In the last 1-2 months, we have seen how the relationship between India and China deteriorated due to border skirmishes. Anti-Chinese sentiments were in full spree across India and everyone in the social media was advocating not using Chinese items. The Indian Government took extreme steps banning China’s biggest video making app i.e. Tiktok and canceling BSNL’s 4G tender, where Chinese Giant Huawei was the equipment supplier.
However, when it comes to IPL, the governing council has decided to go ahead with VIVO, the Chinese mobile manufacturer as a title sponsor. Now let us see some stats to know why they can’t resist the VIVO and how this is good for shareholders of Chennai Super Kings, the unlisted share available in the unlisted market.
The fortune of BCCI and IPL owners changed dramatically in the year 2018, when Star Sports for broadcasting rights and VIVO for title sponsorship, has agreed to pay, ~16000 Crores, and ~2200 Crores, respectively for next 5 years i.e ( 2018-2022). That means every year BCCI and IPL will get ~3700 Crores from these two sponsors. Now with 8 IPL teams, this comes out to be ~460 Crores per team. 20% of this income goes to BCCI, so finally, every team gets ~370 Crores from these two sponsors only.
Boycotting VIVO with just 1 and a half months left for IPL 2020 season is very difficult because, at this present time where businesses are struggling to cope up due to COVID-19 impact, nobody will offer this much money for title sponsorship. As a shareholder of Chennai Super Kings, this is actually good news otherwise it would have impacted the revenue of franchise and so does the valuation in the unlisted market. The VIVO will find this as an excellent opportunity to increase its market share which has seen a dip in recent times due to negative sentiments.