Tata has confirmed its title sponsorship for IPL, replacing Vivo, the sponsor for the past two years. The Chinese mobile phone maker had agreed to pay ₹440 crores annually for the sponsorship when it bagged the rights in 2017, totaling a whopping ₹2,199 crores for five seasons. The contract was initially supposed to end in 2022 but got extended by a year as Dream11 replaced Vivo in 2020 due to the Galwan valley face-off. 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.
Tata’s IPL sponsorship is a powerful play as IPL is the most prominent television and digital event in the country, it can be considered profitable to grow Tata group’s brand equity. With many major companies like Reliance already in the race to diversify their businesses, Tata group has taken the initiative to make itself valid across all age groups.
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 Tata’s IPL sponsorship and the outgoing Vivo one.
“We are delighted that India’s largest and most trusted business groups have believed in the IPL’s growth,and together with the Tata Group, we will look to take Indian cricket and the IPL forward to greater heights,” said Jay Shah, honorary secretary of BCCI.
The Tata’s IPL sponsorship can also be seen as the brand’s end goal of building on their corporate group and super app ambitions. “They’ve been making acquisitions like BigBasket for grocery supplies and 1mg for online healthcare. They have interest in multiple areas, including airlines. They are likely to build on the Tata brand trust itself,” said Communications strategy consultant Karthik Srinivasan.
While the reason behind Vivo’s exit isn’t apparent, it could be prompted by the China-India tensions or the more immediate one of heightened tax scrutiny on Chinese mobile phone makers, Srinivasan said. Vivo’s presence was bringing lousy publicity for both the league and the company. With negative sentiment around Chinese products, the company had to pull out of the sponsorship with one season left for the deal to be completed.
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Regardless of the reasons behind Vivo’s exit, Tata group’s IPL sponsorship is an excellent move to become more relevant in today’s quickly changing world.
