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Chennai Super Kings has bagged two new sponsors, Nissan Motors and VGN, at a premium over last year. Ironically, the IPL team says its aim is to reduce dependence on sponsorships and increase revenue from other sources.
Nissan and VGN (a local real estate developer) come on board as principal sponsors – they get logo space on the player’s jersey. CSK, meanwhile, continues its relationship with Pepsi, Reebok, Usha, Aircel and Gulf Oil. Amrapali has dropped out.
CSK’s sponsorship cut-off is considered more expensive than other IPL teams. Each year, the rates go up incrementally for both old and new sponsors.
“Sponsorship is our biggest contributor to revenue at 36 per cent. We would like it to go down to 32 per cent so that we are not under the pressure of sponsorships alone,” Chandrabhan Tiwari, General Manager - Marketing, India Cements, which owns CSK, told Business Line .
Marketing spend
Sponsorships also drive the team’s marketing spend, which is expected to grow 17 per cent this year to touch Rs 40 crore.
Other sources of revenue include TV rights, ticket sales and merchandising. (During IPL-4, CSK’s total revenue was Rs 144 crore. IPL-5 numbers are yet to come.)
Merchandise sales
Last year, CSK’s merchandise (apparel, caps and accessories) sales were Rs 8 crore. Of this, only the bottom-line goes to the team, after franchisees split their share. This year, the target is Rs 12 crore.
CSK merchandise was sold in over 400 outlets across Tamil Nadu, including a store at the Chennai airport. This year, CSK is targeting 600 stores, including outside the State. CSK is also planning an exclusive store at a Chennai mall.
The team has tied up with Switcher, a European fashion brand owned by Tirupur-based PGC Corp, for merchandise.
It is also betting on sale of cricket kits which will be launched during IPL-6. The kits will be sold through sports goods, gift shops and Tamil Nadu Cricket Association training academies in the State.
Other activation such as the ongoing Corporate Cup (a tournament featuring five sports - cricket, chess, snooker, badminton and tennis) also brings in some revenue. “We will introduce an invitation-only golf tourney next year as part of the Corporate Cup,” says Tiwari.
With less than a month to go for IPL-6, CSK is looking to engage fans through social media contests and videos made by students of IIT-Madras, IIM-Kozhikode and individual fans globally. In the long term, CSK is planning health cafés.
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