Court bouncer for IPL sponsors and brands

With 13 of the 19 Indian Premier League (IPL) matches moved out of Maharashtra, brands that have invested in the league are likely to press the panic button.

The Bombay High Court on Wednesday ordered that the IPL matches be moved out of Maharashtra. The Court took the view following a PIL by NGO Loksatta Movement challenging use of large quantities of water in stadiums at a time when the state was reeling under severe drought conditions.

According to industry watchers, IPL tournaments, which have high traction in terms of sponsorships and ticketing, are likely to see a dip in profits and viewership.

Finances affected According to BCCI data, IPL 2015 contributed as much as $182 million to the economy. The BCCI had argued it would not be feasible to shift the matches out of Maharashtra, and added that the Mumbai and Pune franchises are willing to contribute ₹5 crore each towards the Chief Minister’s Drought Relief Fund.

Pune team’s counsel had told the court that “shifting matches at this stage will not only affect finances, but if the home team’s game is shifted to another State, it will lose support.” Lifestyle and denim brand Spykar Lifestyle, which has a ₹20-crore sponsorship deal with Pune’s IPL team Rising Pune Supergiants, says that plans of sponsors could go haywire.

“The match has been shifted out of Maharashtra for a better cause. However, it will still disturb our plans,” said Sanjay Vakharia, COO, Spykar Lifestyles. “As sponsors, we will have to relook at our strategy as we had already initiated a lot of fan-activation in the home grounds. Revenues may be impacted and we are evaluating the situation.”

Hitesh Gossain, Founder and CEO of Onspon.com, says that the brands always bet heavily on metros and their fan following. “On both those parameters, Mumbai scores high, which reflects in the audience turnout and fan engagement. Mumbai Indians is one of the most followed teams and correspondingly has among the highest sponsorship valuations.”

Ticketing hit Gossain said shifting the IPL out of Mumbai will definitely have an impact on ticketing (value and volume). As a venue, Mumbai has big turnouts with a high ticket-value per seat (and boxes) compared with other venues. He, however, added that sponsorship revenues have already been agreed and frozen prior to the IPL initiation for most of the slots, hence these may not be affected.

Usha International, the official partner for Mumbai Indians, says the move may not impact it.