Live Issue: Pepsi and the title sponsorship of IPL

PepsiCo ended its five-year sponsorship of the Indian Premier League prematurely. Mobile company Vivo has stepped in to replace the FMCG major as title sponsor for the next two years, and the game will go on.

 

According to multiple news reports, PepsiCo pulled out citing ‘disrepute’ the game had come into. And yes, the IPL has had its fair share of controversy. But was there more than just ‘disrepute’ on the minds of the decision makers for the pull out? And how had the brand leveraged its sponsorship in the last three years?

 

Hiren Pandit, COO, TransStadia, says it’s a matter of the return on investment not being as per the company’s expectations. He explains, “The pull-out happened pretty late. There were controversies prior to this point too. Somewhere they (Pepsi) would have evaluated their return on investment and felt it wasn’t worth the money. Therefore they looked at this as an opportunity and used this as a way to get out. Otherwise when this ruckus started the pull-out would have happened.”

 

And Pandit isn’t alone in thinking so. Subhash Kamath, CEO and managing partner, BBH India, says, “There has to be more to it than just pulling out due to the allegations. There are controversies in ODI and other forms of cricket too, but the game continues to exist. I think there are more reasons – one of which could be RoI not being as per expectations. Lance Armstrong being a cheat doesn’t make the Tour de France an illegal sport, and similarly with Ben Johnson and the Olympics.”

 

Lloyd Mathias, marketing director, consumer PCs, Asia Pacific and Japan, HP, who believes that Pepsi had a good run while it was title sponsor of the IPL, has two points of view on the issue.

He says, “Some of the negativity on the whole IPL that was unearthed in the last two months – the two teams being banned and the overall number of games coming down, that has definitely had an impact on Pepsi’s decision. And then the possibility of some of the big players like Mahendra Singh Dhoni, Suresh Raina and Ravindra Jadeja etc. missing would have also been on the brand’s mind. Secondly, they have built up an association over the past few years and have got most of their returns.”

 

Alpana Parida, president, DY Works, believes that Pepsi has done well to opt out, with her own rationale. She explains, “The tipping point (for Pepsi exiting the IPL) could be the controversies. But I think it’s a smart decision to get out of it now. Pepsi stood for generation next, and if the game of the future is football, it might make sense for them to invest in the game.”

 

Kiran Khalap, co-founder, Chlorophyll, notes that Pepsi did well during its tenure as the lead sponsor as it reinvented its communication every year. But he too believes that disrepute wasn’t the main reason, and a change of strategy maybe the reason. He surmises, “When I look at how sponsorship is working around the world, it could be about losing an opportunity like the IPL to create eyeballs in a different manner. Pepsi could be doing or wanting to do something like a Red Bull, which gets involved in the athlete’s growth in a personalised way rather than an opportunity to catch the sport only with the fans. They might want to shift their focus from just the fans, to fans plus the player and plus the team, by getting involved in the growth of a personality.”