What is sponsorship? A Fan’s Guide to How Sponsorship Works

Every fan wants the ball to smash the car window. But here’s a twist. The car being there is the reason why your fav team is able to pay its players. Does that make you question it — how a TATA Sierra sitting at the boundary pays for Virat Kohli’s salary?

In this blog: What Is Sponsorship? – How Do Brands Benefit From Sponsorship? – How Are Sponsorships Valued? – Types of Sponsorship in IPL

So What Is Sponsorship?

“A commercial agreement where two parties are involved — a sponsor who provides support, and a party who receives it in exchange for visibility and rights. That sounded like something straight from a law module, right? But it’s actually very simple. Sponsorship is just a deal between two parties. One has money and wants visibility — that’s the sponsor. The other has an audience and needs funding — that’s the sponsored. The sponsor pays; the sponsored delivers eyeballs.

It would be easier to understand if you approached it from a marketing point of view. A sponsor is someone who wants people to know about themselves; it can be a brand, organisation, etc. The other party has the viewership or attention from the public; it can be any event like IPL, NBA or other shows like Shark Tank, etc. But the events can’t make enough money from ticket sales, so the brands pay them in cash or kind, and the events promote the organisation.

So the sponsored party gets the money and resources required to deliver high value entertainment. But what does the sponsor actually get in return? Does that ring a bell? Let’s find out.”

How Does a Brand Actually Benefit From IPL Sponsorship?

Brands spend millions on brand awareness and audience reach. Sponsorship takes it to a different level. A brand sponsoring an event, buys a lot more than just exposure; they also buy association with the event and brand-building opportunities. The association helps the brands shape public perception around them.

People take pride in the teams, players or events they love. When people spot a logo on their favourite player’s jersey, it builds trust faster than any TV advertisement ever could. Both the sponsor and the sponsored grow through association. Some of the famous examples are Nike’s signing of Michael Jordon in 1984, which created the billion-dollar Air Jordan line; Coca-Cola’s association with the Olympics has lasted over a century.

So, brands get access to their potential customers, and the sponsored parties get the required funds and resources to keep the event going. The case of MJ’s signing with Nike is a classic example of why, in the initial days, it was believed that brands that share common attributes with the event tend to generate stronger returns from their sponsorship investment.

Here are some benefits of sponsorship to sponsors:

1. Brand Visibility:

The most immediate benefit of sponsorship is simple. Brands want high reach and exposure. So, they put the logo of their brands where eyeballs are already fixed. It’s not advertising — it’s presence. And in marketing, presence is everything.

2. Return on Investment:

For a brand, the return generated by a sponsorship is the addition of financial and brand value created over the course of the agreement. But there is a catch: unlike other marketing opportunities, sponsorship offers a lot of choices, such as title sponsors, associate sponsors, front-of-jersey deals and brand mentions, etc. A brand can choose the opportunity that satisfies their needs under their fixed budget.

For example, a medium-sized brand doesn’t necessarily need to pay like Coca-Cola. Instead, they negotiate exactly the exposure that fits their budget and target audience, and pay only for that. This level of personalisation is provided by very few advertising channels.

3. Positive Reputation for the brand:

For people, events like sports, reality shows and even community events are a matter of pride. Associating with these events means supporting something they love, which has a positive effect on people’s perspective. For example, supporting Cricket in India and Australia, Football in Brazil, American Football in the USA, etc.

A more specific example can be the association of the TATA Group with IPL. It positions them as a brand that invests in something that all of India is obsessed with. In the case of IPL, the reach is already 500 million+ people, and the high intensity of a T20 match makes people emotionally invested. That amount of reputational benefit adds more brand value than any other traditional ad.

4. Lead Generation:

The purpose of sponsorship is not just brand awareness. It also sets people on the path to becoming future customers. Think about the last time you were at an event and you were offered a free snack or water bottle in return for a login. That’s called lead generation.

A lead is simply a potential customer who has shown interest in your brand. Sponsorship offers very exclusive access to such leads. Fantasy gaming platforms like Dream11 and My11Circle have built their entire user base on exactly this kind of IPL activation.

5. Sales:

Many brands develop algorithms that can use the attributes shared by people to manufacture personalised offers in realtime which boosts sales. Prime examples are quick commerce platforms like Swiggy, Zomato, etc.

Most sponsorship deals come with an exclusivity clause that prevents the sponsored party from signing a direct rival of the existing sponsor. Brands use this as an opportunity to generate sales when people are in a high-intensity, high-adrenaline, and spending environment.

Smart sponsors also use this window to conduct live market research; they launch new products, test packaging, or gather real consumer feedback in one of the most engaged environments money can buy.

The sales or marketing funnel is a continuous process. The massive reach and exposure leveraged from sponsorship create awareness of the brand among its potential customer base, which eventually results in conversions or sales.

As brands have leveraged sports because of their unmatched reach, individual sponsorship is being seen as the future of sports sponsorship because of the unparalleled following of individuals across the globe. While a fan, despite their preferences, will always admire individual players like Lionel Messi or Virat Kohli and that unbounded devotion makes them such a centre of attraction for brand integration.

But there is still a question, right? How do they determine if the deal is worth the dollar it is being paid? Which brings us to our next section: How are sponsorships valued?

How are sponsorships valued?

In sports sponsorship, the traditional method of valuation provided a very strong base for evaluation of the rates at which sponsorships were being sold, but now it doesn’t seem to be the case.

How Is Sponsorship Valued? — The Three-Layer Methodology

1. The traditional approach:

The traditional approach heavily relied on data like audience reach and duration of exposure, which were very similar to how TV ads are calculated. But sponsorships are not ads, and that is why fan perception data was introduced in the methodology.

2. Brand Impact Score:

The brand impact score brings the quality of brand exposure into play. It covers five different factors that affect how visible the brand is, which are:

• Solus (degree of clutter)

When brand logos render on the screen, they don’t deliver the same value with each appearance. That is why the brand impact score is measured.

Solus ensure that individual disclosure is valued the most, and as the competition for eyeballs increases, the value of exposure follows a downward curve.

• Duration of exposure

The value of the sponsorship is directly proportional to the time span for which it is disclosed to a certain customer base.

• Frequency of appearances

The frequency of appearance is also a major factor when calculating the price of a sponsorship because repetition builds recall, and recall builds purchase intent.

• Size of the brand

If the logo of your brand appears larger than the logos of other brands on the screen, then you will get better visibility than those brands.

• Location on screen

The location of your brand appearing on the screen is the most underrated factor of the lot. It directly affects how sponsorships are valued. A top-of-screen appearance is a totally different deal from one that appears at the bottom.

Everything comes at a price, and these five factors together determine exactly what that price is.

3. BIS-X — Adding Perception to Visibility

If not first, then brand perception is the second most important goal for a brand opting for sponsorship. BIS-X adds it in the most efficient way to date. It applies a perception-based adjustment across six metrics:

• Brand Health (Satisfaction, Quality, Reputation, Value)
• Impression (general positivity or negativity)
• Buzz (volume and tone of conversations)

A brand with strong consumer sentiment gets a higher valuation uplift than one with neutral or negative perception, even if they both have received identical screen time.

The Result: Net Sponsorship Value (NSV-X)

Here’s how it all comes together:

1. Exposure is captured across TV, digital streaming, press, social media, and news
2. BIS adjusts the Gross Advertising Value down to reflect real quality of exposure
3. BIS-X applies a perception-based uplift for brands with strong health metrics

The final number

Net Sponsorship Value — is the most accurate picture of what a sponsorship deal is truly worth. For IPL, where both viewership scale and fan passion are off the charts, NSV-X numbers consistently justify even the most eye-watering deals — like Tata’s ₹2,500 crore commitment.

Sponsorships in IPL — The Ones That Actually Matter

Here are the types of sponsorships you should actually care about:

1.Title Sponsors:

People have deep emotional connections to the IPL’s title sponsors, from DLF in the league’s early days to PEPSI from 2013, Vivo from 2016 to 2019, and Dream11 stepping in for the COVID-affected 2020 season. They all carry countless memories for separate generations of fans, which creates association, which is why it covers almost 50% of the total sponsorship revenue share. TATA Group signed this deal in 2022 for the 2022-27 cycle, paying 2,500 crore (approximately $300 million)

2.Official Partners:

Official partners sit one tier below the title sponsor; they don’t get their name before “IPL”, but they get significant visibility across broadcasts, on-ground activations, and digital platforms throughout the season.

You’ve seen them without realising it. That CEAT logo that flashes every time a boundary is scored is an official partner deal. Angel One’s branding across digital scoreboards and My11Circle’s presence across broadcast graphics are examples of official partner activations.

These deals typically account for 25-30% of the league’s central sponsorship revenue, making them the second-largest commercial tier in the IPL ecosystem. They’re not the headline act, but they’re everywhere you look.

3. Team/Jersey Sponsorship:

Every logo you see on a player’s jersey, helmet, or kit belongs to a team sponsor who negotiated independently with each of the franchises, not the BCCI. A front-of-chest deal is the most premium real estate. Dream11 alone sponsored five IPL team jerseys. These deals typically account for 20-25% of a franchise’s total commercial revenue.

4. Ground Sponsorship:

Look beyond the players during a match; you will notice the boundary boards, pitch-name rights, and sight screens. They are all separate sponsorship deals. DBS Bank, Zomato, and Jio have all activated ground-level sponsorships in recent IPL seasons. These deals are the most affordable entry point into IPL sponsorship, typically the smallest revenue tier but with guaranteed broadcast visibility.

So this is it, one last thing before you go. 60% of the total central sponsorship income gets distributed among all 10 IPL franchises equally. But here’s what makes it even more fascinating: the least decorated teams like Delhi Capitals and Punjab Kings are still valued at over ₹1,000 crore (approximately $103 million). Sponsorship is only one piece of that puzzle. Since this is a topic of another blog, thank you for reading. Stay tuned for our next blog, where we break down exactly how IPL teams make money and why even the trophy-less ones are worth a fortune.

If this blog made you see IPL differently, share it with a fellow fan who thinks IPL is just about cricket.