IPL news June 25, 2013

Sahara stalemate could continue till September

It's been more than a month since Sahara India pulled their franchise Pune Warriors out of the IPL and, according to insiders from both Sahara and the BCCI, the stalemate is likely to continue till September, when the board convenes for an annual general meeting. It is believed that the reason for the delay is that the Sahara issue has been overridden by the recent spot-fixing controversy, the fall-out of which led to a change in the BCCI top management with the president stepping aside till the probe panel completes its investigations.

Despite Sahara's public announcement of its quitting towards the end of the IPL, five weeks hence, the company hasn't communicated its decision to the BCCI officially.

"As of now, the stalemate continues. Saharashri (Subrata Roy) has made it clear in his interviews that the new BCCI management may result in Sahara continuing to be a part of the IPL," says a senior Sahara functionary. "So the discussions are on at the moment, and nothing has been finalised yet."

The franchise had pulled out in May over financial differences with the BCCI stemming from the valuation of the annual franchise fee it has to pay. Since their inception into the IPL in 2011, Sahara and BCCI have been at loggerheads over the former's annual franchise fees of Rs 170 crore, the highest in the IPL.

Sahara had been demanding that the franchise fee from their original agreement should be recalculated proportionately since the minimum matches per year have been reduced to 14 from the 18 promised to them. As a result, both the parties had agreed to initiate arbitration procedures but the process hasn't yet started due to their disagreement over judges for the arbitration process.

According to IPL insiders, Sahara were unhappy when the Hyderabad franchise (formerly Deccan Chargers) was resold before the 2013 season to the Sun Group for an annual consideration of Rs 86 crore, almost half of Sahara's annual fees. As a result, Sahara withheld its annual franchise fee, which resulted in the BCCI encashing the bank guarantee.

The franchise agreement terms non-payment of franchise fees as an "irremediable breach". It could result in the franchise's termination without the need of serving a 30-day termination notice. The franchise agreement states that 30% of the annual payment has to be paid "on or before 2 January" every year. And the remaining 70% should be paid "on the date of the first match in the League in each such year".

"Either party may terminate this Agreement with immediate effect by written notice if the other party commits or permits an irremediable breach of this Agreement or if it is the subject of an Insolvency Event," the franchise agreement says.

In the past, the BCCI has taken action against defaulting franchises, including Rajasthan Royals, Kings XI Punjab and Kochi Tuskers Kerala. However, after encashing Sahara's bank guarantee, the board seems to be buying time for now.

"There is no reason for the board to act in haste. In fact, we would like to continue our association with all the team owners. If the problems are amicably resolved, there is no reason for us to take the inevitable step," a BCCI insider said.

The reason for the board's guarded stance has nothing to do with Sahara being the title sponsors of the Indian team. Sahara stated it would continue its sponsorship till the end of December 2013, when the contract expires. What's stalling the BCCI is that due to its internal crisis, nobody seems willing to take drastic measures.

"In such a fragile environment, nobody wants to push for taking tough calls," another insider said. "Who will be responsible in case a drastic step like terminating Sahara backfires in the court?"

For the first time in its history, the BCCI's working committee had asked its president Srinivasan to step aside till the probe against his son-in-law Gurunath Meiyappan and the IPL team that he owns - Chennai Super Kings - is complete. Let alone the legality of the appointment as an interim chief (Jagmohan Dalmiya), the legal status of the working committee meeting that ratified the decision is under question. If any of the BCCI members take the legal recourse, all these decisions - and those that have followed including the appointments of the incumbent secretary and treasurer - may turn void.

In such an insecure environment, virtually every member is buying time till the annual general meeting (AGM) and hoping that both the probes constituted to examine the alleged wrongdoings of the players, teams and team owners would have concluded by September.

Depending on the developments over the next three months, the BCCI AGM may see the return of Srinivasan as the BCCI president for another year, or see him pitted against Shashank Manohar, if the anti-Srinivasan lobby manages to convince the former president, Manohar, to return to the BCCI fold in a presidential election. But the third possibility - that of the current management continuing in case the probe commission, working without a deadline, hasn't finished its work - is dreaded by many BCCI members.

"While it may suit a certain group of officials, to a large extent, it will create plenty of problems, especially with the conduct of the IPL," says a senior BCCI member. "We will have to decide whether to terminate Sahara and the two tainted teams (Rajasthan Royals and Super Kings), discuss possible replacements and most importantly, start gearing up for the big auction (in 2014) smoothly to detract sponsors from backing out. All this would need security for the decision-makers."

If the pace at which the probe commission has gone about its work over the last few weeks is an indication, one fears that it might only submit its findings sometime next year.

Amol Karhadkar is a correspondent at ESPNcricinfo

Comments have now been closed for this article

  • Thyagu5432 on June 26, 2013, 9:35 GMT

    It is very obvious that the franchisees don't make any money from IPL. If the owners have a successful business running, then they can use this as a vehicle to increase the branding of their business and hence earn more money (franchisee earning money indirectly). But if the owners business is in trouble, they are stuck both ways. That is what happened to Deccan chargers owners and that is what is happening to Sahara now. If Sahara's main business doesn't recover, in the interest of IPL and in the interest of Pune Warrior players, the franchise has to be bought out by somebody else.

  • kc69 on July 1, 2013, 21:36 GMT

    Tell me what did Pune Warriors Franchise help IPL or their own fans and sponsors with respect to performance. Its better Sahara withdraws and IPL gets back to the original 8 teams that it started with in 2008. At least it will reduce some load of the players(even though organizers will lose a little money).

  • TNAmarkFromIndia on June 25, 2013, 18:21 GMT

    Sahara will most probably not return to the IPL unless the franchise fees are reduced by about $150 million. If the team was to be sold, I'm sure it would go for half the price that Sahara bought the team for. The Pune Warriors was a horribly mismanaged franchise anyway so I hope Sahara does not return to the IPL.

  • Thyagu5432 on June 26, 2013, 9:35 GMT

    It is very obvious that the franchisees don't make any money from IPL. If the owners have a successful business running, then they can use this as a vehicle to increase the branding of their business and hence earn more money (franchisee earning money indirectly). But if the owners business is in trouble, they are stuck both ways. That is what happened to Deccan chargers owners and that is what is happening to Sahara now. If Sahara's main business doesn't recover, in the interest of IPL and in the interest of Pune Warrior players, the franchise has to be bought out by somebody else.

  • kc69 on July 1, 2013, 21:36 GMT

    Tell me what did Pune Warriors Franchise help IPL or their own fans and sponsors with respect to performance. Its better Sahara withdraws and IPL gets back to the original 8 teams that it started with in 2008. At least it will reduce some load of the players(even though organizers will lose a little money).

  • TNAmarkFromIndia on June 25, 2013, 18:21 GMT

    Sahara will most probably not return to the IPL unless the franchise fees are reduced by about $150 million. If the team was to be sold, I'm sure it would go for half the price that Sahara bought the team for. The Pune Warriors was a horribly mismanaged franchise anyway so I hope Sahara does not return to the IPL.

  • TNAmarkFromIndia on June 25, 2013, 18:21 GMT

    Sahara will most probably not return to the IPL unless the franchise fees are reduced by about $150 million. If the team was to be sold, I'm sure it would go for half the price that Sahara bought the team for. The Pune Warriors was a horribly mismanaged franchise anyway so I hope Sahara does not return to the IPL.

  • kc69 on July 1, 2013, 21:36 GMT

    Tell me what did Pune Warriors Franchise help IPL or their own fans and sponsors with respect to performance. Its better Sahara withdraws and IPL gets back to the original 8 teams that it started with in 2008. At least it will reduce some load of the players(even though organizers will lose a little money).

  • Thyagu5432 on June 26, 2013, 9:35 GMT

    It is very obvious that the franchisees don't make any money from IPL. If the owners have a successful business running, then they can use this as a vehicle to increase the branding of their business and hence earn more money (franchisee earning money indirectly). But if the owners business is in trouble, they are stuck both ways. That is what happened to Deccan chargers owners and that is what is happening to Sahara now. If Sahara's main business doesn't recover, in the interest of IPL and in the interest of Pune Warrior players, the franchise has to be bought out by somebody else.