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Lever, Star strike deal; HLL ads to be back on air soon

MUMBAI: The country's largest advertiser Hindustan Lever Ltd (HLL) and lead broadcaster Star India have resolved their differences over ad rates. Though the deal is still to be inked, the two have reached in-principle agreement, Star confirmed to indiantelevision.com.

Attempts to contact Mindshare Fulcrum (which manages the HLL account) head Vikram Sakhuja for his comment on the development were to no avail.

 

In the end, it looks as if the double burden of not having a presence on the most powerful cable and satellite network, Star as well as on the terrestrial network Doordarshan, proved too much for HLL.

The sticking point till now on the issue of the eight per cent service tax has also been resolved in Star's favour, it is learnt. Star officials have not commented on this aspect however, except to say that the negotiations that had been going on since 1 August have finally reached a satisfactory conclusion.

As reported in the Economic Times, it was over the service tax issue that HLL lost the sponsorship rights to the India-New Zealand-Australia cricket series starting 8 October. When DD first signed the deal with the sponsors, unlike other private channels, it was exempt from service tax. But in late July, the government issued a circular that henceforth Prasar Bharti will also be subjected to the tax with retrospective effect from 1 April.

DD, which has exclusive telecast rights of the series for India, immediately directed its three main sponsors — Pepsi, Hero Honda and Lever — and five associate sponsors — Perfetti, Castrol, Maruti, Pidilite and LG — to cough up the eight per cent service tax over and above the Rs 42.5 million and Rs 32 million that the main sponsors and the primary sponsors, respectively, had individually paid.

While others paid up, HLL refused to play ball. It was after this that DD cancelled HLL’s sponsorship rights.

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