New Delhi: Just days after he took over as the president of the Board of Control for Cricket in India (BCCI), Shashank Manohar has been handed his first major headache.

The title sponsor of the Indian Premier League (IPL), the BCCI’s flagship twenty20 tournament, PepsiCo Inc., has expressed its intention to withdraw its sponsorship of the league.

PepsiCo conveyed its decision to walk out of its five-year sponsorship deal through a notice. A BCCI official confirmed it saying, “Yes, we have received the notice. It has been passed on to the concerned people."

However, later on Friday, the two parties released a joint statement, confirming that they were in talks to settle the issue. It said, “BCCI and PepsiCo have had a longstanding cordial relationship and have been in discussions to work out a solution which addresses PepsiCo’s concerns. Both parties will share it when ready."

Pepsi had paid ₹ 396.8 crore or $71.77 million for IPL’s title sponsorship between 2013 and 2017.

The deal between the BCCI and PepsiCo has been in troubled waters for the last two years even since the betting scandal broke in 2013 after IPL season six, said a senior official close to the development at BCCI. “We want a clean sport and we have been saying that for two years. What is driving these discussions is how can we get the game cleaned. It will never be a decision driven by monetary concerns. When we started with IPL we had 10 teams, next season there might be 6 teams, but those things can be worked out," added the person cited above. A fresh leg of discussions between Pepsico and BCCI started a few months ago.

According to sports marketing experts, Pepsico decision is driven by economic of the deal.

“They have enjoyed the befit of the cheaper years. In the last two years they have to pay ₹ 90 and ₹ 100 crore, respectively. It was a flawed sponsorship deal and Pepsi over bid right in the beginning," said a sports marketing expert who declined to be quoted.

What further hurts Pepsi is the additional amount of ₹ 30 crore that they pay as beverage partner (for pouring rights) to all the franchises. “These were all three year deals that have now come to an end so Pepsi wants out."

The company, according to reports, had decided to end its association with the BCCI, largely because of issues that have brought “the game into disrepute"—in other words, the IPL betting and spot-fixing controversy and its aftermath.

The official cited above said Pepsi decided to end their sponsorship because “of their own interests" He added, “If they (Pepsi) really felt strongly about issues relating to disrepute, why did they wait for two years? They could have pulled the plug back then."

Earlier on Friday, IPL chairman Rajeev Shukla told the Press Trust of India that “the Pepsi deal was not a big issue" and that the BCCI was in talks with other sponsors as well to “settle the issue amicably". He said, “They have certain points and we are going to settle them amicably in the next meeting."

The issue is expected to come up for discussion when the BCCI convenes its working committee meeting in Mumbai on 18 October.

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