The JSW Group, an $11 billion conglomerate with interests ranging from steel to power, has shelved plans to buy a team in the Indian Premier League (IPL), citing the “negative aura” of the corruption-hit Twenty20 tournament.
In a $100 million deal, JSW, controlled by billionaire Sajjan Jindal, was in talks with British beverages group Diageo Plc to buy unit United Spirits Ltd’s stake in the Royal Challengers Bangalore cricket team,
However, Parth Jindal, son of Sajjan Jindal and the family member overseeing the conglomerate’s sports interests, told Reuters that developments this week in a lengthy corruption probe had made the brand risk of owning a team “too high”, ans that a cricket deal was off the table for now.
I think it’s a ‘No’ at this point of time, purely based on the whole negative aura that has been generated,” he said. “We don’t want our brand to be associated with a league that is so tainted at the moment.
— Parth Jindal, JSW
The IPL, has an estimated brand value of $3.5 billion, however the tournament has been dogged by corruption allegations for years. This week, a panel set up the Supreme Court of India suspended for two years two of the eight teams playing in the league, and raised doubts about sponsorship revenues.
Analysts say that approximately 90 percent of the advertisement money targeted at sports in India goes to cricket. The Economic Times reported that PepsiCo , the title sponsor of the league, may not bid for the rights again after its five-year, $62 million contract expires in 2017. PepsiCo did not respond to requests for comment.
However, the prospects of the league are too attractive for some companies to ignore.
The Videocon Group, a conglomerate, that sponsors the Mumbai Indians franchise, is interested in bidding for another IPL team to boost its brand.
With some teams going out of the fray, it’s a good time to look for bargain deals. These controversies are not good, but the fact is cricket remains a hugely popular game.
– Venugopal Dhoot, Videocon owner
(With Reuters inputs)
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