Two days after the government said it would introduce a Bill to ban tobacco advertisements, the cigarettes-to-hotels conglomerate ITC sent shock waves through the world of sports when it announced that it would pull out of all forms of sports sponsorship from April 1. 'In a constructive spirit and to avoid any ongoing controversy, ITC has decided to voluntarily withdraw from all sponsorship of sporting activities irrespective of the legal position on the subject,' said a statement from Virginia House, the headquarters of the Calcutta-based company. ITC said it had already initiated action to withdraw from the long-term sponsorship arrangements it has with various sports. Cricket is the biggest beneficiary of ITC funding - the company is the main sponsor of the Indian team. In golf, the country's highest prize-money tournament - the $300,000 Indian Open - is sponsored by ITC. It used to sponsor horse racing but withdrew last year. However, a Board of Control for Cricket in India (BCCI) source said ITC's contract stipulates that if the sponsorship was stopped by legislation, the company was obliged to pay the regular fee till a new sponsor was found. The series with Australia is scheduled to begin on February 27 in Mumbai. ITC gives the BCCI around Rs 35 lakh for each Test and Rs 32 lakh for each one-dayer. Sixty per cent of these amounts is given to the players by the board. ITC spends annually around Rs 13 crore on an average on the team assuming India plays six to eight Tests and 30 to 32 one-dayers a year. ITC's withdrawal immediately stoked the interest of other big-ticket sponsors like Coke and Pepsi. Coke spokesman Irfan Khan said: 'We are exploring the possibility of enhancing our sports sponsorship. It has always been associated with sports and young people. We are already sponsoring the cricket tournament in Sharjah.' Coke has been a big sponsor of cricket and was the official sponsor of the World Cup held in Britain in 1999. 'Everything will, however, depend on the level of funding required to fill the breach created by the exit of the present sponsors and who bid for the rights. We will first have to see how much money we will have to stump up and what sort of mileage we can get from it,' said Khan. The Pepsi spokesman was more reticent. 'It will all depend on my ad budget,' he said. Independent advertising consultant Arunabha Dasgupta said: 'There are a lot of people ready to put up the cash in sports, which is a credible medium for advertisers.' ITC said it would also progressively scale down its cigarette advertising, pending the passage of the legislation. The company spends about Rs 200 crore every year on advertisements through the media (print and television) and hoardings. Figures are difficult to come by, but industry estimates put the level of its sports-related ads and sponsorships at about Rs 100 crore. It spends another Rs 200 crore on a mix of gifts and commissions to dealers and consumers. ITC hoped that today's action would create the right climate for a constructive dialogue that will help develop appropriate content, rules and regulations to make the intended legislation equitable and implementable. Ad industry blues Today's decision will shake the foundations of the advertising industry in Calcutta, which has been hurt by the flight of companies to the other regions and has been heavily dependent on ITC. The cigarette giant uses three top-flight ad agencies - Hindustan Thomson Associates, Bates and Lintas - for its advertising campaign. Lintas is likely to be the worst hit, industry sources said. Lintas handles the media buying for ITC through its subsidiary Interactive Media; it also handles the account for cigarette brands like India Kings, Berkeley and Wills Sport apparel. HTA is the creative agency for the ads featuring brands like Classic, Wills Flake and Bristol. Bates handles the accounts for 555, Benson & Hedges and Gold Flake.