The Income Tax Department has issued a notice to the Indian cricket team’s sponsor company ‘Dream 11’ to deposit tax of approximately Rs 17 thousand crores.
Demanding such a large amount of tax, ‘Dream 11’ challenged this notice in the Bombay High Court. Share prices of ‘Dream 11’ fell after the news of Karachi’s notice. It should be noted that the central government has levied 28 percent tax on online gambling and casinos etc.
Income tax officials said that because Dream 11’s affiliates were running gambling services, those companies would have to pay 28 percent tax on their gross income. The ‘Dream 11’ company recently released a new jersey of the Indian cricket team with a new logo.
After the tax notice received by ‘Dream 11’, many users commented on social media and wrote that this is not the first time that the company sponsoring the Indian cricket team has run into trouble.
What is the status of previous sponsors?
After sponsoring the Indian cricket team in the last fifteen years, the companies have fallen on bad times several times.
The company ‘Sahara India’, which sponsored the cricket team for a long time, has now gone bankrupt. The owner of the company had to go to jail on the charge of cheating the customers by hiding the real figures.
Similarly, the ‘Star Sports’ channel also sponsored the Indian cricket team for a long time. At that time, they made the biggest bid in the history of cricket and won the biggest rights to broadcast cricket matches.
But then Star Sports collapsed.
The Chinese mobile company ‘Oppo’ also sponsored the Indian cricket team for some time, but after India’s relations with China deteriorated, boycotting of Chinese goods started in India, due to which the situation of this company has also deteriorated.
During this period, another company ‘BYJU’S’ entered the field of cricket sponsorship with great enthusiasm. Initially, the company was growing very fast and Bollywood actor Shah Rukh Khan was its brand ambassador.
It was later revealed that the company had shown assets many times higher than the actual value.
This company is now in dire straits.
Now the new sponsor company of the cricket team ‘Dream 11’ has received a tax notice of several thousand crore rupees. After that, their shares are also falling.
Companies that take risks when there is no money
Cricket is very popular in India and national team cricketers are their heroes to common people.
Big companies in India are willing to pay huge sums of money to make these athletes their brand ambassadors for advertisements.
Sports analyst Jaswinder Sidhu says, “It is worth noting that the companies we are talking about are paying cricketers more than the market value for their advertisements.”
“Their understanding is that if you associate with any cricketer, that company gets instant publicity and it also makes it easier to collect money from the market, but after some time it is realized that the money spent on the cricketer and cricket was too much. And it is in line with the market values. It wasn’t.”
He says, “The entire market has changed after the Covid pandemic. Many companies have failed to understand this. Because of this, companies that invested heavily in cricket and cricketers have gone bankrupt.”
Why companies make cricketers brand ambassadors?
Famous sports journalist Pradeep Magazine says, “Every brand wants their products to meet the expectations of the common man. They make film actors their brand ambassadors and use cricketers for advertisements.”
He says, “Cricket stars, be it Virat Kohli, Dhoni or Tendulkar…are big names. Companies think that if they advertise their products, their products will sell more but it turns out that many companies are not that capable.” .”
The magazine says, “Companies take risks. Cricketers charge huge fees. Top cricketers take crores to become brand ambassadors. The initial investment is huge and the benefits are not immediate.”
He says, “If a company is not financially viable, it risks going under. Big companies like Samsung, LG and Paytm have been successful. Half the companies don’t go under because there is no harm in making cricket brand ambassadors. In contrast, those who don’t have that much money and are Companies that take risks are doomed.”
Big companies use famous Indian cricketers as well as foreign players to promote their products. These advertisements are very popular among the public and being associated with cricketers also increases their brand value.
Only a few top film stars can match cricketers in advertisements.
Indian players are the highest earning players in the world of cricket. The Board of Control for Cricket in India (BCCI) is the richest cricket board in the world.
Cricket popularity and advertising market
“Cricket is the most popular sport in India and investing money in advertising on cricketers and cricket is definitely worth it,” says Neeru Bhatia, sports editor of the weekly magazine The Week.
She says that the company’s collapse has nothing to do with cricket and cricketers. Companies fail due to internal reasons.
She says, “Women’s Premier League of cricket is still new. When it started, there was no need to approach anyone for sponsorship. A large number of companies came forward to invest money.”
“As popular as cricket is, so is the demand for its advertising and it continues to grow,” she says.