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Ajay S Shankar
September 1, 2009
Sharad Pawar, the former BCCI president, has questioned the Indian board's decision to terminate IMG's services for the IPL and warned that the unilateral move would put the board and its stakeholders' investments in jeopardy. Pawar's concerns have been echoed by Sony, the IPL's broadcasters, which said in a separate letter that the timing of the decision was awkward for them and would have far-reaching implications on the next season.
The two letters - Cricinfo has copies of both - could prove to be embarrassing to Shashank Manohar, the board president, and N Srinivasan, the secretary who wrote to IMG on Friday informing them of the contract termination. Pawar, who wrote the letter to Manohar in his capacity as president of the Mumbai Cricket Association, is a powerful federal minister and still enjoys a significant say in Indian cricket affairs; he is also the ICC vice-president and takes over the top job next year. Sony has signed a TV rights deal reported to be worth US$ 1.6 billion with IPL for the telecast rights over the next nine years.
In his letter dated August 30, Pawar said he was disturbed by the BCCI's decision, which could show it in bad light in the public eye. Man Jit Singh, the chief executive of Multi Screen Media Private Ltd (MSM), which broadcasts IPL under the Sony umbrella, conveyed his concerns in a letter - dated August 31 - addressed to Lalit Modi, the IPL chairman. Cricinfo has confirmed the contents of both letters with an IPL governing council member. When contacted, Modi and a Sony spokesperson declined to comment on the letters.
The IPL governing council is scheduled to meet in Mumbai on Wednesday, with Manohar and Srinivasan expected to attend. Seven out of the eight IPL franchises - except Chennai, which is owned by Srinivasan - have over the last three days written strongly-worded letters to the BCCI and Pawar questioning the IMG ouster, which they claimed would devalue and dilute the league.
"I am very disturbed to hear about the termination of IMG contract by the honorary secretary, BCCI," Pawar wrote in his letter. "Reading the contents of the termination, I feel that this unilateral move by the BCCI will put the BCCI in jeopardy. Not only will this lead to a prolonged legal battle but it will also show us in bad light in public."
Pawar said the 10-year contract with IMG, which he said was an integral part of IPL, was approved at all "appropriate levels" during his tenure as board president till September 2008. "I always believed that the Board believes in continuity and undoing what was done consciously and in the best interests of Indian cricket is neither desirable nor appropriate," Pawar wrote.
"After season one of the IPL and its tremendous success, the IPL revenues went up beyond our expectations and as a result the payout to IMG was going to be quite large. We all had at that time agreed to renegotiate the contract with IMG as a result of this tremendous success. Mr Shrinivasan (sic) along with (the) IPL chairman was entrusted with the task of doing the same. They successfully concluded their negotiations and the same was tabled by the honorary secretary in the finance committee and whose minutes were thereby approved by the working committee on the 3rd of January 2009.
"I am told that this matter was again raised at the last Governing Council meeting of the IPL and some members again suggested that we should come to a suitable arrangement with IMG. Further I understand issues regarding IPL were also being raised at the last working committee of the BCCI and you rightly told the members that the working committee was not the right forum for the same and such they should raise the same at the next AGM.
"In IPL there are many stakeholders and as such anything we do that may jeopardize their investments will show BCCI in a bad light. With the overwhelming success of the IPL it is our duty to protect not only BCCI but also its stakeholders. I got some calls and letters from stakeholders. I am attaching a letter which I received from Shri Mukesh Ambani. I want to bring on record my views and I hope you and the BCCI will take the right decision in the overall interest of BCCI."
The letter from Singh, the MSM CEO, warns that potential litigation over the issue would increase uncertainty over the tournament. "Unless this disagreement is resolved expeditiously, it is likely to have far-reaching repercussions on the smooth and efficient conduct of the next IPL season; the timing could not have come at a more awkward time for us as we are now in the market selling broadcast sponsorships," he wrote.
Singh said IMG had done an "exceedingly competent job" for the IPL and added: "While we do understand that the final decision on a service provider is a matter for the BCCI; however with the next season of the IPL only a few months away we believe it would be injudicious to experiment with a new agency at this critical juncture. Given our concerns we hope you will lay out your plans at the earliest so that we in turn can respond to the concerns of our stakeholders."
On Friday, Srinivasan had claimed in his letter to IMG that their fee was disproportionate to the services rendered. IMG played a key role in conceptualising the IPL and implementing it, including drafting the Indian and foreign players' contracts, putting the logistics in place and managing the day-to-day running of the tournament. The BCCI claimed to have paid IMG Rs 42.92 crore (US$ 9.54 million approx) for the inaugural IPL edition, with the fee for the second edition said to be around Rs 33 crore ($6.7 million approx).
In a reply to the BCCI's letter, Andrew Wildblood, a senior vice-president at the firm, has said that there was no grounds for termination. He also pointed out that IMG had a legally binding 10-year agreement with the BCCI and that it would "reserve all of our rights and remedies at law under and in respect of the contract".
Reports suggest that IMG's initial contract with the BCCI, which was signed in September 2007, stipulated a commission-based payment of 10% of the board's revenue. The contract was subsequently negotiated to a fixed retainer payment of roughly Rs 33 crore but this was objected to by some members of the BCCI's working committee, who are keen that the Indian board take over the running of the IPL entirely.
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