Sponsors staring at huge losses as IPL leaves India

New Delhi: Indian Premier League (IPL) isn't just about cricket; it's a serious money spinner. Now as the league prepares to leave the Indian shores, the money men are worried.

Experts believe the shift to South Africa will significantly erode value for local advertisers and on-ground sponsors and the Board of Control for Cricket in India (BCCI) might end up sharing the majority of burden.

"They (BCCI) may have to pay out to the franchises. If two or three franchises, who incurred losses, decide to pull out then the IPL will no longer be the IPL," said Latika Khaneja, Director, Collage Sports Management

The worst affected will be the beverage majors and consumer goods companies, which had planned on-ground and in-stadia campaigns targeting the summer season.

In the times of recession, DLF, the partner of the IPL, has been struggling like any other international company. Now that the IPL has kept its own interest in mind, there is no doubt that the DLF will suffer heavily in terms of domestic visibility.

"It happened in multiple cities in India last year that allowed us to project ourselves as a pan-India brand to get mileage and top of the mind recall, which helped in the sales. Now that it is not being held in the Indian cities, it may have an impact," said Rajeev Talwar, MD, DLF Develepors Ltd.

While the franchises will lose out on local brand loyalty in a big way, the extra expense on logistics will hit them hard. And all that would mean a further dilution in profits for the BCCI and the broadcasters.

Surprisingly, in this scenario, the players, especially the marquee ones, might end up as major gainers by demanding a higher appearance fee for playing the local league abroad.

"On the contrary they (the top players) may end up getting paid more because the marquee players make the IPL," said Khaneja.

Some franchises were hoping that the second season would offset some of their losses from the first season but in all probability they will have to wait another year before realising that ambition.