Come On, Bulava Aaya Hai’ goes SET Max’s marketing slogan for the IPL. SET Max, owned by Multi Screen Media (MSM), is the official broadcaster of the tournament. Although it has been going all out to rope them in, the response from advertisers and sponsors has been tepid this season. This, with the tournament due to begin tomorrow.

Big corporate houses such as the Godrej Group, Panasonic and Samsung have ditched the event this season. Television advertising revenues had escalated to nearly ₹800 crore last season. But most media planners see that contracting to ₹500 crore this year. As T Gangadhar, MD of media agency MEC, says: “Companies are taking boardroom decisions to skip the tournament due to the weak business sentiment.’’ MEC has seen its clients, such as LG and Citibank, withdraw from the tournament in the past couple of seasons.

Navin Khemka, Managing Partner, Zenith Optimedia, said: “We are having a tough time convincing clients to invest in the IPL this season. None of our advertisers last season, such as Nestle, Honda, Jabong.com or OLX.in are planning to renew their ties with IPL. This time it is not about the ad rates but uncertain mindset of clients towards the property that is making them hold on to their budgets.’’

It’s not hard to see why this is happening. Weak business sentiment coupled with the spot fixing and betting controversies have taken a toll. Shifting the venue to the UAE for the initial matches due to the overlap with the elections may also hit revenues. And this is working in the favour of advertisers and sponsors, who are pushing for better deals.

Shailendra Singh, Joint MD, Percept says: “IPL as a brand is seriously injured and lacks a financial model. One can value a commodity only it is listed or traded. This season it a 50 per cent discounted product, giving sponsors, broadcasters and advertisers a chance to re-negotiate and get better deals.’’

While the IPL has broadcast sponsors such as Pepsico (also the title sponsor), Vodafone, Amazon, Havells, Amul and Parle Agro, erstwhile sponsors such as Idea and Samsung are lukewarm.

“The IPL is now an old story for us. It happened in the past and we cannot offer any good reason why we backed out of it,’’ says Ravinder Zutshi, Deputy Managing Director, Samsung India Electronics. Samsung Mobiles was an on-air associate sponsor last year. Idea Cellular would rather buy airtime than invest heavily in the property.

Even the number of matches has gone down from 74 to 60 (with Sahara Pune Warriors terminated) and this has forced the official broadcaster to raise rates. “Spot rates (10 seconds) are currently between ₹4.75 lakh to ₹5 lakh this season,’’ says Rohit Gupta, President, Network Sales, MSM. The recent cap on advertising time by TRAI (12 minutes in an 1 hour) is also taking its toll on the ad inventory.

All this is a matter of concern for the BCCI and the IPL franchises. Like most major leagues, the IPL provides financial support to its franchises for survival. MSM pays the BCCI $100 million annually. A majority of this revenue (almost 60 per cent) goes to the teams. If ad revenues drop, the BCCI would see its earnings come down and also be forced to cut the TV rights payout to the teams, leading to a further drop in their earnings.

Set Max expects things to pick up once the Indian leg begins. “Unlike when it went to South Africa, it is coming back after the first 20 matches, adding an element of novelty, and that should not affect viewership,’’ says Neeraj Vyas, Executive Vice-President, SET Max.

Sponsors fading Sponsorship deals involve bigger budgets (nothing short of ₹25 crore) but the business environment is not exactly conductive for companies.

Sponsorships for popular teams such as Mumbai Indians are looking up with Etihad and Jet Airways signing them on. However, Rajasthan Royals, which was enmeshed in last year’s scandals, may find it difficult with erstwhile sponsors HDFC Life Insurance and Kent RO water purifiers backing out this season. “We are buying airtime but not sponsoring Rajasthan Royals this season. Apart from the controversies, since the IPL is moving out, we will not be able to take full advantage of the sponsorship,’’ said Mahesh Gupta, Founder & CEO, Kent RO Systems.

This year MSM has nine presenting and associate sponsors with Vodafone, Karbonn Mobile and Havells continuing sponsorship. Presenting sponsors usually get airtime of 200 seconds and pay upwards of ₹50 crore while the amount is less for associate sponsors at ₹25 crore for 100 seconds of airtime. E-commerce companies Amazon, Flipkart and Go Daddy are some of the new advertisers.

On-ground sales Revenues from on-ground sales are also dwindling, with the tournament shifting to the UAE for the initial matches. Corporates are getting to advertise on the jersey and trousers of IPL players for rates as low as ₹1 crore, with almost 90 per cent of the inventory up for grabs till recently.

“Generally, on-ground deals vary between ₹12 to ₹14 crore,’’ says Vinit Karnik, National Director, Sports & Live Events, Group M. “We had nearly 90 per cent inventory still open. While advertisers are trickling in, on-ground deals have dipped to ₹1 crore, which is too low and has never happened in the past.”

However, the low rates are making on-ground promotions attractive for advertisers. “Compared to last year, when on-ground sponsorships were not available, this year there is more availability, leading to rates coming down,’’ says Alok Dubey, COO, Arvind Brands.

The company has lined up its premium brands Ed Hardy (trousers for Royal Challengers Bangalore) and US Polo (Kolkata Knight Riders jersey) to gain visibility.

Weak merchandising and ticketing Even merchandising and ticketing revenues of franchises may be affected. Kyazoonga.com, which broke records in ticketing sales for Delhi Daredevils last season, selling nearly ₹10 crore worth of tickets for a single game, is not expecting to repeat that feat. “We have just started ticket alerts for Kings X1 Punjab and are also planning to sell merchandise for all the teams,” says Neetu Bhatia, Co-founder & CEO of Kyazoonga. “But since a part of the tournament will not be here, and with fewer games, absolute value growth in revenues may be flat.’’

IPL franchise owners, fearing a drop in ticket and merchandise sales, have already approached the BCCI to compensate them. “The governing body of the BCCI is in talks with the team owners for compensation. There should not be a problem,” says Ratnakar Shetty, Administrator, BCCI.

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