'Funding winter' forces companies to pull out of IPL sponsorship deals

In what is deemed a funding winter, many companies in the consumer internet sector that were previously major sponsors of the Indian Premier League (IPL) have pulled out from sponsoring and advertising this year.

According to a report in The Economic Times, owing to an overall reset in the technology sector, companies such as Byju's, Unacademy, PhonePe, Amazon Prime, Pristyn Care, Zepto, Ather Energy, Niyo and Spotify have decided to sit out of this edition of the popular domestic cricket league slated to start on March 31.

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Startups took centerstage in yesteryear's edition, where over 60 firms signed up as official on-ground and streaming partners, as well as sponsors for different franchises. According to the report, official broadcaster Star Sports had secured 14 sponsors, including eight startups.

CRED, PhonePe, Spotify, Swiggy Instamart, and Meesho were among the associate sponsors, while Dream11, Tata Neu, and Byju’s were co-presenting sponsors. Similarly, Disney+Hotstar, which used to hold the tournament's digital streaming rights, had 12 startups as advertisers, out of the total 18. Apart from this, over 40 startups had provided funding to various franchises in the league as well.

At the same time, newer companies have emerged to become official partners of the IPL, such as Dream11, Cred, Upstox, and Swiggy Instamart. According to reports, some new-economy companies are negotiating deals to buy spot advertising deals, rather than coming onboard as full-time sponsors.

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IPL sponsorship value has grown exponentially

Ever since its inception back in 2008, the value of title sponsorship in the league has grown exponentially. DLF who sponsored from the inaugural season till 2012 paid $5.3 million per year. While Pepsi, who came in next from 2013-2015 paid $10.5 million per year.

This was followed by Vivo which paid $13.3 million per year during 2016-2017, while the figures went up to $58.4 million for the same company during 2018-2019.

The subsequent season, which was engulfed by the pandemic, saw Dream11 pay $29.5 million, while Vivo in its comeback as sponsor in 2021 paid $58.4 million. The previous season for the league saw the baton being passed on to TATA, which paid $58.4 million.