Early India exit costs sponsors
2007-03-29 10:27
New Delhi - The stunning exits of Pakistan and India from the Cricket World Cup has left one of the game's biggest sponsors reviewing its future in the sport.
Giants such as Pepsi have had to rethink marketing campaigns centred around the teams, Indian advertisers are demanding cut-price television spots and in Pakistan the ad industry reckons losses will run into millions of dollars.
"We are sunk," said Delhi-based advertising executive Rajmohan Singh.
"No one wants to advertise any more. Is there a World Cup going on? Where? My figures don't show that."
South Korea's LG Electronics said it was unsure if it would remain a global partner of the International Cricket Council (ICC) when sponsorship contracts are renegotiated later this year.
LG, which jumped on the cricket bandwagon seven years ago to boost sales in the lucrative Indian market, said its priorities had changed.
"Our requirements were different when we signed up with cricket seven years ago," said LG's Indian spokesperson Girish Rao.
"Today, we have lot of visibility being the number two brand in the Indian market. But a final decision will be taken by our parent company."
India, the 1983 World Cup winners and 2003 finalists, failed to advance to the 2007 version's Super Eights round after losing two of their three games in the preliminary stage.
Pakistan, winners in 1992, went out at the hands of minnows Ireland in one of the sport's biggest shocks.
Five ICC sponsors - LG, Pepsi, Hutch, Hero Honda and Indian Oil - focus their cricket advertising on India, where passion for the sport is a sponsors' dream.
The ICC has not revealed its new partners after selling global media rights for the next eight years to the Singapore-based ESPN-Star television network for an estimated $1.1bn.
The deal takes effect after this World Cup and covers 18 ICC tournaments, including the World Cup in 2011 in South Asia and in 2015 in Australia and New Zealand.
Cricket business insiders say that ESPN-Star would struggle to recover the investment if sponsors such as LG withdrew.
Sony Entertainment Television, which paid a reported $300m to beam the 2007 World Cup and other ICC tournaments to India over the past seven years, did not even bid for the new rights.
"We did not think it would have been a profitable deal," said its head Kunal Dasgupta, who is already struggling to prevent advertisers from pulling out of this World Cup.
The Indian Broadcasting Foundation, which protects the interests of the TV networks, had to step in when advertisers asked Sony Entertainment Television to renegotiate rates because of falling viewing figures as India and Pakistan returned home.
"It is a commercial contract and has to be honoured," a foundation official, Naresh Chahal, said.
"When India reached the final in 2003, did Sony ask advertisers to pay a higher amount on sealed deals?"
Sony is braced for losses as it charged $6 000 for a 10-second spot for India matches and only $2 200 for games not featuring India.
US soft drinks giant Pepsi, like many other companies, has withdrawn costly World Cup-specific advertisements targeting the Indian team.
"In light of India's performance there will be some short-term changes in advertising," said Pepsi India's marketing director Punita Lal. "But we have a long-term commitment with cricket which will continue."
The head of the Pakistan Advertising Association, Masood Hashmi, estimated losses there at "billions of Pakistani rupees, maybe two to three billion".
"Advertising companies have launched schemes featuring Pakistani players worth millions of rupees but the big drop in viewership of the World Cup has had a negative impact," Hashmi added.
Many campaigns and commercials have had to be redesigned, while some on TV channels and in the print media have been stopped outright, he said.
"It's certainly a loss for us as some companies have withdrawn campaigns from programmes because they featured players like Inzamam-ul-Haq or Shahid Afridi," said Ather Viqar Azeem, a producer at private HUM television.
However, Yusuf Baig Mirza, head of the private Pakistani sports channel GEO Super, said it had not lost as many viewers as feared.
"People even watched Bangladesh play Bermuda because they liked to see India knocked out," he added. "Similarly, they would like to see an Asian team like Sri Lanka win the Cup."