Vivo pays 267% premium over the base price to retain IPL rights, to shell out Rs 2,199 crore over 5 years
At Rs 440 crore per season, that's almost four times the base price of Rs 120 crore set by the Board of Control for Cricket in India, making Vivo's commitment the biggest sponsorship deal in the history of any sport in India, beating the previous record of Oppo's Rs 1,079-crore payout for Team India's jersey rights, which it bought earlier this year.
"This number doesn't surprise me," said Jatin Paranjape, former cricketer and founder of sports coaches aggregator KheloMore. "Looking at it through every lens — from getting your brand out there when the youngest population in the world is watching its favourite sport to the bundling of on-ground and on-air presence, and also mobiles being the fastest-moving product in the ever-growing ecommerce consumer universe — it makes complete sense to Vivo."
Paranjape, who's headed sports marketing for cricket in India for Nike, said a title sponsorship winner needn't make an extra promotional effort since the brand is embedded in the tournament name — Vivo IPL.
Oppo, which trumped Vivo in securing Indian cricket team's jersey rights earlier this year, was the second highest bidder at Rs 1,430 crore.
Incidentally, Vivo and Oppo are owned by the same parent company, BBK Electronics, which also owns OnePlus.
ET first reported on June 22 that BCCI had set Rs 120 crore per year as the base price and handset makers such as Vivo, Oppo, Xiaomi and Intex had picked up the tender document. Only Vivo and Oppo submitted bids.
The tender process ensures the best price discovery and Vivo’s bid reinforces the fact that IPL is one of the most premium properties in the world, said BCCI CEO Rahul Johri.
"The fact that Vivo was the existing title sponsor and for them to retain the rights at such multiple shows the value they see in the property," Johri said.
Some experts wondered whether the bid would make economic sense.
"It's staggering, especially considering the base price. They are going hell for leather in cricketing terms," said Ramakrishnan R, director at sports marketing firm Baseline Ventures. "It seems Vivo wants to ensure that every one in three Indians is using their handset. Their whole strategy is built around tier-II and III cities and this is the largest platform for the company."
Apart from IPL, Vivo has also picked up the Pro Kabaddi League’s title sponsorship rights for five years for Rs 300 crore.
BCCI had sought bids for title sponsorship rights for five seasons, from 2018 to 2022, after Vivo's existing two-year term ended with the 2017 edition of the cash-rich league. BCCI initiated the process of inviting bids on May 31when it began selling tender documents for Rs 3 lakh.
Beverage maker PepsiCo had won the 2013-17 rights for Rs 396.8 crore, about Rs 79.4 crore per year.
However, after paying Rs 206 crore for first three years, the beverage maker decided to end its association after IPL was caught up in the spot-fixing controversy.
Chinese handset manufacturer Vivo came on board for the remaining two years of the contract, paying Rs 190 crore to become the title sponsor.
DLF, the first IPL title sponsor, paid Rs 200 crore for 2008-12, or Rs 40 crore per year.