know it's an international league for the most part.

  • kk777 on November 21, 2012, 10:55 GMT

    hehehehe... take that all you IPL haters... I am not a big fan of IPL myself but accept the fact that it is the biggest and richest cricketing event in the history... and getting only bigger and richer

  • EnglishCricket on November 21, 2012, 11:37 GMT

    I don't understand why Indian fans are excited by these kind of things relating to IPL I mean its not like you're earning that kind of money :P :)

  • dilanz51 on November 21, 2012, 11:59 GMT

    i really hope they would change the rules. I really want to see more than 4 foreign players in the starting 11.

  • on November 21, 2012, 12:11 GMT

    So, I suppose maiden overs will now be called Diet Pepsi Minimums.

  • Raj.Patel on November 21, 2012, 12:13 GMT

    So, I suppose maiden overs will now be called Diet Pepsi Minimums.

  • The_Ashes on November 21, 2012, 12:33 GMT

    @Raj.Patel:- I though "dot balls" are the best appropriate term in T20s instead of maidens?

  • MJtheKing on November 21, 2012, 12:42 GMT

    Get ready for the Pepsi Max slogan for a six

  • Arrow011 on November 21, 2012, 12:50 GMT

    IPL is something I just want to avoid seeing, I tried missing every year but was still watching when some matches turned out to be nail biters, these things bring the intrest back but then I still skipped most matches, even this year I will not be watching. Cricket for me is ODI & Test cricket only.

  • on November 21, 2012, 13:21 GMT

    does any1 really care? even i was a big fan of IPL for first couple of years... now its getting boring.. hope IPL is played every 2 yrs