Prudence takes precedence for IPL 2024

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Last week, as the Board of Control for Cricket in India (BCCI) huddled to pick the Indian Premier League’s (IPL’s) associate sponsors for the next (three or) five years, sports marketers around the country were hawkishly glued to the outcome. A successful sale, they felt, would build considerable momentum after the IPL title rights sponsorship, in which the Tata Group outbid the Aditya Birla Group and agreed to shell out ₹2,500 crore ($300 million) for the next five years. Unsurprisingly, the BCCI (and its to-be associate sponsors) delivered. 

The cricket board sold four sponsorship slots for a cumulative amount of ₹1,485 crore, with fantasy sports company My11Circle headlining the sale. My11Circle, which counts former India captain Sourav Ganguly among its brand ambassadors, bid ₹625 crore for the associate sponsorship of the fantasy sports category until 2028. The bid was also a nearly-2x increase from the base price of ₹65 crore, a further cue that the IPL itself had significantly recovered from the previous year, when startups reeling from a brutal funding slowdown slashed their once-bloated marketing spends.

“The Tatas becoming title sponsor was a significant moment. Them coming on board and paying ₹500 crore a year was a big statement in itself. That builds great trust in brands looking to invest in the league. The My11Circle deal is a sign that there is no deflation in prices despite increased prudence among brands,” a sports industry executive tells The Playbook on a condition of anonymity. The deal also assumes significance because now, the value of the associate sponsorship has been firmly established.

The 2024 edition of the IPL has been marked as a bellwether for marketing spending—both in advertising and sponsorship, the two dominant avenues through which brands usually spend their money. This is for a variety of reasons that range from macro factors (a post-Covid consumption downturn having an impact on ad/marketing budgets) to increasing supply in the market (more sporting properties to spend money on). This, even as sports today commands nearly 16% of all advertising spends according to a 2023 report by consulting firm EY. That number, the report added, is likely to increase to 25% over the next three years. 

State of play

2024 is an unusual year in the Indian sports marketing cycle. The Women’s Premier League is sandwiched between a high-profile five-match Test series (India vs. England) and the IPL, while the T20 World Cup follows right after the IPL, besides other tournaments such as the US’ Major League Cricket. Needless to say, this has left marketers spoilt for choice, even as they zero in on the IPL for a majority of their spending.

Add to the general elections, which could have a significant impact on how companies disburse their money. “The elections will be the biggest deciding factor. The ongoing farmers’ protest is not a great start. Plus, there have been some out-of-the-blue events such as the recent crackdown on Paytm that has set jitters among corporate circles,” adds the first industry executive quoted above. Several brands have also had a busy six-month window, with the 2023 Men’s Cricket World Cup and spends going into the Ayodhya cause. 

Even then, there appears to be some room available, with several inventories—even in the IPL—available. For instance, the BCCI is yet to announce a partner for the Orange and Purple Cap holders, besides the umpire sponsor. That, according to industry estimates, could fetch ₹200-300 crore, with the IPL’s central partnership (title + associate sponsors), somewhere around ₹825 crore. This comes right after the World Cup, when brands spent over ₹3,000-3,500 crore on advertising during the tournament.

Owning a sport

This is where Shiv Burman, founder of sports consulting firm Burman Sports LLP, smells a big opportunity. “Brands need to look at owning a sport. Just the way Hero did with the Indian national football team to the Indian Super League alike. Or what Odisha is doing with hockey,” he tells The Playbook. “This would mean going beyond traditional metrics such as reach/impressions to relevance and differentiation,” he adds. 

Some of it is already happening. Dream11, for instance, swung into action immediately after losing out on the associate sponsorship of the IPL. Within a week, it signed three front-of-jersey sponsorships with IPL franchises, which helps the company cement its presence throughout the tournament without paying a premium for it. “What it has done is establish continued visibility throughout the tournament. I am sure they will 110% pull off a creative campaign during the IPL that will differentiate it,” Burman says. Not just that, Dream11, through its sponsorship of the Indian cricket team, effectively has a six-month-long campaign with the WPL, an international series, the IPL, and the T20 World Cup right after. Dream11 is also MI New York’s front-of-jersey sponsor for Major League Cricket. 

Ditto for a franchise such as the Mumbai Indians, whose sponsors have a sustained June to July cycle. For instance, electrical appliances brand Usha International, one of the team’s oldest partners, also sponsors its other teams—the WPL team, and its UAE-based MI Emirates franchise. “It's effectively the same team, just different franchises. So there is sustained visibility,” says a sports marketing executive who is aware of how IPL franchises monetise.

“But what is interesting is that brands are looking beyond advertising and considering a broader storytelling opportunity through unique activations including using players, media exposure, and shoots, among other things,” the executive adds.

Return of the OGs

The bubble, so to speak, has burst. Indian consumer internet unicorns, which hogged sports sponsorships in the Covid years between 2020 and 2022, are now relegated to the margins. A sustained funding crunch, coupled with investor pressure to streamline costs, has kept them away. Governance issues, in the case of BYJU’S, have played their part too. While it started during last year’s edition, this year has seen the return of stable, if not mature businesses.

“There is more accountability, generally speaking. Investors are asking them (startups) tough questions,” says a third senior sports marketing executive. “The market shot through the roof for cricket. They pumped the market and spoiled it. Now, they’re braced with this reality,” they add. And now, others are scrambling to fill that gap left by the startups, which the industry approximates at 10% of demand.

“Entry continues to be expensive. However, brands can take a more creative approach to campaign positioning through avenues such as player activations. But beyond that, brands are now consciously looking at fans, and how they could engage them better,” they say. “If there are two companies in the same category, differentiating the customer via value addition is the magic. And that is the paradigm shift we’re seeing with activations, beyond logos.”

An example would be UAE-based logistics company DP World’s campaign during the World Cup, where it donated 10 cricket kits for every 100 runs scored during the match. “Smart brands recognise this. How do I break the clutter? While some might choose to make great ads—the ZooZoos and the Cred ads have great recall—you’ve got to do more,” Burman concludes.

Whether they do or don’t, we’ll know in a month.

⚡️Quick Singles

⚽💉❌: Former Manchester United and current Juventus player Paul Pogba has been suspended for four years on account of failing a dope test. The result is another worry for the Serie A, which is also facing infighting between clubs to reduce the size of the teams in the league from its current 20 to 18. The idea is part of a larger debate about the rationalisation of Italian football and the need to make the game profitable for clubs across the league.

🏏📝✊🏻: BCCI is making its players toe the line, and their preferred strategy for that is a carrot-and-stick policy. The Board has ended player contracts for Shreyas Iyer and Ishan Kishan on account of indiscipline. On the carrot side of things, the Board is also considering matching the fees of Test cricket with that of the IPL. The two decisions seem to be interconnected as both Iyer and Kishan were seen to not prioritise Test cricket.

💰🎾👑: If you thought the Saudi money influx was over, think again. The country’s sovereign wealth fund has finalised a ‘multi-year strategic partnership’ with the ATP Tour, the premier tournament for men’s professional tennis. As per the partnership, the fund will sponsor Tour events in Miami, Madrid, and Beijing along with the ATP Finals. Saudi Arabia will also look to spend more on its football league, per the vice-chair of the Saudi Pro League, Saad Al Lazeez. Al Lazeez asserted the country’s desire to be a top destination for the game and underlined its vision for the league as a “long-term investment”.

🚫🎮😢: Major gaming studios laid off their staffers this week. First, it was Sony’s Playstation division that decided to trim 900 people from its workforce. Then, developer Electronic Arts announced a 5% cut to its staff and cancelled games like Star Wars. This comes after a third of game developers across the world were directly or indirectly affected by job losses in 2023.

📖 Weekend Reading

1. He Got Bored. Built an Empire. Then Cracked the Formula for the World’s Fastest Sport. [The Wall Street Journal]

2. Playing in Asia’s Champions League? It Will Cost You. [The New York Times]That’s all for this week. If you enjoyed reading The Playbook, please share it with your friends, family, and colleagues. Please also subscribe to it (for free) if you haven’t already.Subscribe nowYou can reach out to me at [email protected] with any feedback (good, bad, or ugly), tips, and ideas. I'd love to hear from you!Thanks for reading, and see you again next Friday!