New front shirt sponsor for Delhi Capitals as Franchises feel the pinch

Indian Premier League (IPL) franchise Delhi Capitals has decided to sign up with promoter company JSW Group as their front shirt partners. The Delhi based IPL team lost their long term principal sponsor DAIKIN for the 13th edition of the IPL.

The JSW group, which is the 50% owner of the Delhi franchise will now be the principal partner of Delhi Capitals. Promoter Parth Jindal, who oversees the JSW group’s paints and cement business and is also part of the steel operations has agreed to be the new principal sponsor for the franchise.

“JSW got a slight discount over what Daikin was paying because of no ticket sales, no meet and greet. But we’ll be showcasing our steel, cement and paints brands during IPL and we will be advertising also on Star and Hotstar,” Jindal declared to Live Mint.

Daikin was reportedly paying Rs 6-17Crore ($2.13m - $2.27m) per annum as a principal sponsor of the Delhi team. Once Daikin decided to pull out of the IPL, the Delhi based franchise did not get any offer which could match their expectations. That is the reason promoter group company decided to rescue the Delhi franchise.

Jindal, chairman of the Delhi Capitals IPL team, has admitted that almost all teams are seeing drop in value of sponsorship for the franchisees due to prevailing circumstances. Deliverables like ‘meet and greet’ with the players and match tickets are now not available to the sponsors and that is the reason most of the IPL franchises are renegotiating deals at this stage.

“Circumstances are such that some drop in sponsorship values for the teams are imminent, we have to live with it”, said Jindal.

IPL Franchises will lose out in several ways:

• Loss of gate revenues as no fans are likely to be allowed. Each franchise collects in a range of Rs22-28 Cr ($2.93m - $3.73m) from the gate revenues.
• The failing economy and uncertainty around IPL 2020. Franchises will lose minimum 15-20% of the total values of the team sponsorships. Each franchise earns in a range of Rs50-75 Cr ($6.67m - $10m) from the team sponsorships with exceptions like Mumbai Indians who has claimed recently that they have crossed the milestone of Rs100Cr ($13.33m).
• As Dream11 has assumed title sponsorship at 51% of predecessor VIVO’s value, this will directly impact the franchises income - 60% of the total central sponsorship pool gets distributed among the 8 franchises.

It is estimated that each franchise from the 3 components will lose in the region of Rs 70-75 Cr ($9.33m - $10m) in revenue.

On top of these losses in income, franchises will have the extra expense of locating to the UAE, creating a bio-bubble for the team, arranging practice facilities for the team in UAE and on the other requirements.

John Stephenson

john@cricketinvestor.co.uk

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