IPL 2020: BCCI’s decision to retain Chinese sponsors a pragmatic, rather than emotional step

  • Vedam Jaishankar
  • August 4th, 2020
  • 16:09:43 IST

In hindsight, Chinese mobile phone manufacturer Oppo’s decision to pull out of sponsorsorship of the Indian cricket team last year seems like a veritable, God-sent initiative. Their sponsorship right for five years was worth Rs 1,079 crore and was to stretch over 14 home series', 20 overseas series' and ICC events, including the Champions Trophy, World Cup and World T20.

Oppo was to pay BCCI Rs 4.61 crore per bilateral match and Rs 1.56 crore for an ICC event match. But within two years of signing the five-year deal, they opted to pull out and at the same time transferred the rights to online education platform Byju’s. The latter, which thus came on board in September 2019, has to discharge terms of the contract until 31 March 2022.

However, tellingly, Byju’s itself has investment from Chinese funding company Tencent.

In fact Gateway House, a Mumbai-based foreign policy think-tank had stated that China’s various companies had invested in 92 Indian startups, including in a majority of the 30 Indian unicorns (startups with valuation of over US$ 1 billion).

It is perhaps for this reason that the Indian Premier League (IPL) Governing Council and BCCI took a pragmatic, rather than an emotional decision, regarding Chinese sponsorship in the upcoming season.

But some organisations would have none of it.

The national co-convener of the Swadeshi Jagran Manch, an RSS affiliate, Ashwani Mahajan in a statement said: "The Board of Control for Cricket in India (BCCI) and the Indian Premier League (IPL) Governing Council have shown utter disrespect to the Indian soldiers killed by Chinese troops with its decision to hold the cricket league with its Chinese sponsors.

After the India-China clash in Galwan Valley, BCCI had stated that there would be a review of the IPL sponsors. Image: Twitter/ @IPL

IPL trophy. Image courtesy: Twitter/ @IPL

"At a time when the country is striving hard to make our economy free from Chinese dominance in the markets, the government is making all efforts to keep China out of our markets, this act of the IPL Governing Council is an aberration to the nation’s mood."

Simultaneously, the national general secretary of the Confederation of All India Traders (CAIT), Praveen Khandelwal remarked that, “The decision of the BCCI smacks of its lust for money in utter disregard of safety of the people and that too involving Chinese companies.”

The grim truth is that many Chinese investments are in companies that have an impact in many activities surrounding sport or everyday life. These include BigBasket, Byju’s, Delhivery, Dream 11, Flipkart, Hike, MakeMyTrip, Ola, Oyo, Paytm, Paytm Mall, PolicyBazaar, Quikr, Rivigo, Snapdeal, Swiggy, Uddan, Zomato, among others.

But of immediate concern to those who have trained their guns on IPL is the Chinese mobile company Vivo, which is the title sponsor with a five-year deal worth Rs 2,199 crore. The deal is to run this year and two more editions after this.

Vivo stepped in to rescue BCCI in 2015 when Pepsi pulled out its sponsorship following the spot-fixing scandal that had overtaken IPL. The Chinese company paid Rs 196 crore for 2016 and 2017 before it shelled out mega-bucks for the next five years, starting 2018.

The fact that it had tested the waters in 2016 and 2017 before offering a massive 450 percent hike in sponsorship money (Rs 440 crore per year) was proof that it liked what it got. This was not a charity offering but a pure business deal where Vivo got bang for the buck and IPL got a lot of mega bucks to help nurture, promote and drive Indian cricket.

In 2017, Vivo also splurged Rs 262 crore on kabaddi. This was a sum unheard of for any Indian sport outside cricket.

But Vivo believed that through these sponsorships it was gaining top-of-mind recall with India’s youth and that these vast sums were investments that would pay it rich dividends in the future.

Meanwhile IPL and BCCI were most certainly not complaining. They needed the money to promote the sport and their firm belief was that neither Chinese investments nor these products had been banned in India and as such their activities and involvement were legit.

In the aftermath of the Galwan Valley clash, the Indian government, while banning numerous Chinese Apps including TikTok, had made prior approval mandatory for FDI into India by a company of a country it shares land border with. This includes entities from China, Pakistan, Bangladesh, Nepal, Bhutan, Afghanistan, and Myanmar.

But unlike the other countries, Chinese companies also route funds into India through companies in Singapore, Hong Kong, Mauritius and as such these do not get recorded as Chinese investments.

In short while the Chinese may not be welcomed to build ports, airports or Belt and Road Initiative projects in India, they certainly are present in a plethora of other activities. Singling out the IPL at the eleventh hour when the Vivo money is critical to its success would be unfair. Better would be a concerted policy that would encompass all of India, including sports, culture, infrastructure and corporate.

Else what CAIT or SJM or others like them are indulging in can only be described as a knee-jerk reaction that rather than helping the cause would only end up in shooting Indian sport in the foot.

Doesn’t help the cause, does it?

Updated Date: August 04, 2020 16:09:43 IST

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