No tobacco, no alcohol: Will IPL 2025’s ad revenues take a hit?

The Union Health Ministry has once again directed the Indian Premier League (IPL) to ban all forms of tobacco and alcohol promotions, including surrogate advertising, during the professional Twenty20 cricket league organised by the Board of Cricket Control in India (BCCI). The directive covers ads at stadiums, IPL-related events, and national television broadcasts during matches.

In a letter to IPL chairman Arun Singh Dhumal, director general of health services Atul Goel has also urged sports bodies to discourage sportspersons and commentators from endorsing such products, directly or indirectly. Over the years, prominent figures such as Virat Kohli, Rohit Sharma, Kapil Dev, and Sunil Gavaskar have been linked to surrogate advertising.

"India ranks second globally in tobacco-related deaths, with nearly 1.4 million fatalities annually. Alcohol remains the most widely used psychoactive substance in the country," Goel said.

Read more: https://www.afaqs.com/news/advertising/from-virat-kohli-to-kapil-dev-cricketers-and-their-surrogate-brand-endorsements-8844463

The role of tobacco and alcohol in IPL advertising

Tobacco and alcohol brands have traditionally played a significant role in IPL advertising. According to TAM data, pan masala brands were among the top five advertising categories during the 2023 and 2024 IPL seasons. 

Reports suggest that the pan masala sector spent approximately Rs 350 crore on IPL 2024 ad placements.

Naresh Gupta, co-founder of the digital marketing agency Bang in the Middle, estimates that surrogate ads for pan masala and liquor contribute around 10-15% of the IPL’s ad revenue for broadcasters, with an even higher share in on-ground advertising and team sponsorships. 

He believes these brands should shift away from surrogate advertising, given the diverse media options available today.

In August 2024, the Union Health Ministry urged the BCCI and the Sports Authority of India (SAI) to take stricter measures against surrogate advertising in sports.

The impact on IPL’s revenue model

Gupta also raises concerns about the IPL’s Royal Challengers Bengaluru (RCB), which itself could be considered a surrogate for a liquor brand. While these regulatory changes will disrupt the IPL’s revenue model, he does not foresee an overall decline in ad revenue. 

Broadcasters and teams are expected to compensate by attracting new advertisers, with fintech, automotive, banking, insurance, and real estate sectors likely to increase their spending.

Read More: Cricket, the most attractive vehicle for surrogate advertising?

Navigating the sponsorship transition

Viren Vesuwala, lead of strategic partnerships and alliances at White Rivers Media, believes the absence of tobacco and alcohol brands could create significant revenue gaps for the 2025 season. The extent of the impact will depend on how swiftly alternative sponsors step in.

"A structured transition is key. Clear guidelines, consistent enforcement, and collaboration between regulators, IPL organisers, and media partners will be essential. A well-monitored framework and transparency in handling violations will help build trust and ensure a sustainable sponsorship model," he explains.

Vesuwala also highlights the challenge for teams with established deals in these sectors. However, he views the situation as an opportunity to attract brands from industries such as technology, fintech, gaming, e-commerce, and health-focused companies. 

These brands align more closely with the IPL’s family-friendly image, offering a fresh approach to team branding and fan engagement.

Franchise partners and broadcasters will need to adapt, using innovative strategies like integrated content marketing, interactive ads, and digital platform advancements such as augmented reality (AR). Franchises must develop creative sponsorship packages to attract emerging brands. 

For the affected tobacco and alcohol brands, this shift will necessitate alternative marketing strategies within regulatory limits.

"This transition could set a precedent for more ethical and value-driven sports marketing, shaping the future of brand sponsorships," Vesuwala adds.

The need for stronger regulations

Dr Sandeep Goyal, managing director of Rediffusion, questions why the government is merely advising against surrogate advertising rather than enforcing a direct ban.

"Why involve the IPL chairman instead of imposing an outright ban? If the intent is clear, why not prohibit these ads across all platforms, not just the IPL?" he asks.

Dr Goyal, who has been campaigning against surrogate advertising for eight years, believes such directives have limited impact without strict enforcement.

"The IPL chairman has no real authority over advertisements. He could simply argue that he doesn’t control what Star broadcasts and that his contract does not explicitly prohibit liquor ads," he explains.

From JioStar’s perspective, liquor and tobacco ads have already been factored into revenue calculations. If they are suddenly forced to drop them, Dr Goyal believes they might demand compensation.

While similar directives have been issued in the past, they have not been strictly followed. He argues that the government is making these announcements for optics rather than with genuine conviction. The only real solution, he suggests, is imposing prison sentences for violators.

"Right now, there is no real deterrent. At worst, companies face a small fine," he says.

Challenges in execution

Praful Akali, founder and managing director of Medulla Communications, believes the ban will create challenges for teams and sponsors at this late stage. However, the actual impact will depend on how the directive is enforced.

"The current letter lacks clarity on team sponsorships and jersey branding, particularly for surrogate products in non-alcoholic categories. Depending on how this is interpreted, the overall impact for this year might be manageable," he says.

Akali argues that if alcohol and tobacco advertising is to be banned, it should logically apply to surrogate categories as well. He finds the regulatory loophole problematic, as everyone seems to be ignoring it.

"That said, there was no need to introduce this at the last minute via a letter. If it has to be enforced, it should be done in a more structured and planned manner in the future," he says.