Post IPL, player managers, franchise officials and investors admit that they are coming to terms with new trends and potential conflicts that are beginning to redefine their bottomlines
Post IPL, player managers, franchise officials and investors admit that they are coming to terms with new trends and potential conflicts that are beginning to redefine their bottomlines
BEHIND the screaming fans, the strategy breaks and the DLF maximums, the IPL also appears to have triggered a significant churning off the field, in the bustling market of cricket. The hugely successful Twenty20 league has just wrapped up its second season, and player managers, franchise officials and investors admit that they are coming to terms with new trends and potential conflicts that are beginning to redefine their bottomlines.
Team endorsements preferred
In a nutshell, the IPL appears to have initiated a paradigm shift within the multi-million dollar player-endorsement industry, where individual deals are now gradually losing ground to team endorsements. So much so that sources close to a few leading Indian players say they will push for crucial tweaks in the IPL's player-franchise contracts after 2010, when the current three-year agreements come to an end.
"There is nothing unusual about these contracts," says a senior franchise official. "The IPL contracts do not give franchises anything that is not standard throughout team sports worldwide."
Yet some key concerns persist within the industry, the first of which is the fear that a player endorsing a brand for his IPL team will be shunned by rival brands within the same product category after the tournament. "We are not directly involved with the event, but if you ask me whether it makes brand sense for us to get a player on board before or after the IPL, after him being associated with a rival company during the course of the tournament, I would say not," says V Ramachandran, director, marketing and sales, LG, a leading multinational brand.
A case in point is the reported US$ 2-3m deal between Mumbai Indians and Idea, a leading Indian mobile service provider. Through this IPL, Idea has been using Sachin Tendulkar, Harbhajan Singh and Zaheer Khan together and individually in a TV campaign. Tendulkar, who is one of Indian cricket's leading endorsement faces, is paid around US$ 1.02 million per season by Mumbai Indians, but according to market analysts, he would easily have got US$ 1 million if the Idea endorsement was an individual endorsement outside the league.
"But now, Idea gets Tendulkar, Harbhajan and Zaheer in a package deal that they can utilise through the year," says a player agent. "Obviously, the players don't get a single rupee out of this, and also end up losing out on personal endorsements from other mobile service providers."
Safeguards in player contracts
Franchise officials point out that there are clear safeguards in the IPL's player contracts specifying that brands associated with teams cannot imply that the cricketers are associated with them individually in any manner. "Most of the contracts specify that the players can be used for product endorsement and activation only during the IPL," says a franchise official. "Besides, a team sponsor has to feature at least three players in any advertisements. There are enough and clear safeguards to protect the players."
But behind the fine print, says a player agent, is the fear that some sponsors may tend to project a particular player more in these advertisements. "Besides, it's all about perception," he says. "Once you see Sourav Ganguly or Ishant Sharma endorse a particular product for Kolkata Knight Riders, even if it is with other players, it gets embedded in the public mindspace. You can't then go to individual households and tell them, 'Look, this is a team endorsement and not a personal endorsement."
The other area of concern is that some leading players have been forced to endorse certain brands for their franchises in categories they have steadfastly refused to promote in an individual capacity. For instance, Tendulkar and Rahul Dravid, widely considered role models in Indian cricket, have always refused to endorse liquor brands until the IPL. Tendulkar now has the Royal Stag logo on his team jersey and Dravid promotes Royal Challenge.
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How IPL was a new game off the field too
Then, of course, there is the obvious conflict between personal and team endorsements. For instance, Virender Sehwag endorses Pepsi but has been backing Coca-Cola in newspaper advertisements for Delhi Daredevils.
Ishant Sharma, a rising youth icon, has to promote Coca-Cola's Sprite, when he has a personal contract with Pepsi. MS Dhoni endorses Peter England, a suiting brand, for Chennai, but individually promotes Siyaram, a rival brand. Significantly, some of these roles will be reversed in another month when the ICC World Twenty20, of which Pepsi is one of the main sponsors, gets underway in England.
Lathika Khaneja, who manages Sehwag, says that players should be insulated from such situations. "In fact, Sehwag asked me 'Is Pepsi upset?' " says Khaneja, director, Collage Sports Management. "But they can't be because there's the ICC World Twenty20 coming up. These are not rules made by Sehwag, they are made by the ICC or the IPL, and you're paying a lot of money for those rights and you expect to get something for it."
Yudhajit Dutta, who manages Dhoni, and Khaneja, insist that the franchises are right in trying to maximise their investment. The IPL awarded the Mumbai franchise to Reliance industries for their top bid of US$ 111.9 million, Bangalore to the UB Group for US$ 111.6 million, and Chennai to India Cements for US$ 91 million last year. That apart, most of the eight teams have spent US$ 7 million each on purchasing players through three official auctions.
A chief executive with one of the eight franchises takes the argument a few steps forward. "One, all this is new and real money for the players, not projected figures on an Excel sheet," says the official. "This money did not exist for them before the IPL, and obviously, they have not been paid such sums just for their cricketing skills."
Acceptable balance
There is still a long way to go before an acceptable balance is struck, says a player agent, and till then there are issues to resolved, possibly after the next IPL, which is tentatively slated for March 2010.
"I don't believe there is a time restriction on the franchise or its partners for using player identification," says a player manager who handles two leading players in the IPL. "This is a grey area and an obvious area for change in the future.
"What I suspect is going to happen is that some modifications will be made in this area after the 2010 season. Ultimately, guys like Dhoni are going to need to sit down with the IPL to work out some clearer parameters, like more than three players in the adverts and their use only 30 days before and after tournament."
This is an abridged version of an article published on Cricinfou00a0 website. For the full piece, log on to www.cricinfo.com
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