Tough terrain ahead for Indian Premier League teams

The toughest period of the Indian Premier League franchisees’ association with the Twenty20 bandwagon is coming up. The next two months will be tough because during this time they’ll have to rope in the best sponsors available and plan their path for the tournament beginning in April.

While a few sponsors have pulled out at the individual level as reported by TOI on Friday, a couple have injected fresh enthusiasm into the league by coming on board.

Coke shook hands with Team Kolkata recently while Reebok, Nike and Adidas continue to be either apparel sponsors or partners with various teams.

Prominent brands like Nokia, Hero Honda and Mastercard have also renewed their ties with individual franchises for the second year in succession.

So, when IPL commissioner Lalit Modi insists – as he did at a hastily arranged media briefing here on Friday – that sponsors are waiting to come aboard and that payments have been on schedule, he is hinting at the big names mentioned above.

“I want to make it amply clear that all our sponsors and partners are still on board. They have all paid as per the schedule. In fact, a lot of other sponsors have approached us and are willing to pay more than our existing ones,” Modi said.

However, franchisees have more than just the individual sponsorships to think about. While they believe that once the financial situation improves, so will the overall scenario, the issue troubling them seems to be the money flowing in from the central revenue pool of the IPL.

“The money coming in from the central pool, the revenue model which feeds on television rights and title sponsorships, has to continue smoothly,” says a franchise official.

The official explains that since a major chunk of money coming into the IPL depends on central sponsorships, the cash flow has to remain uninterrupted.

“It is like a cascading effect, where if one party decides to delay the payment, the after-effect of it multiplies. It’s like my employer delays my salary, I pay my grocer late and grocer pays the wholesaler late and so on… In these times of financial crunch, that’s what is dangerous for any business,” said the official.

Eventually, what these franchisees maintain is that should the central sponsorships revenue coming in from SonyMax and DLF remain smooth, there won’t be too many problems. “The entire revenue model of the IPL largely depends on the central sponsors,” is the unanimous verdict of officials of three franchisees.

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