Coronavirus: BCCI brace for financial blow as Nike deal reaches end

The Board of Control for Cricket in India (BCCI) is bracing itself for a financial jolt in the wake of the coronavirus pandemic. With the BCCI’s apparel deal with Nike set to end in a couple of months' time (September 2020), the board is looking at a loss of around 31 per cent on the base price of the deal.

The current contract between the BCCI and Nike was a four-year long deal which began back in 2016. It was further continuation of a 10-year jersey deal between BCCI and Nike.

The Times of India newspaper reported that Nike, before its ongoing deal, offered the BCCI ₹88 lac per match along with a separate minimum guarantee of around ₹6 crore per year for a total of approximately 220 matches over four years.

The company also offered a 15 per cent royalty and barter products worth around Rs 8-10 crore apart from the disclosed deal amount, according to the report in the newspaper.

The BCCI are now charting out a new Request for Proposal (RFP) to be brought out next week. This is where the BCCI expect to take a financial blow as RFP could see the base price for logo rights scale down by almost 31 per cent, keeping the Minimum Guarantee clause in the existing Nike deal aside.

“They could be looking at the new RFP with around Rs 61 lac as base price but there's more to it. The RFP is going to be divided into three buckets - a) The main logo sponsor with rights to sell replicas of the Team India jersey; b) Apparel partner with rights to sell fan merchandise; c) Combination of the bucket 'a' & bucket 'b',” an industry insider told TOI.

This RFP could be for a period of three years because the International Cricket Council’s (ICC) Future Tours Program (FTP) runs out in the year 2023.

BCCI might break a key ICC rule

In addition to this, the perilous Covid-19 situation all over the globe means that the BCCI might be forced to break a key ICC rule. According to ICC guidelines, the jersey sponsor must essentially be a sports kit manufacturer – which Nike is – but BCCI might be open to break this rule for the highest bidder.

“However, in this market derailed by COVID, the BCCI may cite the inability of enough contenders to bid and therefore tweak the mandatory requirement of 'kit manufacturer', thus allowing multiple players to enter the fray but keep some aesthetics in place - like, for instance, ensuring that only an apparel manufacturer's logo (not necessarily sports apparel) goes on the jersey,” a BCCI source told the TOI.

Cricketing action in the country has been at a standstill ever since the Indian cricket team's series against South Africa was suspended in March. In fact, the IPL has also been postponed indefinitely, with no clarity on when the cash-rich tournament might be held.