In a late development last night, the Indian Premier League (IPL) Governing Council has called for emergency meeting with all the 8 franchises today evening via-teleconference. The IPL GC meeting with the franchises was earlier proposed to schedule after the government clearances. But in the wake of pull out of VIVO as title sponsor of IPL 2020, the IPL GC has called for the emergency meeting today evening.
As reported by InsideSport today morning, some of the franchises are in a little panic mode at this stage. Some of them have even decided to put the bookings of accommodation and other requirements on hold as the news of VIVO pulling out of IPL trickled in yesterday.
Not only this, one of the IPL franchise has also raised point of compensations for the teams in lieu of no gate sales.
BCCI has now decided to discuss the matter with the franchises today via teleconference.
“VIVO pullout is a big-big setback. This may lead to the Chinese brands staying away from the franchise sponsorships and as well as on-air advertising. We have not been communicated about anything from the BCCI. We are putting our bookings on hold for now. There are too many problems with IPL now”, said one of the franchise official
“We understand situation is very tough at this stage and BCCI is trying its best but why they want to hide things from us. We too are stakeholders of the IPL, we too require proper communication. Till date, BCCI has not even communicated with us on any logistics or have given SOP’s to us. This season seems to be jinxed”, said franchise official down South.
IPL 2020 : Franchises also concerned about the triple whammy from VIVO fallout, team sponsors and no gate revenues
Franchises are already reeling under huge pain from the Covid19 hit IPL 2020 and now with VIVO pull out it will be a triple whammy for the IPL franchises.
Hit 1 – Franchises are almost sure to lose Gate Revenues from the IPL 2020 as no fans are likely to be allowed for the IPL 2020. Each franchise collects in a range of 22-28 Cr from the Gate Revenues, but that will completely get wiped out.
Hit 2 – Due to falling economy and uncertainty around IPL 2020, franchises will lose minimum 15-20% of the total values of team sponsorships. Some are already staring at huge loses on this account. Each franchise earns in a range of 50-75 Cr on this account with exceptions like Mumbai Indians who has claimed recently that they have crossed the milestone of 100Cr from the team sponsorship component.
Hit 3 – Now with VIVO pulling out, franchises will lose further. 50% of the total Central Pool gets distributed among the franchises. VIVO sponsorship worth 440 Cr is also part of the Central Pool. This means 220 Cr (50% share of total values) of VIVO sponsorship gets distributed among the 8 franchises. Each franchise will lose 28 Cr on the account of VIVO pullout. Even if BCCI gets someone at 50-60% of values of VIVO as Title Sponsor, franchises will still lose on this account.
According to the InsideSport’s estimate, each franchise from the 3 components will lose in a range of 70-75 Cr.
Not only this, franchises will have to take hit from another account, that is the escalation in the costs. The IPL 2020 bandwagon has to move to UAE, which means extra expense on the franchises head. In comparison to IPL in India, franchises will end up spending more on logistics (travel – accommodation), creating bio-bubble for the team, arranging practice facilities for the team in UAE and on other requirements.
Loses from the existing revenue streams and extra expense heads will lead to each franchise losing 80-85 Cr from this year of IPL 2020.
It’s an understatement to say BCCI will find it difficult to get a replacement of VIVO around the same value. According to the industry estimates the values can fall below as much as 50-55% of the previous values.