 | « Back to article | Print this article |
The BCCI top brass will meet officials of the sports management firm IMG on Monday to seek details of the financial dealings during suspended IPL Commissioner Lalit Modi's tenure.
IMG conducts the Indian Premier League and recently hit the headlines for being part of Modi's alleged plans of starting a rebel Twenty20 league in England.
The firm would be represented by its senior vice president Andrew Whiteblood and legal experts Paul Manning and John Loffhagen.
They are scheduled to meet BCCI President Shashank Manohar and secretary N Srinivasan at the BCCI's headquarters and also expected to be present are interim IPL chairman Chirayu Amin and his advisor Bharat Patel.
The meeting has been convened for the IMG officials to apprise the top Board officials on all matters relating to IPL, including the awarding of the global broadcast rights to Multi Screen Media-World Sports Group, since its conception, according to sources.
The meeting comes less than 48 hours after Modi responded on Saturday to the BCCI's show cause notice on allegations of financial irregularities and bid riggings related to the T20 League with a voluminous reply running into over 10,000 pages.
In January, 2008 the IPL was put on board with the conduct of bidding for eight city-based franchisees for which invitations to tenders were issued in December the previous year.
The successful bidders on January 24, 2008 for the cities of Delhi, Mumbai, Chennai, Bangalore, Mohali,Jaipur, Hyderabad and Kolkata were GMR Holdings ($84 million), RIL Pvt Ltd ($111.9 m), India Cements Ltd ($91 m), UB Group ($111.6 m), Preity Zinta/Ness Wadia, Karan Paul/Mohit Burman ($76m), Emerging Media ($67 m), The Deccan Chronicle ($107.01m) and Shah Rukh Khan/Juhi Chawla/Jay Mehta ($75.09 m) respectively.
Ten days prior to the franchisee bidding, the global media rights were sold to Sony-WSG consortium for a ten-year period for $1.026 billion that included a commitment of $108 million towards promotions.
The original deal that was later re-negotiated to a whopping Rs 8,200-crore nine-year deal with the same MSM (previously Sony)-WSG consortium one year later in an out-of-court settlement after BCCI cancelled Sony's bid for breaking contractual clauses.
On March 15, 2009 BCCI ended its previously signed contract with MSM and on the same day entered into an exclusive new contract with Mauritius-based WSG, which was challenged by MSM in the court.
The court proceedings were dropped after the out-of-court settlement was reached which is now under a cloud because of a facilitation fee of Rs 435 crore given by MSM to WSG.
In a media statement on April 23 this year, the Singapore-based MSM said its aim in the new commercial negotiation was two-fold.
The first was to secure the rights that had been unilaterally terminated and for the entire 9-year period keeping BCCI unaffected by paying the same amount to the Board as contracted by WSG Mauritius, it said.
"It was MSM's clear position that to secure its business interests, the broadcasting rights agreement should be a direct contract with the BCCI, rather than as a sub-license under an agreement with WSG Mauritius, which had these rights," as per the agreement with BCCI dated March 15, 2009.
To facilitate MSM's condition for a direct contract with BCCI, WSG Mauritius agreed to give up its broadcast rights for the Indian subcontinent in favour of MSM, thus paving the way for BCCI and MSM to enter into a contract directly. In consideration for this, MSM agreed to pay WSG Mauritius a facilitation fee.
MSM further detailed the Rs 425 crore given to WSG as "Facilitation Fee" contained.
1. Original option fee of $25 million (Rs 115 crore approximately) to extend the rights to years 6 till 10.
2. An additional fee over the nine years of the contract of Rs.310 crore to compensate WSG Mauritius for returning its rights for IPL season 2-10 to BCCI in favour of MSM and were necessary if MSM was to secure the rights to IPL season 2-10.
3. The potential rating incentive at the end of year 5 of $35 million (Rs.160 crore) under the agreement dated January 21, 2008 was eliminated, and as a consequence of these commercial negotiations the net incremental amount attributable to WSG Mauritius giving up its IPL Indian subcontinent rights is Rs.150 crore.
In 2008, the IPL also contracted top 80 players as per the International Cricket Council rankings and held the first players' auction in February 2008 where Mahendra Singh Dhoni fetched the highest price.
In addition to the marketing benefits that accrue to IPL franchisees, each franchisee was promised a share of the central as well as local revenues.
Out of central revenues the franchisees were to get 80 per cent of TV revenues in the first five years and 60 per cent from the sixth to tenth years as well as 60 per cent of sponsorship revenues for all ten years.
They were to retain 100 per cent of local revenues (Gate revenues, franchisee shirt sponsorship, local sponsorship, licensing programme, uniform merchandising, hospitality and premium seating, match-day concessions and promotions, franchise media platforms.
The IMG officials would be explaining all these details to the BCCI bigwigs who, till now, had given a free hand to Modi to handle most matters relating to IPL.
BCCI president Manohar conceded at a press conference on April 26 soon after the BCCI suspended Modi that on hindsight the enormous powers given to one person was a mistake.
Kochi franchise CEO K T Keshav is also scheduled to meet board officials on Tuesday.
Kochi franchise was bought for $333.3 million by Rendezvous Sports World and the Pune franchise was bought for $370 million by Sahara Adventure Group in March this year.