IPL pullout: Pepsi facing own financial woes

• Top BCCI officials felt that Pepsi's decision was more to do with its "own financial problems" than the controversy surrounding Indian Premier League
• Pepsi had paid Rs 396 crore for the five-year IPL title sponsorship in 2012, almost double of what DLF had paid for the previous five-year period  

Indian Premier League (IPL), which has seen its image take a beating after the 2013 spot-fixing scandal, suffered another blow on Friday with

title sponsor PepsiCo expressing its intent of pulling out to the Indian cricket board (BCCI). Beverage giant PepsiCo had bagged the five-year IPL title sponsorship contract in 2012 by paying Rs 396 crore and is now said to be keen to pull out of the deal due to issues that have brought the game into "disrepute."

The danger of losing a major sponsor is a big challenge for new BCCI president Shashank Manohar. Pepsi had paid Rs 396 crore for the five-year IPL title sponsorship in 2012, almost double of what DLF had paid for the previous five-year period. This was considered to be significantly high despite the eyeballs that the league was throwing up. What's more, the soft drink market itself has slowed down over last year, hurting major players, including Pepsi.

Pepsi had reportedly decided to pull out of the IPL deal last year itself, but Board of Control for Cricket in India (BCCI) managed to convince them to stay on for another year. However, the decision of the Supreme Court-appointed Justice Lodha Committee to suspend Rajasthan Royals (RR) and Chennai Super Kings (CSK) seems to have firmed up the multinational's mind about terminating its association with the board.

An embarrassed BCCI said in a statement that "steps will be taken to address PepsiCo's concerns," which was basically aimed at telling the world that it was still trying to salvage the deal and convince the sponsor to stay on. A joint statement of BCCI and Pepsi later said; "BCCI and PepsiCo have had a long-standing cordial relationship and have been in discussions to work out a solution which addresses PepsiCo's concerns. Both parties will share it when ready."

IPL chairman Rajeev Shukla tried to play down the crisis, when contacted. "They have been a long-time partner.They'll keep associating with the IPL as one of the sponsors, if not the title sponsor. We're addressing their concerns, and they're addressing ours. We'll resolve all issues in an amicable manner," IPL chairman Rajiv Shukla told TOI.

Top BCCI and IPL officials, on conditions of anonymity, however said that Pepsi was trying to wriggle out of the contract. "Firstly, it has nothing to do with the 2013 IPL spot fixing scandal. At the moment, they're concerned about the future of the IPL - whether it'll be a 6, 8, 10 or 12-team tournament. Secondly, they're not satisfied with the publicity that they're getting out of the event vis-a-vis the other sponsors," he said. "They've to pay us Rs 90-100 crores every year, which isn't a small amount."

The matter is now set to be on top of the agenda of BCCI's working committee, which will meet in Mumbai on October 18.

Top board officials, however, felt that Pepsi's decision was more to do with its "own financial problems" than the controversy surrounding the league. "It's a sham. They have sponsored two IPL editions since the scandal broke out. I think they're facing financial difficulties of their own. When we met them in Delhi some time back, they never gave an indication about this. In fact, we had a healthy discussion with their chairman and CEO for India region, D Shivakumar, about our future plans," a top BCCI and IPL official told TOI.

Chetan Desai, BCCI's marketing committee head, was confident that there would be no dearth of sponsors for the IPL in the future. "We would appreciate Pepsi to be there, but nobody is indispensable. Their pull out may give an opportunity for someone else to be associated with the IPL," he added.