IPL news

Pune Warriors pull out of IPL

ESPNcricinfo staff

May 21, 2013

Comments: 58 | Text size: A | A

T Suman got the big wicket of Chris Gayle, Pune Warriors v Royal Challengers Bangalore, IPL 2013, Pune, May 2, 2013
Sahara India, owners of the Pune Warriors franchise, pulled out of the IPL for a second time © BCCI
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Sahara India, owners of the Pune Warriors franchise, have pulled out of the IPL over financial differences with the BCCI stemming from the valuation of the annual franchise fee it has to pay. The decision, the latest crisis to hit the IPL, comes three years after it bought the Pune franchise for $370 million - the highest price paid for any of the IPL franchises.

It seems the immediate cause was the BCCI's decision to cash the bank guarantee from Sahara that that it was obliged, under its contract, to furnish at the start of each season. The guarantee is equivalent to the amount to be paid annually to the BCCI and can be cashed in case a franchise fails to honour its commitments.

In this case, Sahara had furnished a bank guarantee worth Rs 170.2 crore (approximately $30 million). Since the deadline for paying the franchise fees was May 2, the BCCI waited till Sahara's IPL 6 commitments were over and cashed the guarantee on May 20.

Reacting to the development, IPL chairman Rajiv Shukla said the board cashed the bank guarantee according to the rules. "Yes, it (Pune Warriors) has pulled out. As per the rules and procedure of the BCCI if a franchise fails to pay the fee then we cash the franchise's bank guarantee. We are extremely sad by their decision to pull out. This should not have happened," Shukla said.

Pune Warriors finished eighth in the current IPL season, winning four out of their 16 matches.

Franchises' troubled history

  • Deccan Chargers - Terminated on September 14, 2012 due to financial problems as the owners were unable to service their debt obligations to lenders, eventually leading to its attempted sale and dissolution.
  • Pune Warriors - Owners Sahara India had cut its ties with the BCCI on February 4, 2012, withdrawing sponsorship from the Indian team and ownership of the franchise. However, the two patched up later, ending the dispute by issuing a joint statement.
  • Kochi Tuskers Kerala - Terminated on September 19, 2011 for breaching the terms of agreement - their inability to furnish a new bank guarantee for 2011.

This is the second time Sahara have pulled out of the IPL; they quit on the day of the 2012 auction and withdrew from sponsorship of the Indian team.

This time, though, Sahara will continue its sponsorship of the Indian team until the end of December 2013, when their present contract expires. "We share an excellent relationship with the players and will not want such dedicated and good human beings who serve the country so committed to get harmed financially due to unsporting attitude of BCCI. So we have given time to BCCI to get the new sponsorship in place from January 2014."

Sahara's actual franchise fee has been a contentious issue ever since they bought the Pune franchise for Rs 1702 crore ($370 million) in March 2010. Sahara had been demanding that the franchise fee from their original agreement should be recalculated since the minimum matches per year have been reduced to 14 from the 18 promised to them.

In a lengthy statement, Sahara detailed its dispute with the BCCI over franchise fees. It said it was "disgusted" by the BCCI's attitude towards it and would not rejoin the league even if the entire franchise fee was waived.

"In 2010, Sahara had bid Rs 1700 crore for the IPL franchise on the basis of revenue calculation on 94 matches. But we got 64 matches only," it added.

"We and the Kochi team [also bought at the 2010 auction] immediately protested and requested the BCCI to reduce the bid price proportionately for viable IPL proposition. Nothing was heard. We waited with confidence that such a sports body should have sportsmanship spirit," it said.

© ESPN Sports Media Ltd.

Posted by   on (May 27, 2013, 3:18 GMT)

Money creates crisis after crisis. Never ending lust. This is just the tip of the iceberg. Just as much IPL has given livelihood to cricketers it has given problems to cricket boards of other countries. BCCI is unjustifiably dominating world cricket purely because of money generating power.

Posted by 777aditya on (May 24, 2013, 5:41 GMT)

Good riddance! Pathetic, Poor, Pointless, Pedestrian, Painful, Pale, (P)une deserved every bit of this disgraceful exit after bagging the wooden spoon twice in as many attempts. Only lament, if any, would be they will not be able comp(l)ete a hat-trick of utter shameless, spineless, hopeless, and hapless performance next year. This team sure was a statistical delight of unknown nadirs. This team will finish last even if competes alone!

Posted by symsun on (May 22, 2013, 12:56 GMT)

@anki10688 i believe only 20% of the tickets are bought by fans, 80% of the seats are filled by those free tickets given to sponsors and other clubs.

Posted by anki10688 on (May 22, 2013, 12:27 GMT)

best thing is dont watch any ipl matches in stadium. let them sort out their problem first. then we shall support them if they are clean.

Posted by   on (May 22, 2013, 12:11 GMT)

Good for Sahara and IPL. This is inevitable since both Sahara and KTK owners did the mistake during tendering, going for such a high price to outdo all other competitors. Eventually KTK fell after a year. Sahara may be continued due to their money might and hoping for getting some consideration by applying pressure on BCCI using their Team India sponsorship status. As somebody commented if Government take over cricket administration then cricket in India will perish and corruption will flourish. Moreover like FIFA ICC also will only allow government intervention in cricket in matters related to security.

Posted by symsun on (May 22, 2013, 11:17 GMT)

I think its time for the India Government to take over BCCI under the Indian Sports Ministry, so that the revenue can be shared across the development of other sports in our country. Its disgusting that we are honoring and promoting a private body BCCI, as a Cricket Team of India. BCCI is just a private body, I dono who allowed them to represent for India. Either the government should take over Indian Cricket Team or have to own a create Team to represent for India.

Posted by CricOr on (May 22, 2013, 11:09 GMT)

Shahara start sponsoring Indian Hockey and make it compete with English Cricket which is too popular in India cause of just World Cup win

Posted by   on (May 22, 2013, 10:31 GMT)

It is important to state that Sahara has never, ever defaulted in any of its due payment in last 13 years of team sponsorship etc. We put on record that there is not a single rupee outstanding towards the sponsorship of Indian Cricket Team and BCCI is even secured by a bank guarantee against the sponsorship. The question to be asked is that what is the character of the sports body towards a company that does so much for sports in India?

Posted by   on (May 22, 2013, 10:30 GMT)

BCCI has been surrounded by controversies all along. On the other hand Sahara has done a lot for improving the standard of sport amenities in the country. Certainly Sahara did not expect such behaviour from BCCI. It is futile to speak about a sports body which lacks true commitment towards Sports and cricket.

Comments have now been closed for this article

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