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Brand CSK in tailspin after Meiyappan arrest

Source : BUSINESS_STANDARD
Last Updated: Sat, May 25, 2013 18:50 hrs
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Mumbai: Once the most valued of Indian Premier League (IPL) teams, the Mahendra Singh Dhoni-led Chennai Super Kings (CSK) today finds itself in a spot following the controversy surrounding the involvement of chief executive officer (CEO) Gurunath Meiyappan in illegal betting. While the son-in-law of N Srinivasan, chief of the Board of Control For Cricket In India (BCCI), was finally arrested yesterday after evading the Mumbai Police much through Thursday, the unfolding story has left both fans and sponsors gasping for breath.


Brand experts say the equity of CSK, valued at $45.42 million (Rs 250 crore today) according to a recent Brand Finance Report, has taken a few knocks with Meiyappan’s alleged involvement in betting. “If there is one brand that has been damaged the most following the break-out of the controversy, it is Brand CSK,” says Harish Bijoor, CEO, Harish Bijoor Consults.

“Advertisers want to be associated with clean and transparent properties. When there is an unholy nexus, companies obviously want nothing to do with them.”

Media buyers, responsible for parking crores worth of advertising money behind IPL, say the immediate fall-out of the controversy will be the driving down of sponsor rates as far as scam-tainted teams are concerned. “At this stage, CSK leads the pack,” a Mumbai-based media planner said. “Given that most of their sponsorships will come up for renewal next year, certainly they will not get the price they ask for.”  

Adds Ashish Bhasin, chairman India and CEO Southeast Asia, Aegis Media: “It will certainly be hard for them to sell the franchise as they did all these years. Advertisers take into account every detail when choosing to invest behind a property or franchise.”  

In the last six years since IPL began, CSK has emerged as the most consistent of teams, making it to the finals on five occasions, and winning the trophy twice. The team’s key sponsors include Aircel, Gulf Oil, Nissan, Usha International and Reebok.

Of these, Aircel’s six-year sponsorship ends this season and so does Usha International’s two-year contract. When contacted, an Aircel spokesperson said the company had not taken a call about sponsorship for the next year. A spokesperson for Usha International also reiterated the same point.

On an average, team sponsorships at this season’s IPL were available for anywhere between Rs 15-22 crore a brand depending on the franchise and the position on the jersey. Partnerships cost less starting from Rs 1 crore and going up to Rs 2-3 crore a brand.

Thanks to CSK's brand pull, the revenues it derived from advertising were in the region of 32 to 36 per cent, reasonable, according to industry estimates. But with the current controversy brewing, sponsor rates could come down by 20 to 30 per cent, say media buyers.

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