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Rediff.com  » Business » A win-win for cricket World Cup sponsors

A win-win for cricket World Cup sponsors

January 24, 2003 14:44 IST

The Indian sponsors of the cricket World Cup -- LG Electronics and Pepsi Foods -- are seeking compensation from the International Cricket Council, the organisers of the tournament, for violating the contracts it had signed with each one of them.

ICC and BCCI may reach an agreement on Friday that the World Cup should proceed without any restrictions on advertisements and on the Indian players' commercial obligations and that the dispute will be resolved after the tournament is over.

If this happens, the compensation that ICC will pay sponsors will be higher than the money they spent for the controversial clause, which restricted their rivals from airing commercials involving the Indian cricketers one month before and after, and during the tournament that gets underway on February 8.

In case, the contract is only partly diluted and the rivals of the sponsors are barred after all, the sponsors will get a compensation for the period the contract was violated.

The deadline for restricting the sponsors began on January 9. LG Electronics' general manager (marketing) Ganesh Mahalingam said his company has already written to the ICC seeking compensation on the ground that rival Samsung continues to air commercials involving Indian cricketers despite the ICC having agreed that only the sponsors were entitled to field the cricketers in their advertisements beginning from a month before the tournament got underway to a month after it was over.

But rivals like Samsung, for instance, have continued to air advertisements involving members of the team, and even organised promotional shows near Delhi with the same cricketers, much to the chagrin of the global sponsor LG.

TVS Motor has been airing its Sachin Tendulkar ads despite rival Hero Honda being an associate sponsor of the Cup.

"Why should we not seek compensation. As an official sponsor we had agreed to the ICC's and BCCI's request that we take no objection to the Champions Trophy in Sri Lanka last year, and that the two cricket governing bodies will settle the matter later but ahead of the World Cup in South Africa. But the deadlines have expired long time ago. We are entitled to a compensation even by the commercial agreement. We will definitely seek it," said Mahalingam.

Pepsi executives declined to comment. But a statement from the softdrinks company said: “We believe we have resolved the issues in substantial parts this time around too (like during the Champions Trophy in Sri Lanka)...”

The executive council of the ICC's marketing arm will meet on Friday to try and resolve the issue, though the international body has already written to the BCCI that it was willing to conduct the World Cup without any restrictions on advertisements and the players, and the disputes will be resolved after the tournament is over.

In case, the international court for arbitration for sports gives a judgement in favour of the ICC, the BCCI will have to pay out the compensation.

However, the BCCI is opposed to the proposal that it will be liable to pay the compensation to the sponsors.

Partha Ghosh in New Delhi