The Hindu : Sport / Cricket : Hero Honda is IPL associate partner

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Hero Honda is IPL associate partner

Special Correspondent

Three-year, $12-million deal negotiated
IPL looking for six associate sponsors

Mumbai: The BCCI-promoted Indian Premier League (IPL) Twenty20 has made an initial offer of $7 million for each of the first three years to prospective corporates who in the last 10 years have been either title sponsors or associate sponsors of the BCCI and ICC events.

It’s understood that BCCI has already negotiated a three-year deal with automaker Hero Honda, but for $4 million (Rs. 16 crore) for the first year of the competition. Sources said Hero Honda had made a commitment for three years, which means it will pay $12 million.

Hero Honda, which had an agreement with ICC’s signature events from 2001-07, had made a Rs. 30.60 crore per annum bid for the IPL title sponsorship, but real estate major DLF won it at Rs. 200 crore for the first five years.

ICC pattern

The IPL has opted to follow the ICC pattern and plans to raise over Rs. 100 crore each year from six associate sponsors, seeking a three-year commitment.

The IPL’s revenue model for the eight franchise owners consists of a central revenue pool and a local revenue pool. While the central pool consists of revenue from media rights (sold to SET MAX/WSG for $918 million for 10 years) and sponsorship revenues (title sponsor, associate sponsor and in-stadia), the local revenues, that will be entirely handled by the eight franchisees, consists of 100 per cent gate receipts, franchise shirt sponsorship, local sponsorship, licensing programme, uniform merchandising, hospitality and premium seating, match-day concessions, match-day promotions and franchise media platforms.

Franchisees’ share

The eight franchisees will share 80 per cent of the yearly instalment of the global media rights in the first five years and 60 per cent from the sixth to the 10th year. SET MAX/WSG are committed to pay the BCCI $59 million for each of the first five years and a sum in excess of $118 million for each of the last five years.

The franchisees will share a sum after the production, BCCI’s share and other expenses are taken into account every year.

A BCCI source said he’s not surprised by the expression of interest shown by corporates. “The BCCI received Rs. 3.3 crore for the Twenty20 match against Australia at the Brabourne Stadium last November,” said an official.

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