BCCI has ended its ties with Vivo due to troubled political scenarios between India and China.
Contrary to popular speculation, Vivo is unlikely to resume its association with the Indian Premier League (IPL). Mobile manufacturing giants are reportedly seeking an exit from the IPL by transferring its title sponsorship rights to interested bidders, which may include fantasy gaming platform Dream11 and edu-tech start-up Unacademy.
In 2017, Vivo signed a five-year contract worth Rs 2,199 crore to become the main sponsor of IPL. They paid Rs 440 crore to the BCCI every year. It had replaced PepsiCo, which quit a Rs 396 crore deal in 2016. But last year, the Board of Control for Cricket in India (BCCI) and the Chinese smartphone giant had decided to suspend the ties for the IPL 2020 which was being held in the UAE.
The decision came in the wake of the deadly brawl between Indian and Chinese armed forces on the border. Several reports had also suggested that Vivo withdrew from the deal for financial reasons. Mobile makers were looking for a reduction in the sponsorship sum due to the disruption of Covid-19 and ultimately decided to suspend ties for IPL 2020.
Reports suggested Vivo wanted the deal postponed for a year on the grounds that paying Rs 880 crore for two seasons over a six to seven month period was not easy. Thus, there was much speculation that the Chinese company would return as the main sponsor of IPL 2021. However, Vivo has reportedly decided otherwise and is seeking to end its ties with the T20 tournament.
Almost final that Vivo will quit IPL title sponsorship deal: official from BCCI
According to an NDTV report, the tense situation between India and China is one of the reasons for Vivo’s decision to end their ties with IPL despite the two years remaining on their contract. With Sino-Indian geopolitical relations in a sensitive state, Vivo understands that it is not safe to continue the association.
“It is almost final that Vivo is leaving the IPL title sponsorship agreement by mutual consent with the board of directors. He has been suspended for the 2020 edition. However, there is a clause that allows them to transfer their outstanding obligations as sole title sponsors to the new winner. If the board agrees in principle, it can happen, ”said a senior BCCI official, quoted by the media.
With IPL slated for an expansion to 9 or 10 teams in 2022, the new bidder is expected to secure at least three years of title sponsorship rights. Last year, BCCI entered Dream11 as IPL’s title sponsor at the very last minute. Dream11 had won the auction race for Rs 222 crore. BCCI hopes Vivo will transfer its rights so that the old sponsorship amount can be matched or even improved.
“Dream11 and Unacademy will present their offers to Vivo. Unacademy is in any case an associate sponsor and they are prepared to offer a higher amount in order to acquire the rights to Vivo, ”said an industry insider who is following the developments.
“Look, Vivo paid around Rs 440 crore (Rs 2,190 crore for 5 years). Now if BCCI launches offers, just like last year when Dream11 paid Rs 222 crore, it could increase but cannot be doubled. But if there is a transfer of rights, the old amount could be matched or even improved, ”the source said.