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IPL 'disrepute': what's the real reason behind Pepsi's pull-out?

Jaideep Ghosh | Updated on: 9 October 2015, 20:12 IST

The decision

  • Pepsi has been IPL\'s title sponsor since the 2013 season
  • It has decided to pull out of the deal, citing the league\'s \'disrepute\'

The suspicion

  • Pepsi stuck with the IPL through its most scandalous phase
  • While the betting-fixing cases raged on, the soft drink giant showed no signs of backing off

More in the story

  • The real reasons behind Pepsi\'s pull-out
  • The options in front of the BCCI

The irony shouldn't be missed. A company whose products aren't allowed within a mile of any decent school in the country is trying to get out of a deal on the grounds of 'disrepute'.

As the title sponsor, Pepsi was one of the flag-bearers of the Indian Premier League. But the company had its own share of issues with the Indian psyche when widespread reports of pesticides in the drink led to major scandals and an equally major public relations exercise.

But through advertising and its association with the IPL, the American multinational recovered whatever ground it had lost to eternal rivals, Coca Cola, and is by far the bigger seller again in India.

Which is why the news of its impending withdrawal from the IPL is significant. What isn't clear yet is why.

More than just disrepute

We've heard such lectures before. Many politicians, business houses and assorted former and present cricketers and administrators have mouthed niceties about how the game needs to cleaned, how the guilty need to be punished and how the game was above all the wrongdoings.

But no one ever quit because he thought it was all too much. Some, sponsored by Pepsi, even drank Coke out of clear, brand-free glasses. Talk about conflicts of interest.

So this moralistic stand by the soft drink giant is mystifying, in terms of the timing.

The BCCI has just got a new president in Shashank Manohar. The old firm of N Srinivasan and Lalit Modi, such friends when the moolah was flowing in, fell out when power overtook money, and are now out of the picture

Srinivasan's son-in-law Gurunath Meiyappan, the Chennai Super Kings 'enthusiast', and Rajasthan Royals co-owner Raj Kundra have been nailed to the wall for betting. The two franchises have been pushed towards extinction by the legal authorities.

But even through this mess, the IPL was held and Pepsi held firm. There were grumblings, as there would have been be with any multinational which has primary interests abroad. But Pepsi didn't leave then.

Now Srinivasan is out. Modi is on a wanted list. And Pepsi leaves. Coincidence? Could be.

It could also be that there are indications of a major rough and tumble ahead for the IPL. Manohar has threatened to wield the stick with impunity. That would indeed be a situation not too many companies would like to find themselves in.

Doing business with the BCCI

Therein lies another little conspiracy theory. According to reports on 9 October, Pepsi had written to IPL COO Sundar Raman about pulling out. Yes, the same Raman who himself is under the microscope.

Undoubtedly charismatic, Raman can also be extremely arrogant and downright rude, as his fracas with former India medium-pacer Sunil Valson in Delhi a few years ago would attest to.

He is also a man who was supposedly going to face the music when the excrement hit the ventilation. But just the fact that he is still around proves that not much has really changed with the IPL.

Pepsi has been IPL's title sponsor for the last three seasons, since DLF's five-year deal ended

All said and done one, the real reason has to be money, with a dash of all the other stuff to add to the fine soup.

Being in business with BCCI isn't fun. It will charge you the moon and give you a 'take it or leave it' exit clause. Many companies have come to grief trying to meet the burgeoning demands that BCCI makes on them with every passing year. Millions of dollars are pumped into deals, and if you are the title sponsor, that translates into many millions over the years.

The current business scenario isn't good. Markets are oscillating alarmingly and the stocks and assets of a lot of companies are tottering, if not actually falling down.

Pepsi is already down around Rs 396 crore in the deal, and will absolutely not put in another rupee.

That, combined with the transitions in the profile of both the BCCI and the IPL, would give enough reasons for the companies in question to think again.

Add to that the very convenient handles of trying to look holy and proper in the face of 'disrepute', which is pinching much more now financially.

Impact on Indian cricket

So, Pepsi's dil maange no more. Good time to bug out and cut the losses, since one never knows what may come up if the IPL continues.

It is unlikely that Pepsi will reconsider, unless offered some serious rebate in the amount of money to be pumped in. It has BCCI by the short and curlies on this one, and knows it.

Unfortunately for the BCCI, it can't shrug this off and say, "next!" The next one will be a real test. Cricket or no cricket.

This move could well be a significant one for the future of cricket in India. It is doubtful if the market or its reputation promises too much money for IPL in the near future. This could well lead to at least a toning down of the whole event. Quite frankly, that wouldn't necessarily be a bad thing.

First published: 9 October 2015, 20:12 IST
Jaideep Ghosh @jd0893

The author has been a sports journalist for over 20 years. He has worked with leading newspapers like The Statesman, Hindustan Times and The Tribune, as well as portals like espnstar.com