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Chinese sponsor's exit opens up IPL cricket deal for India unicorn

Dream11 replaces Vivo for highly coveted title after smartphone maker is forced out

Chinese smartphone maker Vivo had been the official sponsor of the Indian Premier League. (Photo courtesy of the Board of Control for Cricket in India)

NEW DELHI -- India's online sports gaming company Dream11 on Tuesday won the title sponsorship rights for a major cricket tournament, replacing Chinese smartphone maker Vivo, which opted out at the last minute after facing public backlash in the midst of a tense Sino-India border standoff.

Indian Premier League 2020 is slated to be held in the United Arab Emirates from Sept. 19 to Nov. 10.

Dream11 secured the deal with "its bid of 2.22 billion rupees ($29.7 million) and will be the title sponsor till December," IPL Governing council chairman Brijesh Patel told the Nikkei Asian Review, adding education startups Byju's and Unacademy were the other two bidders, with bids of 2.01 billion rupees and 1.71 billion rupees, respectively.

Local media had earlier reported that Tata Sons was one of the frontrunners to bag the IPL title sponsorship, but Patel confirmed to Nikkei that the conglomerate was not among the final bidders.

The 13th edition of the cash-rich eight-team T20 league featuring top Indian and international cricket players was originally scheduled from March 29 to May 24, but could not take place due to the novel coronavirus pandemic and a strict lockdown to prevent its spread.

With India continuing to report a spike in cases, the IPL Governing Council decided earlier this month to hold the popular league in the UAE with matches to be played in Dubai, Sharjah and Abu Dhabi.

Founded in 2008, Dream11 reportedly counts China's Tencent Holdings among its investors. It is a unicorn, or a private startup valued at more than $1 billion.

The platform bagging of the title sponsorship follows the Board of Control for Cricket in India and Vivo Mobile India on Aug. 6 deciding to suspend their partnership for the IPL this year against the backdrop of rising anti-China sentiment in the country after a violent border face-off on June 15 that left 20 Indian soldiers dead and unspecified casualties on the Chinese side.

Earlier, the BCCI had come under criticism for not dropping Vivo as the IPL title sponsor. Two days ahead of the official announcement about suspension of the Vivo sponsorship, local media reported that the Chinese company was pulling out of the upcoming IPL edition following backlash it faced on social media.

The Confederation of All India Traders, which represents over 70 million traders across the country, and Swadeshi Jagran Manch, the economic wing of Hindu nationalist Rashtriya Swayamsevak Sangh or National Volunteers Organization, had severely criticized the BCCI over the Vivo deal.

In an Aug. 3 letter to Home Minister Amit Shah, CAIT secretary-general Praveen Khandelwal said the "decision of the BCCI [to retain Vivo as the title sponsor] smacks [of] its lust for money."

Urging the minister not to grant permission to BCCI for holding the IPL, he pointed out that even mega international sports events such as Olympics and Wimbledon "have been canceled" due to the COVID-19 pandemic.

IPL "is a business" run by those who are insensitive toward the nation and its security concerns, SJM national co-convenor Ashwani Mahajan tweeted on Aug. 3. "Whole world is boycotting China, IPL is sheltering them," he said. "They should understand that nothing is above nation, not even cricket," he tweeted, adding that the people may boycott the IPL.

A scooterist rides past a shopping complex with the billboard of Chinese smartphone maker Vivo in Ahmedabad, India.   © Reuters

Both CAIT and SJM have welcomed Vivo's exit.

Before Vivo, the IPL title sponsorship was held by the U.S.-based beverage giant PepsiCo after it won a bid worth 3.97 billion rupees -- equivalent to $53 million at current rates -- for five seasons starting in 2013.

But PepsiCo ended the contract two years ahead of schedule and Vivo replaced it for the 2016 and 2017 editions, after which the tournament was called 'Vivo IPL'. The Chinese company retained the sponsorship for five seasons beginning in 2018 with a whopping 21.99 billion rupee bid, or about 4.4 billion rupees annually -- up 454% over the previous contract with PepsiCo.

Since the latest title sponsorship bids were invited only for this year's IPL edition, it is not clear at present whether Vivo would return next year and complete its five-year contract.

"Now BCCI should come out and make themselves clear that they wouldn't make any such deals with Chinese companies ever in future, because till now they are saying that this is only for this year. Our stand is, not now, not ever," Mahajan said in another tweet earlier this month.

When asked about the possibility of Dream11 holding the title sponsorship until 2022 in case Vivo does not come back, Patel told Nikkei, "let this happen this year [first]."   

According to global consultancy firm Duff & Phelps, the brand value of IPL in 2019 was $6.8 billion, up 7% from the previous year after taking currency fluctuations into consideration.

In local currency terms, the IPL ecosystem value increased by about 13.5% to 475 billion rupees from 418 billion rupees, "underpinned by the continued confidence advertisers, broadcasters, sponsors, affiliates, partners and viewers have shown in the IPL," it said in its annual IPL Brand Valuation Report in September.

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