Star wins this war
Dec 13 2013
Pipping Sahara to the post, Star India becomes the virtual owner of Indian cricket for the next four years
According to the market, Star India picked up the sponsorship deal virtually for a song, at approximately Rs 1.9 crore per match for the bilateral series and almost one-third less (about Rs 85 lakh) per match for ICC-sponsored tournaments. The new contract also helped end a 12-year-long partnership between the BCCI and Sahara India, whose logo Team India will continue to sport until December 31 this year.
Along with international cricket, Star India also remains the title sponsor for BCCI’s domestic schedule till March 31, 2014. In addition to the broadcast rights, for which it is estimated to be paying in the region of Rs 4,600 crore, it has walked away with the internet and mobile rights to all Indian cricket until March 2018. As part of the overall package, Star India has also won the right to call itself the official team sponsor, and to display its logos on the men’s, women’s, Under-19 and A teams’ gear.
In all, seven contenders entered the race for the sponsorship that was decided earlier this week. Of the seven who purchased the invitation to tender documents, only two bids came through — those of Star India and the existing sponsors in the form of Sahara India Financial Corporation.
Star India thus becomes the virtual owner of Indian cricket for the next four years, and given the combo nature of the agreement, its presence will be overwhelming as all pictures generated around cricket in India will bear its logo. It is also apparent that given the umbrella understanding just why Sahara lost out on what is the most high profile partnership in Indian sport.
Initially, Sahara had resolved against continuing with the BCCI after their Indian Premier League team, the Pune Warriors, were ejected from the cash-rich tournament over financial issues, mainly the size of the annual membership fee. The matter went into the courts before the Warriors franchise was terminated, but in a surprise late change of heart, the Lucknow-based outfit opted to stay in the race for the Team India sponsorship.
According to information, the Sahara bid was the higher of the two surviving documents, pegging bilateral series matches at Rs 2.35 crore and ICC events at just under a crore each, However, given the acrimony over the IPL battle and the ill-tempered run-up to the decision that has now dragged on for quite a while, Sahara found their offer rejected on “technical” grounds.
“This dispute has been happening from May. So why did they continue to take money from us under the existing sponsorship rights, which we hold till December 31. They raised the technical issue just because they wanted to disqualify us,” Sahara head of communications Abhijit Sarkar was quoted as saying. “We picked up the bid documents but they did not tell us in advance that they were not going to consider us. They have cited the dispute we have with them over termination of our franchise of the Pune Warriors IPL team. If that was the case, they should not have taken money from us for the sponsorship from June to December,” he added.
For the BCCI, where it may have lost on the team sponsorship front, there were definite gains in terms of the earnings that the sale of broadcast rights will bring in. For Star India, it is a chance to leverage India’s most popular entertainment medium across its entire bouquet of channels, not just those confined to sports alone. Their chief operating officer, Sanjay Gupta, was quoted as saying that the deal would go a long way in building the Star brand.
“We saw how the power of on-air television and sponsorship of a series could add value,” Gupta said. Using the recent, one-sided West Indies series as a template helped convince the broadcaster. “Though matches ended in three-and-a-half days, the awareness of the Star Sports channels was still 90 per cent. If you used other methods it would have taken a much longer period. So this is a very interesting way to use sporting assets to build brands,” he added.
All in all, a cosy partnership indeed, and market talk has it that Star will pump in an eye-popping Rs 17,000 crore into Indian cricket over the next five years. What they will make out of it is anybody’s guess at the moment.