One of India’s largest business conglomerates, the Tata Group, will replace Chinese mobile manufacturer Vivo as the Indian Premier League’s title sponsor for the next two years.
As per reliable sources, the Tatas will be paying around Rs 670 crore for two years of title sponsorship while Vivo will pay a total of Rs 454 crore for termination of the contract which makes it a win-win situation for the BCCI as it is set to earn a whopping Rs 1124 crore for seasons 2022 and 2023 respectively.
‘‘Yes, Tata group is coming in as IPL title sponsor,” IPL chairman Brijesh Patel confirmed the development to PTI.
BCCI secretary Jay Shah welcomed the company in the new role.
”This is indeed a momentous occasion for the BCCI IPL as the Tata Group is the epitome of global Indian enterprise with an over 100-year-old legacy and operations in more than 100 countries across six continents,” Shah was quoted as saying in a media release.
It is learnt that Tata Group could remain title sponsors for the IPL’s 2023 season too as that was the one-year concession given to Vivo since it lost a season of sponsorship in 2020.
Vivo had a deal of Rs 2200 crore for title sponsorship rights initially from 2018-2022 but after the 2020 Galwan Valley military face-off between the Indian and Chinese Army soldiers, the brand took a break for a year in view of a public backlash and Dream11 replaced it in the IPL.
However, Vivo was back as IPL tittle sponsor in 2021 even as speculation raged that the company was looking to transfer the rights to a suitable bidder and the BCCI approved the move.
It is learnt from reliable sources in the BCCI that the Board would be earning Rs 547 crore in 2022 and Rs 577 crore in 2023.
As per information available, Vivo had committed Rs 996 crore for the two years’ title sponsorship (2022 and 2023) with Rs 484 crore in 2022 and 512 crore in the next year.
The value shot up as the IPL expanded to a 10-team event featuring 74 matches this year instead of the 60 which were in place with eight teams.
So how does the break-up of Rs 1124 crore windfall work for BCCI?
The Tatas will be paying Rs 670 crores at the rate of Rs 335 crore per year. Of this, Rs 301 crore will be the Rights Fee and an additional Rs 34 crore would be the incremental fee (for increase of 14 games). But since Vivo decided to terminate the contract, it will have to pay the difference in both years — Rs 183 crore for 2022 and Rs 211 crore for 2023. In addition to that, Vivo will also have to pay a 6 percent assignment fee for both years which comes to Rs 29 crore in 2022 and Rs 31 crore in 2023.
So in all, Vivo will get out of the sponsorship deal by paying Rs 454 crore which is effectively a little over one year of sponsorship money originally committed by the company.
For the Tatas, it’s a great deal considering that they are getting marquee sponsorship rights at a lesser cost for the next two years. The biggest winner is the BCCI, which stands to earn from both the new sponsor as well as the outgoing one.
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