Brand endorsement fees of M.I.B set to skyrocket
Apr 03 2011 , New Delhi
Dhoni’s men may become expensive proposition for custodians
From all accounts, the Men in Blue are set to double their endorsement charges. The increase could be anything from 70 to 100 per cent, said agencies handing endorsement deals for Indian cricketers. Brand custodians regard this with some circumspection, given that their budgets for getting star cricketers on board will skyrocket.
As captain of the winning team credited with crafting the stupendous performance in the final, M S Dhoni is clearly right at the top in the endorsement space. “It’s Dhoni all the way and no one else. What people will remember is what happened on the final day. He will go down as the wonder boy who took India to the No. 1 position in tests and ODIs, as also T20 cricket in 2007. This will definitely be reflected in his brand value,” said brand consultant Harish Bijoor.
According to Dhoni’s agency, Mindscape Maestros, he is likely to charge Rs 14 crore for three days (i.e. the number of days he will be available for a particular brand for creating promos) a year from now on. So far he has been charging Rs 2 crore a day, whereby each brand would use him for three days a year paying him Rs 6 crore to Rs 7 crore.
Although Sachin Tendulkar couldn’t complete his 100th century in the just concluded tournament, he did mange to fulfil his dream of winning the only silverware missing from his vast collection in what was surely the last World Cup for the most successful batsman ever. “For someone like Sachin, his brand value is only going to increase once he retires. He will be seen as the real god of cricket once he retires,” said Indranil Das Blah of Kwan Entertainment and a veteran in sports marketing.
According to industry estimates, Tendulkar’s endorsement rate, which now stands at around Rs 4 croe to Rs 5 crore per deal, is likely to double. According to Jehil Thakkar, KPMG executive director of media & entertainment, after Dhoni and Tendulkar, it’s brand Yuvraj Singh and Gautam Gambhir who will hog the limelight for sometime now, thanks to their marvellous performances during the World Cup. “This was a comeback for Yuvraj after a lean period both in cricket and brand endorsements. Also, the impact on Gambhir’s performance on the final day will occupy the mind space for a long time. As a result, we will see more brands looking at associating with them.”
Singh, who earlier used to charge Rs 2 croe to Rs 3 crore per endorsement, upped his price by 25-30 per cent in the run-up to the World Cup. Following the euphoria of the victory, his fee may go further up, said his agency, Cornerstone. Similarly, Gambhir, priced at Rs 60 lakh to Rs 70 lakh, is expected to double his fees.
For O&M’s executive chairman and creative director, South Asia, Piyush Pandey, it’s not individual performances but team performance that will stay in the minds of people for a long time, and the brand value of the entire team is likely to go up shaprly. “Dhoni’s fantastic form in the final, the wonderful bowling skills shown by Zaheer Khan throughout the tournament, the great anchor knocks by Viraat Kohli, Suresh Raina’s fielding like a man possessed — all these will stay fresh in people’s minds for long. It’s the entire team whose brand value will increase manifold,” Pandey said.
Industry estimates say, Kohli charges Rs 50 lakh, Raina Rs 30 lakh to Rs 40 lakh and Virender Sehwag Rs 1.5 crore to Rs 2.25 crore per endorsement, which is likely to rise substantially now. However, things might be little different for bowlers like Zaheer Khan and Harbhajan Singh (priced at Rs 50 lakh each). They may not be able to double their charges like their teammates, given the lower demand for bowlers in endorsements, pointed out Das Blah of Kwan. Brand custodians are seeing this increase in fees as a potential deterrent for many brands to associate with the game. “If we look back into the past, in the film business all over the world, whenever the stars have become far too expensive, the entire system has collapsed. The brand value of the Indian cricket team will definitely go up after this win and more money will come in. But, given the fact that there is already so much money coming into cricket, they need to move at a sustainable speed,” observed Santosh Desai, CEO, Future Brands.
Desai said that if the cost of entry became very high, only a few companies would be able to afford such high fees. “This, in the long run, will have multifarious effects and may even increase the asymmetry between India and the rest of the world and create fissures within the cricketing fraternity itself,” he cautioned.
Thakkar of KPMG said that given the surge in demand for cricketers, many brands may have second thoughts about taking cricketers on board. “For the next couple of years there will be an overwhelming demand for cricketers. However, smart brands will take a hard look to see if cricket-related brand building is actually paying off or the brand’s message is getting lost somewhere in between.” But for now, the world is at the feet of the Indian cricketers. They know they are worth their weight in gold.