The list of established sports which have secured a five-fold increase in the value of consecutive sponsorship deals is not a long one.
So when mobile manufacturer Vivo renewed its title sponsorship of the Indian Premier League last year, it came as a surprise to many that its rights holder, the Board of Control for Cricket in India (BCCI), had secured a 554% uplift in the value of the contract.
Vivo agreed to stump up Rs2199 crore ($337m, GPB240m) over five years (or 440 crore per year) in a deal that begins this season.
Following the League’s spot-fixing scandal of 2013, the size of Vivo’s winning bid raised eyebrows. But, as we can show, put into context, there was a strong case for a big increase in deal value.
First of all, viewership. Our data shows that IPL’s audience continues to grow. As our chart below demonstrates, average audiences per match have generally increased year-on-year, while total audience has more than quadrupled since Season 1.
Second, let’s look at the size of these audiences relative to other Indian sports.
Our data shows that every other sport is dwarfed by the presence of cricket. The chart below picks out the most-watched international and domestic sports match-ups in some of India’s favourite sports over the past two years.
What leaps out is the size of the audience for cricket compared to any other sport. But it also demonstrates that a national (and political) rivalry, that between India and Pakistan, can attract approaching half the country’s population to their TV screens. Something like that puts even the IPL in the shade.
In other sports, the reverse is true – domestic rivalries attract more interest than international ones. But even events where an Olympic gold medal is at stake in a sport close to India’s heart – badminton in this case – pull in less than a third of the audience that an important IPL game will secure.
Third, let’s compare the IPL to India’s next biggest domestic sport – kabaddi.
There is no question that kabaddi is thriving. It, too, has had its rights snapped up by STAR, the nation’s biggest sports broadcaster, and has reached ever-increasing audiences over its five seasons. It also commands a five-year title sponsorship deal. But its deal, reached at around the same time – with the same sponsor – is just an eighth of the value of the IPL’s.
So all the evidence points to the fact that, far from being a bad deal, Vivo’s IPL sponsorship probably represents fair value for both parties.
Vivo, having tested the water for two years before signing this new partnership, continue a relationship with a growing property – something that demands a deeper dip in the well. The mobile giant will also have benchmarked the impact of its activation relative to the sport’s main competitor, kabaddi – which it also now sponsors.
For its part, BCCI secures a giant deal – something which befits one of the most-watched sports properties in the world. Established sports events tend to see steadier rises in their sponsorship but whilst the BCCI broke the mould with this deal, the data suggests the valuation was more of a correction than a distortion. And in five years’ time, with continued growth, they may well come looking for more.