With the Indian Premier League (IPL) season two moving to South Africa, a ding-dong battle is on between sponsors and team franchisees over the value of sponsorship deals.
While sponsors are looking out for long-term deals with lower fees, team franchisees are opting for one–year deal if the sponsorship fee is less attractive.
"Sponsors believe that the shift of venue and ongoing recession would result in 20-40% dip in response. They are renegotiating and trying to reduce the sponsorship fee or going for short-term commitments," said Ranjit Barthakur, vice-chairman, Rajasthan Royals.
"Had it been held in India, which is likely to be the most recession-insulated place, the response would have been great. While a few previous sponsors are pulling out, new ones are joining in," Barthakur added.
However, the defending champions Rajasthan Royals hopes to equal the number of sponsors they had in last season. "We had seven or eight sponsors last year. We would have the same number this year too. Being champions, we are getting premium as well," Barthakur said without disclosing the likely revenue generated through sponsorships.
Apart from that, the team has also resorted to cost cutting measures to maximise revenue. "We have cut down 20% of our cost by cutting down on traveling and squeezing the advertising budget. We have also reduced the number of officials flying with the team," said Utkarsh Singh, business development head, Rajasthan Royals.
Sensing a drop in ticket sales, the defending champions are striving to rope in big players as its merchandise partners. "We are looking at partnerships in different categories like FMCGs, linen and kids products. They would use Rajasthan Royals' branding to come out with product formulations." Barthakur said.
"We already have tie-ups with PUMA in sports apparel, Kids Media India (KMI) in kids' products and GlaxoSmithkline in energy drink. There are around five major tie-ups in line, which we will announce next week," Barthakur added.
The team franchisee is also in talks with South African sponsors and partners to expand its fan base and provide maximum value to its Indian sponsors.
"We have tied up with a South African television channel Supersport and sports magazine Sports Illustrated, to connect with local fans. We have also launched a massive school contact programme in SA to garner support from young fans," Barthakur said.
While sponsors are looking out for long-term deals with lower fees, team franchisees are opting for one–year deal if the sponsorship fee is less attractive.
"Sponsors believe that the shift of venue and ongoing recession would result in 20-40% dip in response. They are renegotiating and trying to reduce the sponsorship fee or going for short-term commitments," said Ranjit Barthakur, vice-chairman, Rajasthan Royals.
"Had it been held in India, which is likely to be the most recession-insulated place, the response would have been great. While a few previous sponsors are pulling out, new ones are joining in," Barthakur added.
However, the defending champions Rajasthan Royals hopes to equal the number of sponsors they had in last season. "We had seven or eight sponsors last year. We would have the same number this year too. Being champions, we are getting premium as well," Barthakur said without disclosing the likely revenue generated through sponsorships.
Apart from that, the team has also resorted to cost cutting measures to maximise revenue. "We have cut down 20% of our cost by cutting down on traveling and squeezing the advertising budget. We have also reduced the number of officials flying with the team," said Utkarsh Singh, business development head, Rajasthan Royals.
Sensing a drop in ticket sales, the defending champions are striving to rope in big players as its merchandise partners. "We are looking at partnerships in different categories like FMCGs, linen and kids products. They would use Rajasthan Royals' branding to come out with product formulations." Barthakur said.
"We already have tie-ups with PUMA in sports apparel, Kids Media India (KMI) in kids' products and GlaxoSmithkline in energy drink. There are around five major tie-ups in line, which we will announce next week," Barthakur added.
The team franchisee is also in talks with South African sponsors and partners to expand its fan base and provide maximum value to its Indian sponsors.
"We have tied up with a South African television channel Supersport and sports magazine Sports Illustrated, to connect with local fans. We have also launched a massive school contact programme in SA to garner support from young fans," Barthakur said.
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