The contractual agreement of BCCI with Vivo, sponsors of the Indian Premier League title, is about to be withdrawn ahead of the 2020 season. The Chinese mobile phone maker, which had been discussing the results with BCCI as recently as the last week, he found himself at the end of a backlash on social media after the Governing Council meeting, he decided to stick with his sponsors for IPL 2020. This outrage has its roots in diplomatic and border tension between India and China.

Neither BCCI nor Vivo has confirmed the development. Senior franchise officials have confirmed to Cricbuzz that development has not been officially communicated to them and have instructed BCCI to develop a contingency plan, if necessary. It is still unclear if the division could be for just one year or more.

Vivo’s withdrawal, a setback to IPL

Vivo’s withdrawal at 11 am is a severe blow to the IPL and its franchises in an already difficult financial climate amid the pandemic. Vivo retained the IPL Title Sponsorship Agreement in 2017 with a winning bid of INR 2.199 crore for five seasons (2018-2022).

It represented a massive jump of 454% in the title contracts concluded in the 2012-17 cycle. It meant that BCCI would receive approximately INR 440 crore per season from the IPL, which it will now have to recover.

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Franchises, closely monitor developments as they increase their pre-season financial planning. The Royal Challengers Bangalore, for example, may already lose an approximate INR 35 crore in entry revenue with the tournament moving to the United Arab Emirates and likely played in empty spots.

Under the revised (in 2018) revenue-sharing agreement between BCCI and IPL franchise owners, teams would receive 50% of the revenue from core rights, including broadcast, title, and other sponsorship deals reached by the board.

So roughly INR 220 million rupees from the title rights agreement would be divided into eight teams, equivalent to average participation of INR 25 million rupees per season for a franchise. Since the teams have to incur additional expenses to fly to the UAE and establish their base there, the franchises are anxiously waiting to see if the BCCI can make up for this loss with a new deal.

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