Pepsi quits IPL cricket sponsorship after match-fixing scandals

PepsiCo has withdrawn from its sponsorship deal of the Indian Premier League (IPL) following match-fixing scandals, with Chinese smartphone maker Vivo taking over the title sponsorship of the world’s richest cricket tournament.

The beverage company’s exit could discourage other brands from investing in the IPL, analysts said.

Pepsi bought the title sponsorship rights to the IPL for five years for US$71 million starting in 2013. That was almost double the amount paid by the Indian property developer DLF for the previous five years.

But the IPL has been plagued by corruption scandals in recent years. In July, Chennai Super Kings, owned by Indian Cements, and Rajasthan Royals, owned by a consortium including Bollywood’s Shilpa Shetty, were suspended from the competition for two years over a match-fixing controversy.

“There is a dent in the image of IPL,” said Sanjay Chakraborty, a marketing communication adviser based in Ahmedabad in Gujarat. Pepsi was investing “a lot of money, which was at stake with this brand”, he said. “Their own image can get corroded if they associate with an event that has an image problem.”

Cricket is by far the most-watched sport in India. The IPL was launched in 2008, loosely based on Britain’s Premier League football championship and the NBA. It has gained mass appeal because of its fast-paced Twenty20 matches, which last only a few hours each, and because of the Bollywood glamour of the tournament, with actor Shah Rukh Khan among the team owners.

“IPL has to do something to revive its image,” said Mr Chakraborty. “They can’t afford to lose these big brands.”

Sponsorship rates were likely to come down because of the match-fixing scandal and Pepsi’s withdrawal as it would become more challenging for the IPL to get sponsors on board, he said.

Harish Bijoor, the chief executive of Harish Bijoor Consults, a Bangalore-based firm that specialises in brand and business strategy, said that the change in the title sponsorship would be unlikely to affect viewership.

“I do believe IPL has this uncanny way of inventing for itself good viewership season after season,” said Mr Bijoor. “It is all about the process that makes every season packed with zing of both the positive and negative kind. Both add to the glory and glamour of this format of ‘cricketainment’.”

He added that the new title sponsor would need “to invest time, energy, money and, most importantly, creativity in ensuring that the format of sponsorship is as exciting as what Pepsi brought to the game”.

An array of companies have signed up to the competition as advertisers, sponsors, and team owners to capitalise on the tournament’s ability to reach large numbers of Indians across the country.

The brand value of the tournament was $3.2 billion last year, according to American Appraisal India.

The Indian steel giant JSW Group in July revealed that it had shelved plans to buy an IPL team because of the match-fixing controversy.

Mr Chakraborty said that with many other opportunities on offer for sponsors in India, Pepsi would “definitely find some other way of investing their money into some other event”.

business@thenational.ae

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