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Additional information:
This case reviews the impact that PSL sponsorship had created for HBL, his marketing budgets, and the overall business forecasts and priorities before making the decision on whether to renew the sponsorship or not. In case he renewed the sponsorship, he needed to come up with a bid amount which would make sense internally as well as to PCB.
Short Summary:
Mr. Naveed Asghar, Chief Marketing Officer at Habib Bank Limited (HBL), the largest commercial bank of Pakistan, needed to make a decision on whether, and how much, to bid for the title sponsorship rights of Pakistan Super League (PSL). PSL was the T20 cricketing event of the Pakistan Cricket Board (PCB). HBL had bid for, and won, the original three-year title sponsorship of PSL, at a relatively low price, at the time when PSL was an unknown commodity. In three years’ time PSL had turned out to be a huge success followed by cricket lovers the world over. TV and other media ratings were far above expectations. For the next round of title sponsorship, PCB was expected to offer a ‘fair market price valuation’, based on research conducted by an independent sport research agency, to HBL. HBL had the first right of refusal to renew the sponsorship. In case of disagreement on price, open bidding would ensue. Competition for open bidding was expected to be fierce. Naveed had heard that many large consumer goods companies were planning to bid. He suspected that PCB would also be aware of this and this would jack up the market value calculations of PCB significantly. He needed to review the impact that PSL sponsorship had created for HBL, his marketing budgets, and the overall business forecasts and priorities before making the decision on whether to renew the sponsorship or not. In case he renewed the sponsorship, he needed to come up with a bid amount which would make sense internally as well as to PCB.
