BCCI to issue fresh tenders for kit partner, base price to be slashed with a twist

As reported by InsideSport on 24th June, the Board of Cricket Control of India (BCCI) will be issuing fresh tenders next week for the apparel partners of the Indian team. As the incumbent partner Nike is not ready to renew the deal on the existing terms, the Indian board will be releasing the Request for Proposal (RFP) next week to identify the new kit / apparel partner for the Virat Kohli led Indian cricket team.

Also Read : Cricket Business : BCCI to go for fresh tenders as the kit deal with Nike ends in September

Team India kit partnership – Base Price Slashed by 31% claims a report

In these Covid19 times, BCCI is bracing up for first probable drop to its existing revenue stream. According to a report published by TOI, owing to to the disturbed and unsettled market, board has decided to slash the base price by almost 31% from the existing value of the NIKE deal.

The existing NIKE deal is valued at 87.34 lac per game along with other perks like royalty on sales and value adds like free kits worth 8-10 crore per annum. But according to the report BCCI in the upcoming RFP will reduce the base price to 61 lac per game from 87.34 lac.

But there is a catch.

The new RFP will divide the rights into three segments according to the report.
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’.

“This means, on one side BCCI is taking the current market downtrend into account by reducing the base price by 31% of the existing deal. But at the same time smartly has divided the rights portfolio into 3 segments so that they can unlock the real value for their asset. Its a smart move and will be interesting to see who bites the bullet”, said one of the sports marketing veteran

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.

NIKE’S 4 Year deal for Indian Jersey with BCCI is worth 370 Crores

According to the info with InsideSport, Nike had pledged Rs 370 crores to renew the kit sponsorship with the Indian team in 2016. As per the contract Nike pays 87.34 lac per game currently.

But due to the current economic downturn and continuously plummeting sales – Nike is not ready to commit the same amounts to BCCI for the next cycle. InsideSport has also reliably learnt from its sources in BCCI, that the brand has already communicated this to the Indian board.

Brand Nike struggling with Sales

Though Nike is yet to publicly announce the financial numbers for FY19 but according to reports the brand is struggling to keep up with others on sales front. In 2019, the brand decided to slash number of store in India to 100. During its peak in 2016 when the kit-partnership contract was weaved in with BCCI, Nike use to operate 350 stores in the country.

In terms of Sales, Nike is currently at number 3 position in India as per the last available financials. Puma is the current leader with sales of 1413 Cr in FY19 followed by Adidas. Nike in comparison is doing substantially less number on the sales front in India. Even at the global front Nike Global has shown huge decline in the numbers and had announced work-force cuts.