Lockdown impact: Cos seek to rework celebrity endorsement deals; cite losses of Rs 1,700 crore in Apr-Jun quarter

NEW DELHI: Mauled by the lockdown, companies with tightened budgets are seeking extension of celebrity endorsements and switching to digital only deals, while others are cutting down the time band of contracts, leading celebrity management firms and brands said.

They are also writing off 2-4 months citing a ‘blank period’ on account of the lockdown or reducing the 2-3 year durations to 8-10 months.

“The celebrity endorsement business faces a loss of Rs 1,500-1,700 crore in the April-June quarter on account of the lockdown,” said Manish Porwal, managing director of talent management firm Alchemist Marketing Solutions, which works with L’Oreal and Reliance Life among others said. The overall industry is estimated at close to Rs 14,000-crore.

“Many brands have requested extension of contract periods, with shoots and appearances at a complete standstill. A lot of brands are also re-looking at contracts to factor in digitalonly endorsements, which are more cost-effective as well,” said Krossover Entertainment managing director Vinita Bangard, who has worked on brand deals with Shah Rukh Khan and Priyanka Chopra.

Alchemist’s celebrity management arm Auntourage said in a new report, Celeb Biz 20 – the aftermath of Covid -19, that the celeb appearances market will fall as much as 70% year-on-year as brand congregations would be reduced to minimal while endorsement deals will shrink 20% by value this year.

The lower risk-taking ability of brands, reduced ad spends, increased accountability and faster fatigue in digital media will lead to the largest fall in usage of top celebs, the Auntourage report said.

“That could translate into a quick gain for next-level smaller celebrities who have a presence on social media. Smaller and niche celebrities, who appeal to different types of markets, would relatively benefit but bring the average deal costs down,” the report authored by Porwal along with Malaica Abreu and Upasana Zaveri of Alchemist, said.

The report by Auntorage said Instagram, TikTok and YouTube would be the top three influencer platforms. “Rapid increase of digital media, smaller-influence celebrities with shorter spans and e-appearances will be the new trends,” Porwal said.

Sports marketing firm Baseline Ventures has started an online show, Double Trouble, hosted by women cricketers Smriti Mandhana and Jemimah Rodrigues, featuring sports persons including PV Sindhu, Rohit Sharma and Sania Mirza, to maintain connect with consumers and fans.

“During such unprecedented circumstances, both brands and athletes are mindful of the fact that payments can be delayed or certain deliverables might get impacted. One has to take cognisance of this situation and plan deals accordingly,” said Baseline Ventures managing director, Tuhin Mishra.

The Auntorage report said lack of face time, sports and minimal stage events in the next two quarters and postponement of film releases will push lower the face value for most celebrities, bringing their popularity and equity down.

“With celebrities wanting to maintain their price but brands anticipating loss in value of deals, the short term would see major pauses and stalemates,” the report added.