DLF Unlikely to Retain Title Sponsorship of IPL
By Community | April 27, 2012
India’s largest real estate developer, DLF, is unlikey to renew it’s title sponsorship of the Indian Premier League (IPL) folllowing an economic downturn in the real estate market and poor television ratings.
The industry executives and the officials from the Board of Control for Cricket in India said the contract expires at the end of the fifth season of the IPL in May.
DLF had won bids for Rs 40 crore ($7,625,583) per annum for 5 years at the time of inaugural edition of the IPL. The deal was worth Rs 200 crore ($38,127,917). “Although DLF will be getting the first right of refusal at higher sponsorship rate, it will be difficult for the company to manage an increase in the contract in the current scenario,” said a source close to the development.
Meanwhile, DLF’s executive director Rajeev Talwar said, “It depends on how they perceive the value. After the current season ends, we will get six months to decide. When the offers come in January, we will take a call.”
DLF is facing challenges on the debt and sales front like other real-estate companies. The real-estate company is also intending to sell various assets that include the Mumbai mill land and Aman Hotels to raise as much as Rs 7,500 crore ($1.5bn) by March 2013 to reduce the debt of Rs 22,750 crore ($4.30bn).
Meanwhile in the December quarter, the company saw a 45% fall in its net profit due to rising interest rates, commodity prices and slower home sales.
“With the macro environment continuing to remain unfavourable with high interest rates, commodity and labour cost inflation, it may take a few more quarters for the company to regain full momentum,” DLF said in a statement post Q3 earnings announcement.
After the 5th edition of the tournament ends, the Board of Control for Cricket will be excited to invite new sponsors and partnership proposals for the Twenty20 league. The agreements signed in 2008, has guaranteed revenue in excess of Rs 500 crore ($95,319,794). BCCI has also chosen ITC as a hotel partner and Kingfisher as the airline partner.
Touted as a money spinner, the world’s richest cricket league is finding the going tough in its fifth season. The advertisers are feeling that Indian Premier League will become an expensive property.
Meanwhile, some big sponsors like LG and Godrej preferred to stay away while Samsung, Micromax and Canon had to cut ad spends.
DLF or Delhi Lease & Finance is the largest commercial real estate developer in India. The company was founded by Raghuvendra Singh in 1946 and is based in New Delhi. DLF has residential colonies in Delhi such as Shivaji Park, Rajouri Garden, Krishna Nagar, Greater Kailash, Kailash Colony and Hauz Khas.