Monday, April 9, 2007

Sponsors may take BCCI to court

Indian cricket’s latest controversy revolving around the decision of the Board of Control for Cricket in India (BCCI) to clamp down on player endorsements threatens to upset the advertising and marketing plans of several leading companies, even as the matter appears to be heading towards the courts.

The Indian team is scheduled to make a presentation to the BCCI to discuss and, if possible, resolve the endorsement issue over the next three-four days. Meanwhile, the agents and sponsors of the players will take up the issue formally with the board on Monday and perhaps take recourse to legal action if the issue is not resolved.

At stake is close to Rs 100 crore worth of annual endorsements, with 50-70 brands riding on Indian cricket in some form or other. Advertisers such as Pepsi, Reebok, Hutch, Adidas, Britannia, TCL, Microsoft, Sansui, Hero Honda, MRF and Bharti — all of which have hinged their ad strategies around cricket — may have to rework large parts of their advertising strategies if the BCCI directives are enforced. Said an irked TCL Holdings CEO CM Singh, which uses Sourav Ganguly for endorsements, “As corporates, we should have the flexibility to decide which and how many cricketers we want for endorsements. This amounts to interfering in the personal lives of cricketers. It’s unacceptable.”

Advertisers such as Pepsi and Reebok would be worst hit, considering that they use at least six-seven cricketers each for endorsements. A Pepsi official said, “We will have to alter our strategy, depending on what is best suited for the cricketers and the company.”

Meanwhile, sponsors, advertisers and sports management agencies have decided to take up the issue formally with the board on Monday. Percept Holdings, which represents Sourav Ganguly, Yuvraj Singh and Sreesanth, has decided to write a letter to the BCCI on Monday, presenting a case for its sponsors and players. Questioned an agitated Percept joint MD Shailendra Singh, “How can the BCCI legally restrain professionals from making money? It’s an MTRP issue. The board has ignored the people who get money into the game. Our sponsors want to know the way forward.”

Globosport, which manages Zaheer Khan and Dinesh Karthik, too has decided to seek legal opinion. Without mincing words, Globosport V-P Anirban Das Blah pointed out, “Why should there be a commercial constraint on the players and not the BCCI? It is hypocritical to bully players and enforce caps on them while there is no cap on the BCCI’s seemingly endless pursuit of profits — whether through unlimited sponsors or meaningless tournaments like the recent one in Abu Dhabi. The board has made the announcements without consulting the agencies, advertisers, sponsors or the cricketers themselves.”

A BCCI official, meanwhile, told ET on Sunday that the restrictions will not be enforced on existing contracts. “We will not disturb the current contracts of players; this will be enforced for all new contracts. The board will review every contract a player signs,” the BCCI official said. However, this raises a pertinent question: while some players have multi-year contracts, others are just beginning their careers. So, while a Dinesh Karthik would have to limit his endorsements to three, a Sachin Tendulkar, on the other hand, could well continue to receive Rs 35 crore annually as minimum guarantee committed to him.

Calling BCCI’s move knee-jerk, Microsoft country manager (entertainment & devices division) Mohit Anand said, “The team lost because they didn’t play well, not because of endorsements. The BCCI needs to professionalise itself. The last chapter has not yet been written on the story.”

Microsoft recently launched its Xbox game, endorsed by Yuvraj. Sport management professionals also pointed out that all over the world, successful athletes endorse brands with no comparisons drawn between their individual performances and the number of brands they endorse. “If the BCCI feels a player is not performing, he should just be dropped, instead of making generalised rulings that impact the players’ primary source of earning,” said an official who didn’t want to be quoted.

Source : Economic Times

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