The pandemic will likely see drastic changes in endorsement deals in sports since the finances of brands have been negatively affected.
The sports industry has been negatively affected during the pandemic. This industry thrives on hosting group and individual events throughout the year. The impact on sporting events during the pandemic has also affected the brand endorsement deals.
The 2020 summer has been hugely different from the regular Indian summers of the past. The summer saw the suspension of the Indian Premier League (IPL) due to a strict lockdown imposed in the country. Meanwhile, the events that were scheduled to take place in monsoon, such as Pro Kabaddi League and Pro Badminton League, have also been cancelled.
In the current scenario, along with the GDP of the country, the advertising industry has also taken a big hit. Big brands have been affected since these events have not taken place. Moreover, the lockdown has also affected the production of these brands. They have been forced to rethink advertising strategies and celebrity endorsement deals.
A recent report from IIHB (via livemint) revealed that the celeb endorsement market would see a 25% decrease in its total value this year. This report also insists that 65% of marketers want celebrity endorsement fees to be reduced due to the pandemic.
Indian cricket team captain Virat Kohli is the most expensive celebrity, charging ₹5-₹5.5 crores a day to endorse a wide variety of brands, such as Puma, Boost, and Manyavar ethnic clothing. The IIHB spoke to numerous marketers, and the majority of them wanted the fee of top-level athletes to come down by 25-30%.
Since the Indian Premier League is the first tournament to be conducted in the COVID era, cricketers are unlikely to see a major dip in fees as they remain in demand during the tournament. Cricketers will have upper hand over other athletes due to the popularity of the sport in the country.
Moreover, Pro Kabbadi League, Pro Badminton League, Ultimate Table-tennis Championship, Pro Boxing League, Tennis Premier League, Pro Wrestling League, and Pro Volleyball League have been called off for this year. The sports personalities of these events may find it difficult to get new deals due to lack of events, so they may even have to renegotiate terms of the pre-existing contracts.
PKL had enjoyed success since its inception six years ago. It was able to develop its niche market, so the league may not find it difficult to attract brands next year. However, the athletes participating in PKL will find less exposure throughout this year, thereby decreasing the chances of getting better brand deals.
Olympic Silver medalist and the present female Badminton world Champion PV Sindhu has also taken a hit at her endorsement deals. The Baseline agency that manages Sindhu revealed that brands are trying to renegotiate the terms of contracts due to the pandemic.
Other top athletes from different sports such as Sania Mirza, Mary Kom, Shafali Verma, Smriti Mandhana, Saina Nehwal, Sakshi Malik, Sushil Kumar, Vinesh Phogat, Sathiyan Gnanasekaran, Manika Batra will not be seen in action for a longer duration of time due to the pandemic. The lack of exposure in events may hurt the endorsement deals of these athletes.
Brands have been forced to reevaluate deals due to the pandemic. Cricketers may still find a way out in this situation, but other athletes may have to suffer the brunt until the economic situation is back on track.
By Aashish Jaju