Just as the Indian cricket team, along with its deep-pocketed endorsers, was reeling from the shock of an early exit from the 2007 World Cup, the country's Board of Control for Cricket (BCCI) announced plans to pull the plug on the Rs 180 crore (US$43.2 million) cricket endorsement market, ostensibly to curb "time-wasting" by Indian cricketers.
The regulations, if passed, will curtail the number of brands each player can endorse; the figure for which is still being debated. With the initial shock wearing down, the industry is waking up to the fact that the restrictions may indeed have some positive results.
The limited endorsement clause is expected to work favourably for top-tier advertisers such as Pepsi and Hutch, which will be able to corner the best talent for their brands. It is the smaller brands - such as Emami, Boroline and Brylcreem - which are likely to bear the brunt, although some analysts believe that even they might benefit from less endorser overlap.
"The sports marketing and endorsement business will grow as the players hitherto ignored by most brands will now become prized endorsers, especially for smaller brands," says Arjun Rao, business director, Havas Sports.
However, the industry is also expected to aggressively explore alternative routes that may offer greater media efficiency and, particularly, less risk. LG is said to be looking at golf and soccer, sports that remain niche in India. Nokia, meanwhile, is thought to favour the general entertainment category (GEC) as an alternative to cricket.
"It is time to change the plan a bit. We will find other ways to bolster our brand now that the TVRs for cricket matches will be lower than expected," says Devender Kishore, director, marketing, Nokia India.
But others are are less convinced that there are any vehicles which can deliver the same resonance as cricket. "Cricket offers an incremental reach that the GEC cannot," explains MindShare MD Gowthaman Ragothaman. "With a decline in ratings from both GEC and cricket, this incremental reach potential is going to be sorely missed by most advertisers."
It is worth noting that even before India's dismal performance at the World Cup, cricket spend - as a proportion of total endorsements - has been on a downward trend.
"In 1999, 90 per cent of endorsement money went into cricket. By 2003, it fell to between 50 to 60 per cent; now it's under 30 per cent and will drop to 10 per cent sooner than expected if the new norms come into play," says Anirban Blah, vice-president of Globosport, which represents national cricketers such as Zaheer Khan, Dinesh Karthik and Robin Uthappa.
Meanwhile, the World Cup saga is also expected to cause a significant correction in cricket pricing. "It's time to renegotiate advertising rates with broadcasters and the only way they can now move is downwards," says a source at a soft drink major.
This is causing broadcasters more than a little concern. Nimbus won the BCCI contract in 2006 for a whopping US$612 million, while ESPN shelled out $1.1 billion for the ICC rights for the next eight years. Advertising prices need to grow in tandem - possibly as high as $8,400 to $9,600 for a 10-second spot — if broadcasters are to make any money.
Regardless, one thing is unlikely to change, despite the doom and gloom forecast by the media - India's enduring love affair with cricket. "Cricket is as unpredictable as it comes. Its audience and marketers are just as unpredictable…one good season and much is forgiven and forgotten," says Nirvik Singh, president, Southeast Asia, Grey Global Group.
