India news December 9, 2013

Star wins Indian team sponsorship rights

Star India, the television network, has bagged the Indian team sponsorship rights for a four-year period, starting January 1, 2014, and ending March 31, 2017. ESPNcricinfo understands Star's bid was worth Rs 19.2 million (US$315,000 approx) per match for bilateral series and Rs 6.1 million (US$100,000 approx) per match for ICC sponsored tournaments. This brings to an end a 12-year partnership with Sahara, the existing team sponsor, whose contract expires on December 31.

Star is also the title sponsor for BCCI's international and domestic matches till March 31, 2014, and holds the broadcast, internet and mobile rights to Indian cricket until March 2018.

The team sponsorship rights include the right to be called the official team sponsor, and to display a commercial logo on the men's, women's, Under-19 and A teams' kits.

The deadline to submit the bids ended at 3pm on Monday, after which the BCCI's marketing committee evaluated the various offers submitted. Of the seven companies that purchased the invitation to tender documents, only two bids were shortlisted eventually: Star and Sahara India Financial Corporation.

Sahara had initially decided to not renew its contract with the BCCI, the main reason being that it has been locked in bitter legal dispute with the BCCI, primarily concerning the Pune Warriors IPL franchise. Sahara, which owns Warriors, had been asking the BCCI to reduce the annual ownership fee and the matter entered the courts, which asked for it to be resolved through arbitration. Eventually, in October this year, the BCCI terminated the franchise.

But, interestingly, as the deadline for the bid approached, Sahara decided to compete for the sponsorship rights; it bought the tender document on the eve of the deadline for submission. It also put in a higher offer than Star: Sahara bid Rs 20.3 million per match for bilateral games and Rs 9.1 million per match for ICC tournaments. However, its bid was rejected on technical grounds.

"Two bidders - Star India Pvt Ltd and Sahara India Financial Corporation - were in the fray. Sahara's bid was found to be ineligible," a BCCI release stated, without going into details.

Reacting to the development, Sahara expressed disappointment at the treatment handed out to it and even questioned BCCI's motive. "This [legal] dispute has been happening from May. So why did they [the BCCI] continue to take money from us under the existing sponsorship rights, which we hold till December 31. They raised the technical issue just because they wanted to disqualify us," Abhijit Sarkar, a Sahara spokesperson, told ESPNcricinfo.

According to Sarkar, Sahara officials were asked to sit out as the board's lawyer explained to the marketing committee why the company was not eligible and its various legal wrangles with the BCCI. "If they had an objection, they should have told us when we were picking up the tender," Sarkar said. "Even after us having done that, they could have told us your bid would not be considered since there is a legal dispute going on."

Sanjay Gupta, Star India's chief operating officer, said that the thought behind buying the Indian team's logo sponsorship rights was to mainly build the Star brand. According to Gupta, Star's recent experience where it was title sponsor for the home series against West Indies combined with its role as the host broadcaster was positive, and played a huge role in the company deciding to bid for the team sponsorship rights. "We saw the power of how on-air television and sponsorship of a series could add value [to the Star brand]," Gupta said.

According to Gupta, sporting assets have not been used effectively by companies in building brands effectively. Recently, on November 6, Star India rebranded its six sports channels. The date was specifically picked, Gupta pointed out, so that it would coincide with the start of the first Test of the West Indies series. "Though the match ended in three-and-a-half days, the awareness of the Star Sports refresh [new channels] was still 90%," he said. "If you used other methods - TV communication and other media venues - it would have taken a much longer period. So this is a very interesting way to use sporting assets to build brands."

Nagraj Gollapudi is an assistant editor at ESPNcricinfo

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