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Nike wins Indian team kit sponsorhip with near Rs 2 billion bid; beats out Adidas, Reebok

MUMBAI: Just do it! That is certainly what the Board of Control for Cricket in India (BCCI) is managing to do with huge success as far as extracting value out of the Indian cricket team goes. In another major step to market the bat and ball game and make revenue from various sources, the BCCI announced today that it has awarded the rights for the official kit sponsorship to sports goods giant Nike. The winning bid: Rs 1.9666 billion.

The sponsorship enables Nike to get branding on the non leading arm of the cricketers. Nike along with Reebok will also be the official licensee for apparel merchandise for the BCCI. The deal runs from 1 January 2006 to 31 December 2010.

 

The BCCI opened the tender bids for the kit sponsors on 15 December 2005 and closed it on 19 December 2005 at 5 pm. Besides Nike, the other parties that made the shortlist were Adidas and Reebok.

Speaking on this BCCI VP Lalit Modi says, "Nike's bid was the highest at Rs 196.66 crores (1.9666 billion). Adidas bid Rs 127.50 crores (Rs1.275 billion). Reebok had bid Rs 119.48 crores (Rs 1.1948 billion). We had asked for a minimun guarantee of Rs 1 million from the bidders. This period covers 190 match days. Last time around Sahara had paid Rs 8.5 crores (Rs 85 million) for sponsorship of the non leading arm. If you make a like-to-like comparison, Nike paid Rs 96 crores (Rs 960 million) for the same this time. In addition Reliance Infocom, Reliance Energy, Slazenger and Admiran bought the tender."

 

 

"The parties bid for 60 test matches and 138 ODIs. To this we have added 50 ODIs. This deal is a landmark because it represents the first structured licensing programme that the BCCI has come out with. Coupled with the deal with Sahara for team sponsorship, the deal makes the Indian cricket team the most valuable team from a sponsorship point of view in the world. It will earn $27.12 million a year. The football club Juventus is second at $22.8 million. We were looking for a partner who could bring cutting edge innovation in apparel and footwear,"adds Modi.

Nike’s sports marketing director for the Asia Pacific region Peter Bratschi says, "This is truly a defining moment for Nike as this is our first step towards demonstrating our commitment to India and the game of cricket. We are thankful to BCCI for placing the trust in Nike and its innovative products, and for choosing us as their official kit sponsor for the Indian cricket team. We look forward to working with the team, and to creating the best performance products for the players.”

 

 

The parties were asked to quote on a few parameters for being an apparel licensee. A minimum royalty rate was fixed at nine per cent

Bidders were also asked to quote for the supply of free products for the BCCI. They were required to quote amounts year wise, that they thought they would need to spend for the BCCI. The BCCI had the option to pay for this and add it to the base compensation.

As far as the base compensation for the non-leading arm of the players shirt was concerned, the minimum price per ODI and test was fixed at Rs 1 million.

The kit will include travel gear, head gear, t-shirts, caps, socks, sunglasses and wristbands. Nike has a sports lab and takes inputs from players whenever it develops products. Nike will market replicas of the Indian team kit through its distribution network in India and abroad.

Modi further adds," The tender documents for the broadcast rights for India cricket will open next month. The BCCI is looking at other sponsorship opportunities as well. These too will be unveilled next month. The reports that DD will not be allowed to sell airtime on India cricket that airs on it are misleading. The BCCI will be coming out with a tender document inviting marketing agencies to bid for the right to sell airtime on DD. If DD's offer is the best then it can do the same."

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