BCCI's deal with Nike coming to an end; 31% dip in base price likely

MUMBAI: The BCCI is in the middle of putting together a Request for Proposal (RFP) to be brought out next week as Indian cricket's clothing rights deal with athletic footwear and apparel giant Nike comes to an end this September.
The existing four-year deal between Nike and BCCI began in 2016 when the sports apparel giant renewed its already 10-year long association with Indian cricket yet again and offered Rs 88 lac per match along with a separate minimum guarantee of around Rs six crore per year for a total of approximate 220 matches over four years.
That aside, a 15% royalty and barter products worth around Rs 8-10 crore were part of the earlier rights deal.
However, given the recent volatile markets, further disturbed because of Covid-19, an already "worried" BCCI is busy structuring the RFP in a way that could see the base (reserve) price for logo rights scale down by almost 31%, if the Minimum Guarantee clause in the existing Nike deal is to be kept aside.
A healthy market would have, in an ideal scenario, seen the BCCI peg the base (reserve) price at Rs 88 lac, apropos of the Minimum Guarantee, or at least that is industry perspective floating around in general right now. TOI understands that the BCCI's base (reserve) price for the new rights deal on offer could be placed around Rs 61 lac with major changes being proposed to the RFP process.
"They could be looking at the new RFP with around Rs 61 lac as base price but there's more to it. The RFP is going to be divided into three buckets - a) The main logo sponsor with rights to sell replicas of the Team India jersey; b) Apparel partner with rights to sell fan merchandise; c) Combination of bucket 'a' & bucket 'b'.
The BCCI's new RFP is likely to offer the buying of rights for the next three years as the ICC's Future Tours Program (FTP) runs out in 2023. The RFP is likely to be brought out coming Tuesday.
Nike, for the record, hasn't publicly said yet that they are not interested in renewing the deal nor listed out any terms otherwise.
Tweaking of ICC guidelines
In doing so, they (BCCI) could be looking at tweaking a basic rule under the ICC guidelines, citing the Covid situation," say those in the know.
ICC guidelines stipulate that the main logo sponsor of any national jersey must mandatorily be a sports kit manufacturer (which Nike is) too, a policy that remains in place for most governing bodies across sports anywhere in the world. "However, in this market derailed by Covid, the BCCI may cite the inability of enough contenders to bid and therefore tweak the mandatory requirement of 'kit manufacturer', thus allowing multiple players to enter the fray but keep some aesthetics in place - like, for instance, ensuring that only an apparel manufacturer's logo (not necessarily sports apparel) goes on the jersey," sources add.
What's more valuable: Team India jersey or ground rights?
There are stakeholders in Indian cricket who have paid close to double the value for rights in the past that are perceived to be of far lesser value than the Team India jersey, by industry estimates.
For instance, Dream 11, Ambuja Cement and Hyundai Motors had bid at a base price of Rs 65 lac in September 2019 to come on board as BCCI's official partners and collectively pay BCCI close to Rs 2.6 crore per match by way of a four-year deal, almost a 72% premium to the previous rights deal.
In that, Dream 11 alone pays around Rs 1.1 crore per match for ground sponsorship. Those rights are only for matches played in India.
"Now, they (Dream 11) have to live with the fact that whoever comes on board as the logo sponsor for the Team India jersey (as kit sponsor), with the tweaked ICC rule in play, will likely pay just about 65 to 70% of Dream 11's rights value to grab the jersey space for all cricket India plays at home and abroad. Digest that," sources say.
Industry executives say these sponsors would've have restructured their business plans last year had they been given a thorough picture of the sponsorship landscape over the next 12 months. "Basically, Team India jersey space is going to be cheaper than ground rights for matches in India?" ask those tracking developments.