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On-air deals for brands more fruitful than BCCI sponsorship

Despite being one of the richest and most well-known sports organizations, the brands are backing out without completing their sponsorship tenure with the BCCI.

Teaming up with the Board of Control for Cricket in India (BCCI), the richest cricket board in the world, is one of the most beneficial sponsorship pacts that provides the brand with the necessary global exposure. Over the years some of the biggest brands globally have partnered up with the Indian cricket governing body. Earlier this year, India’s largest conglomerate, Tata Group also inked an association with the BCCI to become the title sponsor of the Indian Premier League.

Despite being one of the richest and most well-known sports organizations with a global reach, the brands are backing out without completing their sponsorship tenure with the BCCI. Upstox, Unacademy and Paytm have reportedly requested the BCCI to conclude their respective partnerships.

When a brand and BCCI sign a sponsorship deal, the former has to pay a bank guarantee to the latter, it stays with the board throughout the tenure of the association. The amount of the bank guarantee is the same as the sponsorship amount. If a brand pays INR 60 crore in a partnership then an extra INR 60 crore will have to be paid by the company to the BCCI as a bank guarantee. Due to this, a hefty amount of working capital gets blocked throughout the partnership, which inevitably creates financial issues for startup companies that invest extensively in such sponsorships.

A brand that has a current deal with the BCCI also receives the provision from the board itself to sell its sponsorship rights to some other company if needed.

Paytm has also reportedly requested the BCCI to transfer its sponsorship rights to Mastercard.

On the other side, acquiring the media deals of the same event with the official TV and digital broadcaster is quite affordable and viable. The brands have to pay the amount of the inventory considered just before the commencement of their campaign during the event. The companies even receive a refund from the broadcaster if the inventory isn’t consumed. This process turns out well for brands as they get the necessary exposure through the traditional and digital mediums without their extra working capital getting blocked.

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