» Business » PepsiCo fizz back in cricket

PepsiCo fizz back in cricket

By Viveat Susan Pinto & Arindam Majumder
February 20, 2016 14:54 IST
Get Rediff News in your Inbox:

After IPL exit, beverage maker signs up as first BCCI on-ground sponsor

Beverage maker PepsiCo's four-year on-ground cricket sponsorship deal for domestic and international matches played at home is estimated to be Rs 30-35 crore (rs 300-350 million), according to persons.

E-commerce firm Paytm had paid Rs 203 crore (Rs 2.03 billion) in July last year for title sponsorship rights of similar matches, also for a period of four years.

The value of the on-ground rights have been assumed at one-sixth of the value of the title sponsorship rights owing to its limited nature.

This is the first time the Board of Control for Cricket in India (BCCI) has hived off on-ground sponsorship rights from title sponsorship. Till now, title sponsors would advertise on-ground as well, at least for home matches. That clearly will no longer be the case.

Second, it is assumed the beverage company will pick up the pouring rights during the drinks break.

Clearly, the deal was thrashed out after several rounds of negotiations keeping all interests in mind, persons in the know said. "BCCI was able to monetise a property, while PepsiCo gets back into the game," a BCCI official said.

"The ball was set rolling the moment PepsiCo approached the board last month. They made presentations to board officials, following which the deal was finalised last week," the BCCI executive said.

An announcement about PepsiCo's association is expected to be made in the next few weeks. An email sent to PepsiCo got no response till the time of going to press. Anurag Thakur, BCCI's secretary, was not available for comment.

But, in a recent interaction with the Business Standard, D Shivakumar, chairman and chief executive, PepsiCo India, said that the company had not snapped ties with cricket after its exit from IPL (Indian Premier League). It is a sponsor of the upcoming T-20 World Cup, he said.

The sealing of the on-ground sponsorship deal, say sources, indicates that the country's apex cricketing body and one's of the country's key  dvertisers have patched up.

It may be recalled that PepsiCo had terminated its five-year title sponsorship of the Indian Premier League last year citing credibility issues.

The break-up, which happened two years ahead of the expiry of the contract, came after months of speculation pertaining to the same. The deal was estimated to be close to Rs 400 crore (Rs 4 billion) in value, making it one of the most expensive sports marketing contracts in India.

Airtel, which was the other bidder in the race for the title sponsorship rights in 2012, had put in a bid of Rs 316 crore (Rs 3.16 billion), but was beaten by the beverage firm.

On a yearly basis, PepsiCo's investment in IPL was estimated to be Rs 160 crore (Rs 1.6 billion), according to market sources.

This included Rs 80 crore in terms of title sponsorship, Rs 20 crore (Rs 200 million) for team or franchisee-level sponsorships, Rs 20 crore for beverage and consumer promotions, and Rs 40 crore (Rs 400 million) for on-air ads.

  • Rs 30-35 cr - Estimated deal size of PepsiCo's four-year on-ground sponsorship for home matches
  • Rs 8-9 cr - PepsiCo will shell out per year, a fraction of what it was spending on IPL
  • Rs 400 cr - Deal size of PepsiCo's five-year title sponsorship of IPL
  • Rs 160 crore - PepsiCo's investment per year in IPL
Get Rediff News in your Inbox:
Viveat Susan Pinto & Arindam Majumder in Mumbai/New Delhi
Source: source

Moneywiz Live!