Kings XI Punjab has got new sponsors and most of the old ones are still there. However, experts say that, together, all the eight IPL franchises are expected to see a 30-40 percent fall in sponsorship revenue in 2020 at Rs 300-350 crore from Rs 500 crore last year.
While cricket is getting back into the game, sponsorships are not. Experts estimate a 37 percent loss to global cricketing sponsorships owing to COVID-19.
Yet, Satish Menon, CEO of KPH Dream Cricket, is not much worried. KPH Dream Cricket owns the Indian Premier League (IPL) team Kings XI Punjab. Last year, it bought St Lucia Zouks, formerly known as St Lucia Stars, a team that plays in Caribbean Premier League (CPL), a T20 league held in the Caribbean.
The 2020 CPL started on August 18 and will end on September 10. It is being played behind closed doors in the Carribean. In fact, St Lucia Zouks has qualified for the final tomorrow.
The company is the second IPL owner to have a CPL team, the other being Red Chillies Entertainment.
Frequently Asked Questions
A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.
There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.
Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.
Red Chillies owns Kolkata Knight Riders (IPL) and Trinbago Knight Riders (CPL).
Good traction for Caribbean League
Talking about sponsors for St Lucia Zouks this year, Menon said: “While the client is new, they are seeing good traction, thanks to the strong viewership CPL enjoys. Whatever price we offered, they went with that,” said Menon.
St Lucia Zouks has also brought in INDIBET, an online betting platform, as the title sponsor, and Orbit Exchange and cricketnmore.com as associate sponsors.
In fact, for the entire CPL, there hasn’t been a significant impact in terms of the number of sponsors this year.
In 2019, as many as 15 sponsors had joined hands with CPL. This year, the number is 12, with most sponsors coming back. Fun88, an online betting platform, and Google Esports, are the two new brands in 2020.
If we go by industry estimates, sponsorship deals in the official partner category ranges between Rs 1 crore and Rs 3 crore per year.
CPL’s official partners this year are Fun88, El Dorado Rum, Republic Bank, Dream11, and Googly.
It is estimated that Dream11’s sponsorship deal with CPL is around Rs 73 lakh per season. The company is the official fantasy cricket partner of CPL.
Growing viewership in India as well
Experts say that brands have not been shy when it comes to spending during CPL due to the growing viewership the league has been witnessing over the years.
Despite the time difference and matches being played behind closed doors this year, experts say that the companies, especially Asia-focused brands, have shown strong confidence in CPL this year.
No surprises here as India is one of the big contributors in terms of viewership for CPL.
In 2018, out of the total 200 million viewership recorded by CPL, India had the largest share, with a combined viewership of over 70 million, on Star and Hotstar.
Even now, CPL is the most watched sports on TV, according to the Broadcast Audience Research Council India (BARC) data.
The difference this time
While things have been pretty much the same in terms of sponsorships in CPL, a lot has changed for the players.
“The players were tested and kept in one place. It has not been easy on the players as most of them are used to their hotel rooms, but this time they had to be in quarantine (in official hotels). However, their performance was not affected,” said Menon.
Confident about Kings XI Punjab
Along with St Lucia Zouks, Menon is confident about Kings XI Punjab -- both in terms of performance as well sponsorship.
“The COVID-19 impact is only mild as a lot of our past clients are still with us. In fact, we got one or two new clients and they too are big clients like Colgate. Dream11 has partnered with us for shirts. EbixCash is our biggest partner,” said Menon.
If we look at the growth of Kings XI Punjab, the franchise has seen its brand value increasing. In 2019, it was up four percent with a total value of Rs 358 crore against the Rs 343 crore in 2018, according to Duff & Phelps IPL brand valuation report 2019.
After seeing a drop in 2016, the team has seen its brand value increasing since 2017.
In addition, Kings XI Punjab reported a net profit of Rs 44.55 crore in 2019, up nearly 150 percent as compared to Rs 17.98 crore in 2018.
Some losses ahead
Experts say that, together, all the eight IPL franchises will see a decline of 30-40 percent in sponsorship revenue this year, which is expected to be around Rs 300-350 crore, as compared to Rs 500 crore last year.
The franchises will also lose ticket revenue as IPL, too, will be played behind closed doors. The cricket league will start from September 19 and go on till November 3 in the UAE.
When it comes to ticket revenue, Menon said that for Kings XI Punjab, the stand size is 30,000 to 35,000 and any team would lose between Rs 15 crore - Rs 20 crore in terms of ticket sales.
Overall, franchises will lose around Rs 400 crore in ticket sales. Then, there is the ground activation revenue. Franchises will have to forgo this revenue, which ranges between Rs 15-20 crore for each franchise. The loss is despite franchises replacing ground deals with digital ones as advertisers will not buy digital deals at the same price.
Yet, franchises are looking at virtual meet and greeting sessions for fans with their favourite cricketer. “Internally we are doing a lot of things digitally. Digital will be big this year,” said Menon.