Vivo’s one-year exit, which was touted as a temporary arrangement, could well become permanent now as anti-China feelings still continue to simmer, with the Indian government permanently banning 59 Chinese apps in the country in January this year.
“Unless the government gives permission, Vivo will not come on board. It is in a state of limbo where decisions are still being made,” a person close to the development said.
However, he added that the decision has not been taken, so it would not be correct to say that Vivo has gone out of IPL. “Having said that, there is no decision on Vivo continuing from this year onwards. Right now it is too early to comment on what the final decision will be.”
According to the person cited above, everything depends on the value the new title sponsor will bring to the table.
“If it (the new sponsor) is not going to bring the value that Vivo is paying, then it will be a difficult situation to take Vivo out. Vivo cannot back out or else it will have to pay a penalty. Even when Pepsi went out (Pepsi had ended its title sponsorship deal in 2016) they got someone else on board. They all want an amicable decision and even the Board of Control for Cricket in India (BCCI) is trying to solve the issue amicably, ” he said.
To transfer the rights, Vivo needs to get someone that will be able and ready to shell out around Rs 1,300-1,400 crore for the period between 2021-23.
In 2016, Pepsi not only got a new title sponsor with Vivo taking up the title sponsorship rights of IPL, but the phone company also paid more than what Pepsi was paying each year.
So, Pepsi’s five-year deal was worth Rs 396.8 crore, and it paid BCCI around Rs 79 crore each year from 2013 to 2015. But when Vivo came in, it paid BCCI Rs 100 crore each year from 2016 to 2017. In fact, Vivo also renewed the contract and signed a five-year deal worth Rs 2,199 crore. As per the deal, Vivo paid around 440 crore to BCCI in 2018-19.
But in 2020, IPL once again got a new title sponsor with fantasy sports platform Dream11 coming into the picture to sign a one-year deal for Rs 222 crore.
“Possibly it will be Dream11 that will continue as title sponsor because they have a lot to gain from this. The one-year deal was a successful trial for them,” the person said.
Reports point out that Dream11 in 2020 saw around 44 percent increase in traffic and also got 5.3 million concurrent users on the platform last year.
“The more visible you are in this segment of fantasy sports the more you gain. Visibility is very important for a brand in this space. A match is happening and to participate in fantasy sports you need to remember the platform. Hence, it is all about brand recall. First thing that comes to mind if one wants to play fantasy sports is Dream11 and one reason for that is its association with IPL as title sponsor last year. This is why they (Dream11) will be the biggest gainers if they continue as title sponsors of IPL. Plus, IPL is watched internationally as well and even Dream11 wants international visibility,” the person said.
However, " Dream11 has not yet started discussions regarding continuing its IPL title sponsorship deal," a person working with the firm said, on condition of anonymity.
While Dream11 commands a 90 percent market share in the fantasy sports gaming market with around 100 million users, there are other platforms that are seeing growth too in terms of users.
Platforms like HalaPlay, which is owned by Nazara Technologies, a gaming and sports media platform, saw significant growth in its user base in 2019 which increased to nine million from 500,000 in 2017.
Plus, the number of fantasy sports platforms have also increased significantly. The Federation of Indian Fantasy Sports (FIFS) in a joint report with KPMG noted that the number of operators increased to 140 in 2019, a 7x growth over 2016-2018.
So, it wouldn’t be surprising if Dream11 continues to be IPL’s title sponsor with an aim to get more users on board.
Along with Dream11, it is learnt that companies such as education technology firm Unacademy are also in the race to acquire IPL’s title sponsorship rights.