Sponsors adopt a 'wait and watch' approach as BCCI struggle to restore IPL credibility

Rajiv Shukla will chair the IPL governing council meeting on Sunday, one the league’s stakeholders will be paying close attention to

The after-effects of the Lodha panel verdict on IPL are set to continue with sponsors and commercial partners of the various teams playing a waiting game with regards to their future move, ESPNcricinfo reported. The BCCI are set to hold a meeting of the IPL Governing Council at Mumbai tomorrow where discussions will be held on how to implement the report as well as chalking out plans for the future of the T20 league.

Tuesday’s IPL ruling has already got some of the stakeholders thinking with reports that title sponsors PepsiCo India will not be renewing their contract once the deal runs out after the 2017 edition. The JSW group who were interested in buying the RCB franchise have also shelved their plans post the verdict. The main sponsors of the two suspended teams, Aircel (Chennai Super Kings) and Ultratech Cements (Rajasthan Royals), are reportedly considering a move away from the cash-rich league as well.

It is understood that various other stakeholders will be having a close look at tomorrow’s meeting before taking a decision over their next course of action. Market analysts say that the sport’s governing body in India will have to take some concrete steps if they are to restore the faith of the sponsors after the most recent infamous incident surrounding the IPL.

"If I were to put a number around the reputation loss, if 100% is pure reputation, (now it) is around 60%. There is a 40% loss of reputation owing to all the controversies," Anisha Motwani, director at Max Life Insurance and an expert on brand reputation management, said. "I have a feeling they (sponsors) would want to wait for the controversy to be at least cleared," she said. "What are they buying into? They could just be buying a hot potato.”

"Even if it comes free, if it ends up burning you all the way, nobody wants a hot potato. Whatever little you save will just be completely ruined by the fact that it will cause a bigger hole in reputation and many other things," Motwani said.

The T20 league’s financial valuation has also taken a hit following its biggest controversy yet.

"I would say it has taken a beating of 10 basis points," R Ramakrishnan, director and co-founder of Baseline, a sports marketing, entertainment and licensing firm, said. "The IPL is still in its infancy compared to other global leagues. The brand is still growing and learning.”

He added however that the IPL can survive the present situation easily.

”As long as there is match-winning on-field performance and a loyal fan base, the valuation will have a steady rise. We are still eight months away from the next IPL," Ramakrishnan said.

A six-team IPL could drive away the broadcasters

Industry experts feel that it is an absolute necessity that eight teams are lined up, as a tournament with just six teams could drive away MSM India Pvt Ltd, the official broadcasters of the tournament.

"The broadcaster will be in a tight spot if the IPL takes place with six teams. Then there is certainly a revenue loss," Ramakrishnan said.

"Each 10-second slot is priced at Rs 5 lakh [approx $830,000] approximately. I am taking some ballpark figures here," Motwani added. "There are 15 matches less, which means there are roughly 35,000 seconds of advertising inventory left and if 35,000 seconds of inventory costs around Rs 5 lakh per 10 seconds, it comes to roughly Rs 180-200 crore [approx $30-33 million], a straight hit for the channel."

Rajiv Shukla has said that the BCCI intends to carry on with the eight-team format for the IPL.

"The idea is to have the tournament in the full format with a minimum of eight teams. We can't hold the event with six teams," Shukla clarified according to ESPNcricinfo.

Deccan Chargers and Kochi Tuskers have already been reported to be eyeing a comeback.

BCCI have their work cut out

”The brand of the IPL has definitely been affected. Some of the sponsors are reportedly drifting away from the IPL. It will be a more than challenging task for everyone in the BCCI to restore the faith of the market in the brand,” Ajay Shirke, an IPL governing council member said.

IPL Chairman Rajiv Shukla, however, feels the league will only get better. Speaking on Tuesday in the aftermath of the judgement, he stressed that the interests of the IPL will be safeguarded at all costs.

"Our aim is to make IPL 9 better than the previous editions. So the work is going on. Rest assured that it will be a better product. The stakeholders should not be worried at all. It has got an international value also and is watched throughout the world. IPL will survive and it will be a better product,” Shukla said.