Deepika Padukone has been recently signed a deal to endorse
Axis Bank. I haven’t seen any mainstream Hindi film actress endorsing a bank.
This fact itself is testimony to her track record and the trust factor she
brings in. Her last four films have collected over a billion rupees each at the
box office.
Thus, it makes sense to have this young lady as the brand
ambassador. It augers well for the connect the brand may want to establish with
the youth of India.
I was interested to know how much they have paid Deepika
Padukone. Even after extensive google search, I couldn’t figure this out. What
I did figure though is about a brand paying her about 6 Crore {60 million}
Indian Rupees for a year of association.
I have assumed that she gets paid the same amount for
endorsing other brands as well. The first advertisement of what looks like a
campaign is on air.
If the advertisement is out now, it would have been
conceptualized a month or two ago. Scripting, approvals, ideas, dates of
Deepika Padukone and allied activities ought to be aligned before the final
product is shot and cleared. Hence, it may be safe to assume that Deepika and
Axis Bank may have entered into this agreement in February or even earlier. I
am assuming it was in the last week of January, 2014.
If you look at the history of Hindi cinema, actresses have
ruled for a decade at the most and then new faces become the reigning queens.
While I am sure this is changing and the audience and film-makers are not
afraid of viewing and presenting newer themes/ concepts respectively, a very
good performer like Deepika would still have to be content with newer and
younger actresses coming in and taking over at some point of time.
This is not just because she is an actress. Most brands want
to retain their youth connect hence we see a Ranbir replacing Shahrukh Khan and
Kohli filling in Sachin’s shoes for brands. It is natural and understandable. Brands have to keep finding newer icons
irrespective of the legend of the previous ones.
Coming back to Deepika and Axis Bank now. As I said earlier,
let’s assume that Deepika and Axis Bank decided to associate in the last week
of January, 2014.
Instead of a deal in cash and cash equivalents { I am
assuming it is an all cash deal as I haven’t read about any stock options being
given to her}, if she had opted for some stock options, then it is worth noting
the value it would have been today.
I am making an assumption that the law allows the brand to
pay the celebrity for endorsements in stock options. So, let’s say Deepika had
opted for 3 Crores in cash and the rest in stocks. If she had been allotted
these stocks on 31st January, 2014, the number of shares of Axis
Bank, she would have had are around 26812 shares {3 Crore/1118.9}.
The value of these 26812 shares at yesterday’s closing price
of 50031280 {a little over 5 Crores}. Considering the fact that actors may not
necessarily have a great shelf life and monthly income guarantee, should
Deepika and other actors/ sportspersons opt for stock options?
A counter argument could be that the same stocks may also
slide down and erode in value. However, with brands as robust as Axis Bank or
other leading banks and FMCG companies, while they may lose steam on the
markets at some points in time, they are known to do well in the long run.
Has Deepika missed a sweeter deal with Axis Bank? Was there
a better {stock} Option {if she hasn’t considered it already}?
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