PepsiCo set to end IPL sponsorship two years early
PepsiCo India, the title sponsor of the IPL, is set to terminate its five-year contract with the league two years ahead of schedule. The decision, understood to be linked to the negative publicity enveloping the tournament following the 2013 corruption scandal, will be the first major setback in terms of perception for Shashank Manohar, the new BCCI president, who was elected largely because of his clean image.
It was reported that PepsiCo was considering such an exit soon after the Lodha panel announced a two-year suspension for Chennai Super Kings and Rajasthan Royals in July. While it is understood that PepsiCo has sent the termination notice to BCCI and IPL authorities, it's statement to ESPNcricinfo was carefully worded. "BCCI and PepsiCo have had a longstanding cordial relationship and have been in discussions to work out a solution which addresses PepsiCo's concerns. Both parties will share it when ready," the statement said.
The BCCI, for its part, issued a similar statement as well on Friday. "BCCI and Pepsico have had a long-standing cordial relationship. Pepsico has raised certain concerns with the BCCI," the statement said. "BCCI has assured that steps will be taken to address the concerns and will work necessary solutions in the interests of the league as well as Pepsico. As part of the process BCCI and Pepsico have been in amicable discussions and further update will be shared in due course."
IPL chairman Rajiv Shukla confirmed that the BCCI would not enter into any legal dispute with PepsiCo, which had signed a deal worth Rs 396 crore in 2012. "They have been a very good partner all this while and we do not want to disturb our relationship with them. Whatever is going to happen is going to happen in a very smooth manner," Shukla told PTI.
A settlement with Pepsi is likely to be rubber stamped in the BCCI working committee meeting in Mumbai on October 18.
Shukla tried to downplay the issue by stating the BCCI has already started the hunt for PepsiCo's replacement. "We are in talks with other sponsors as well, so the title deal with Pepsi is not that big an issue. They have certain points and we are going to settle them amicably in the next meeting," he said.
It remains to be seen if the IPL, in its most tumultuous phase, attracts a new sponsor that could match the price that was being paid by PepsiCo. For now, even the number of teams that will participate in IPL 2016 is uncertain, with Super Kings having challenged their suspension in the court, and the BCCI still having the power to exercise its right to terminate the franchise agreement of both Super Kings and Royals.
PepsiCo will be the second corporate house to end its association with IPL as a title sponsors. DLF India did not renew its association after the expiry of its five-season deal following the first five editions of the league.