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 CURRENT ISSUE DECEMBER 23, 2002  

SPORTS: CRICKET WORLD CUP

Stumped

Off-the-field action hots up with the ICC taking legal action against companies participating in ambush marketing against the official sponsors of the World Cup

By Malini GOYAL

So you have just won the gift of your life: an all-expenses paid five-day holiday to South Africa and-the icing on the cake-tickets to the cricket World Cup. But before the celebratory cartwheeling, read the fine print. Check if the company that gave away the prize is an official sponsor of the World Cup. If not, then the trip of a lifetime could turn out to be just that in a very different way. The World Cup ticket could turn you into a criminal offender in South Africa and that means you may be slapped with a stiff financial penalty or be bundled out of the country straight from the airport or, worse still, you may end up in a South African jail.

This is not a doomsday scenario thought up to destroy the World Cup tourist trade but the possible fallout of a bitter corporate battle that has moved from the cricket field to the boardroom and into the law courts. The battle is over the right to carve up the big World Cup marketing pie and is being fought by companies, lawyers and cricket bodies.

On December 8, the International Cricket Council (ICC) put out advertisements in leading Indian dailies cautioning companies against ambush marketing. Companies that are not among its official sponsors but are offering free tickets to the World Cup, the ICC warned, would be penalised for violation of copyright. A day earlier, the United Cricket Board of South Africa issued a press release threatening lengthy jail sentences for individuals or companies participating in ambush marketing activities. It also said that the board had the rights to block the entry of unauthorised World Cup ticket holders.

The ICC has already taken initial legal action against three Indian companies-Britannia, HPCL and Philips. Legal heavyweights like Ram Jethmalani and Arun Jaitley took opposing sides in the first of these wrangles and opened a new chapter in cricket's corporate conflicts.

A free trip to the World Cup-touted as one of the most attractive purchase incentive for customers for the season-is now under the scanner. Companies of all shades-Britannia, Visa, ABN-Amro, Sahara India, BPCL, HPCL, Lee Cooper, Glaxo Smithkline-are offering free tickets for the event. But the Global Cricket Corporation (GCC) which bought the marketing rights of the World Cup for $550 million (Rs 2,640 crore) from the ICC is adamant about protecting its territory. Says Harish Thawani, co-chairman, World Sports Nimbus Pte, which is a part of the GCC: "World Cup tickets have two clear conditions-that they are not meant for commercial use and they are non-transferable. Any violation will be dealt with strongly."

THE GAME'S NEW RULES
The corporatisation of cricket is complete
1999 2002
For the first time the ICC claims title rights to the World Cup.
But boards signs a list of terms with the host nation, not the ICC.
Sponsor-protection exists but is neither all-pervasive nor strict.
For the first time ICC sells events for seven years.
ICC member boards consent to the rights sale and its clauses.
This has enabled ICC to enforce its contracts on member nations.

The ICC has had mixed luck. Earlier this month, Britannia won the first round of legal wrangling with Jethmalani batting for it and Jaitley for the ICC. The council's objection to the company's sales promos-"Britannia khao, World Cup jao", giving free tickets to customers-was set aside by the Delhi High Court. "We will go ahead with our scheme," says Sunil Alagh, MD, Britannia Industries Ltd. But Dahlia Sen-Oberoi, counsel, ICC Development (International) Ltd, clarifies, "Regardless of the enforceability of anti-ambush laws in India, they will be enforced in South Africa."

At the moment the Delhi High Court has ruled in favour of the ICC in its case against HPCL and has reserved judgement in the case between the ICC and Philips.This could just be the beginning of a protracted battle that corporate India may have to fight overseas as well. It promises to be particularly lengthy because the ICC is strongly backed by the country hosting the World Cup. Just last month, the South African Parliament enacted a new legislation making ambush marketing a criminal offence. Timed perfectly for the World Cup, "the Act will give unequalled protection to sponsors involved with selected events in South Africa", the ICC says in its quarterly newsletter.

Sen-Oberoi is non-committal about the ICC's next course of action in South Africa but World Cup sponsors will want to claim their pound of flesh any which way. One even claims that should a cricketer turn up at a party hosted by a non-official sponsor as part of a brand-building exercise during the World Cup, he could be imprisoned.

Ganesh Mahalingam, GM (marketing), LG India, is pleased: "We are not interested in refunds. We want the ICC to deliver the benefits that were promised in full."

While official sponsors are unrelenting, almost everyone agrees this is one of the most restrictive contract agreements ever enforced by a sports body in the world. Says Sanjay Lal, CEO and executive director, Percept D Mark: "The soccer World Cup and Olympics are all mature events and have strict anti-ambush guidelines. But none of them are as restrictive as the ICC's. The rights have not been packaged well." Thawani thunders, "Those who seek to derive mileage out of the Cup without paying for it are intellectual pirates."

CORPORATE CONCERNS
"We'll go ahead with the 'Britannia khao World Cup jao' offer."
Sunil Alagh, MD, Britannia Ind
"We can be flexible with players, not with other companies."
Atul Sobti, Sr VP, Hero Honda

The hard talk comes from the $550 million that ICC generated in 2000 by selling all commercial rights to its tournaments for seven years. This was the first time that the ICC has sold its events in a bunch (see chart) and at an exceptionally high premium. If Mahalingam is the most aggressive and vociferous among the official ICC sponsors, he believes he has good reason. His company shelled out around $28 million to land the seven-year "global partner" title for nine ICC tournaments. LG was one of the official sponsors of the 1999 World Cup. But the company's stakes and investments in the game have risen dramatically, probably five times, reckons Mahalingam.

That is true for the entire business of cricket in the country. The industry spend on the game has shot up-from Rs 40-50 crore in 1996 to an estimated Rs 1,000 crore for the 2003 World Cup. Today, more than 70 per cent of the ICC's income comes from Indian corporates. Atul Sobti, senior VP, marketing and sales, Hero Honda Motors, another global partner of the ICC, says, "This is one event that attracts viewers across region, religion, sex and income categories."

LG, one of the global sponsors, would pump in about Rs 40 crore into World Cup campaigns and promos. Beginning second week of January, every LG customer will be guaranteed a gift-which could range from a set of 10 Parker pens with pictures and signatures of 14 captains to sports watches with World Cup logos. The company is planning to give away two lakh pen sets and one lakh T-shirts, and will be sending 2,000 people to South Africa to watch the World Cup.

Hero Honda will invest a chunk of its Rs 120 crore annual marketing budget on the Cup. Besides sending 300 people to watch the games, it will unleash a series of on-ground and in-showroom campaigns called Win-the-Cup India in January . It will have showroom-on-wheels in 35 cities organising entertainment programmes.

THE ICC'S CONTRACTS CONUNDRUM
Double Trouble
TOUGH MEET: Ibrahim (left) and Dalmiya in Kolkata
"The International Cricket Council (ICC) is fighting fires on many fronts these days. The legal tug of war between the ICC and unofficial sponsors in the run-up to the World Cup in South Africa is only one of them. With less than 60 days to go for the Cup, there is one set of important documents still left unsigned. Without them the ICC's showpiece event is in danger of becoming a show that could go to pieces. Indian cricketers have not signed the ICC's player terms, raising objections to image rights and ambush marketing clauses.

The last round of the ICC contracts saga before the Champions Trophy in September pitted the ruling body against Indian players who refused to sign contracts until some concessions were made. This time, to add to the ICC's worries, the BCCI has joined ranks with its players. Of all cricketing nations, only India has not announced its shortlist of 30 probables for the World Cup.

At the latest meeting between the two sides in Kolkata, Justice Ahmed Ibrahim and Dave Richardson of the ICC met BCCI President Jagmohan Dalmiya and players' representative, leg-spinner Anil Kumble. The ICC was told that its terms continued to remain unacceptable. In order to contemplate signing them, the Indians would require that the image-marketing clauses be cut back from six months to two months after the event and that restrictions on rival advertising hold only for the duration of the World Cup-that too only on the cricket channel broadcasting the tournament live. "Significant progress" was announced after the meeting, with the ICC going back to its official sponsors to seek their views on the matter. It will be 10 days before another round of talking takes place but it would be fair to say that significant progress has definitely been made in annoying the ICC's official sponsors.

Outside the fortress of official sponsors, others too have stepped in. Philips is investing Rs 15 crore in marketing and advertising and giving away prizes worth Rs 10 crore, ranging from projection TVs, VCD players, portable stereo players and home appliances. Irrespective of their sponsorship status, companies across industries have loosened their purse strings to launch aggressive sales promos and mega advertising and marketing blitzkrieg around the World Cup.

But the ICC and its sponsors may spoil the party even before it begins. Reeling under the restrictive clauses and even more restrictive interpretations, a large number of corporates are back to their boardrooms-rethinking and rejigging their promos and campaigns to abide by the restrictive clauses.

Says Ravinder Zutshi, VP, sales, Samsung India: "Brand-building is a long-term exercise. Your brand image does not get affected if you are not there for a month." Philips' contest catch line reads "Philips ghar lao, South Africa jao," which alludes to the World Cup but doesn't say so specifically.

For most companies, the ICC's aggressive posturing is a far cry from the 1996 Cup. Pepsi managed a marketing coup with the "Nothing official about it" campaign at one-fourth the price of what official sponsors Coca-Cola shelled out for the sponsorship title.

From that free-for-all era to now where almost everything is under the exclusive domain of the sponsors, the transition for corporate India has been sudden and drastic. This entire experience may, however, mark the emergence of cricket marketing as a professionally-managed business rather than a laissez faire industry that allowed large corporations to run riot. While the fallout on the corporate India may be drastic, ICC officials admit that the number of suitors for the few remaining slots of sponsorship is growing. The ICC's celebrations have begun even before the World Cup started.

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