Oregon-based sports accessories major Nike, the official kit sponsor for the Indian cricket team, is believed to be reconsidering its strategy of sponsoring bats of top Indian cricketers.
According to a report in Times of India, the American multinational, which had joined up with India back in 2005, may stop sponsoring players’ bat as a measure to cut losses.
The company has already shut around 35 per cent of its stores in the country to cut losses, the report said.
Nike, at present is left with around 200 stores, the report claimed.
If Nike, the world's largest sportswear maker, decides to stop sponsoring the bats of crickets, cricketers like Axar Patel, Ajinkya Rahane, R Ashwin, Ravindra Jadeja and Parthiv Patel will be the biggest losers.
The report said that the company spends around Rs 60 crore per year to sponsor the Indian cricket team's kit and sponsoring bats of few cricketers is an added cost.
Companies spend anywhere between Rs 25 lakh and Rs 8 crore to sponsor a player’s bat. For instance, Virat Kohli, the skipper of Test team, who uses an MRF bat, gets around Rs 8 crore for putting a sticker on his bat whereas ODI captain MS Dhoni gets around Rs 6 crore to put a Spartan sticker on his bat.
In 2005, Nike had signed a $45 million (Rs 301crore) five-year deal with Indian cricket team. The agreement was later extended to include the 2011 World Cup. Shortly after India’s victory in the tournament, the company competed with an Adidas bid and re-upped with India for five additional years at more than $12 million (Rs 80 crore) per year.
A senior industry executive said that wrong marketing investments leading to poor return on investments has been a problem for Nike in India.
As part of its strategy, Nike is reducing its number of partners in the country and will be working with just three or four to run its operations.
“Earlier, it had around 20 partners and it has halved the number. Further consolidation will take place,” the executive was quoted as saying.