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IPL sponsorship: PepsiCo put off by spot-fixing scandal

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Controversy seems to have become the middle-name of the Indian Premier League (IPL), with the latest issue being title sponsor PepsiCo India wanting to end its association with the cricket league.
Acknowledging that the multinational firm has raised some concerns, the Board of Control for Cricket in India (BCCI) said it has assured the sponsor that steps will be taken to address the issues raised and necessary solutions will be worked out.

In a joint statement, the BCCI and PepsiCo India said they are in talks to work out a solution. However, they did not reveal details about the issues raised by PepsiCo India.
The spot-fixing scandal involving players as well as team owners that brought a bad name to the league is termed as one of the reasons for this development. 

Pepsi’s stand
In November 2013, during a visit to India, PepsiCo Global CEO Indra Nooyi told BusinessLine: “We are a highly ethical and principled organisation. 

“So we want to associate with organisations that are principled and ethical. We hope the current problems of IPL are short-term and they are addressed. But if they are not, we will have to go back and rethink”.

Costly sponsorship
PepsiCo India bagged the title sponsorship in 2012 for about ₹396 crore for five years till 2017.
This was nearly double the price that the previous title sponsor DLF had paid for the title sponsorship.

The joint statement said, “BCCI and PepsiCo have had a longstanding cordial relationship… As part of the process, BCCI and PepsiCo have been in amicable discussions and further update will be shared in due course.” 

Time to clean up the game
In July, the Supreme-Court appointed Lodha Committee had banned Chennai Super Kings and Rajasthan Royals for two years, delivering a further blow to the league’s image.

Brand experts say that while BCCI may find other brands for the title sponsorship, if PepsiCo decides to walk out, it will signal the need for the Cricket Board to act swiftly to clean up the game.

Shailendra Singh, Joint MD, Percept, said brands pay top dollar to associate with the sport and cannot compromise on their brand values. 

He said the Board needs to have an ethical voice, better governance mechanisms and be more accountable, even if it means rewriting the constitution of BCCI.

Element of uncertainty
Meanwhile, Indranil Das Blah, partner at CAA-Kwan, said that sponsors do not like uncertainty.
“Sponsors want clarity to leverage on their association with a sporting league and make it economically viable. BCCI should work towards removing the element of uncertainty,” he said.
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