Lalit Modi, chairman and commissioner, Indian Premier League (IPL), has recently admitted that he constantly has to juggle his timings in order to get a few hours of rest.
No wonder then, the deal that the World Sports Group (WSG) signed with World Sports Group-Mauritius, with the Board of Control for Cricket in India (BCCI) as the third party, happened at 3 am, IST.
IPL shot off a letter to Sony Entertainment Television (now Multi Screen Media) at 10.44 pm (IST) on Saturday night, March 14, terminating its contract with the channel and five and half hours later, on early Sunday morning, sealed the deal with WSG-Mauritius for a whooping Rs 4,700 crore. WSG-Mauritius is a separate legal entity and isn’t directly related to WSG India Pvt Ltd.
Without the knowledge that BCCI had already inked the new deal, MSM India, on Sunday, sought an injunction in Bombay High Court anticipating that BCCI were in talks with other parties which they claimed wasn’t acceptable. When the case was brought for hearing on Monday afternoon, it then came to light that the deal had already been signed.
“The 3 o’clock agreement.” exclaimed Iqbal Chagla, the counsel representing MSM in the court, further arguing that the termination notice was served so late on Saturday keeping in mind that the court will reopen only on Monday.
The counsel said as per the January 2008 Media Rights License Agreement (MRLA), MSM had paid a bank guarantee of Rs 220 crore and another advance of Rs 90 crore to the BCCI-IPL which was accepted by the latter unconditionally.
To this, the BCCI counsel, V Tulzapurkar, replied saying that the termination clause, 10.1, according to the contract between the two parties, had to be evoked because of a series of breaches of contracts to which there had been no re medial procedures brought in place on MSM’s behalf.
V Tulzapurkar further added that “termination is always a unilateral act and not bilateral,” which in turn means that unlike signing of a contract, the termination of a contract does not require a reciprocal right or the acceptance of any receipt.
Thus, a fax was sent to MSM India on the night of March 14, which merely mentioned that the contract had been terminated. The BCCI, their counsel said in court, had sent notices to MSM 14 days before termination of the contract, citing eight issues pertaining to breach of contract to which they claim there was no reply from the latter.
“The licensee gets the rights back on termination of contract,” he appealed to the court. The court will hear both parties again on Tuesday.
Should the newly signed deal between IPL and WSG-Mauritius stay, the latter will have to look for a broadcaster in the country with more than a 60 per cent reach to further sub-lease its terrestrial rights. The deal between IPL and Sony being on a sticky wicket was first reported in on February 20.
For the record, WSG-India Pvt Ltd bought the telecast and production rights of IPL in 2007 for $ 918 million for a period of 10 years and had in turn leased it to Sony Max (from MSM India stable) for five years for a sum that neither party wants to disclose. Sony Max had signed a back-to-back agreement with WSG for the TV broadcast rights, while any new media right would remain with WSG.
In November 2008, BCCI blamed Sony for its Rs 137 crore on ground sponsorship deal with Reliance ADAG’s Big TV , which was being terminated. It is widely believed that it was after the fallout of the Big TV deal that the rift between BCCI and Sony widened.
BCCI had further asked MSM to convert Bharti Airtel’s exclusive on-air deal as a presenting sponsor for about Rs 30 crore to a consolidated ground and on-air deal for a further amount of about Rs 70 crore.
Big TV, which had picked up ground rights sponsorship with BCCI, had objected to the Sony-Bharti deal and later walked out of the deal citing discriminatory pricing by the broadcaster. Sony officials always maintained that they did follow BCCI rules by offering Big TV the first right of refusal for on-air sponsorship.
Also, it is believed that Kunal Dasgupta, CEO, MSM India quit on account of the fallout of the sponsorship deal between MSM and Big TV, though he has maintained that he quit for ‘personal reasons’.
For now, the possible new partners for BCCI include NDTV Group, state-owned Doordarshan, and ESPN Star Sports. Other prominent sports broadcasters, Ten Sports and Zee Sports, are out of the race since they form part of the rival Indian Cricket League (ICL), owned by the Essel Group. That leaves Nimbus Sports, which may not have the wherewithal to acquire IPL’s broadcasting rights.
Tags: Sony MAX